Saudi Arabia - Infrastructure, power, and communications
In the 1970s, in order to accommodate its burgeoning oil industry, the Saudi government took extensive measures to expand the kingdom's infrastructure. Roads and railways were built, airports were expanded, and seaports were enhanced to handle heavy volumes of traffic.
By the end of 1999, the kingdom had around 150,000 kilometers (93,210 miles) of roads, about a third of them paved. Major arteries provide passage between urban and industrial centers. Jeddah, Mecca, and Medina in the west are linked to Riyadh and to the Eastern Province oil fields
|Country||Newspapers||Radios||TV Sets a||Cable subscribers a||Mobile Phones a||Fax Machines a||Personal Computers a||Internet Hosts b||Internet Users b|
|a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.|
|b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.|
|SOURCE: World Bank. World Development Indicators 2000.|
by the trans-peninsular highway. The Tapline road provides a link between Damman, on the gulf coast, and the Jordanian border. The Red Sea road runs north-south, the length of the western shore.
Saudi Arabia's rail network is currently limited to a 571-kilometer (355-mile) single track line running between Damman and Riyadh, and a 322-kilometer (200-mile) line between Riyadh and Hufuf. As of 2000, new lines had been proposed to connect cities on the gulf coast in the east, such as Damman and Jubail, to mineral deposits in the northwest. A cross-peninsula line connecting the Red Sea port of Jeddah with the gulf port of Damman had also been proposed.
There are 6 major seaports in Saudi Arabia, along with 14 minor ones, sufficient to handle the country's importing and exporting needs. Four of the major ports— Duba, Yanbu, Jeddah, and Jizan—are on the Red Sea. The other 2, Damman and Jubail, are on the Persian Gulf. Yanbu and Jubail are industrial ports and together account for more than half of the country's import and export handling. As part of a larger effort to decentralize the economy, operation and maintenance of the seaports were turned over to the private sector in 1997.
Saudi Arabia has 3 international airports located at Jeddah, Damman, and Riyadh. These airports also act as the primary hubs for domestic flights. Other domestic airports include Medina, Jizan, Taif, Qassim, Tabuk, and Abha. Saudi Arabian Airlines, the national carrier, is owned and operated by the government. While privatizing the airline has been considered, as of 2000 no concrete moves had been made to that effect.
The expansion of the Saudi infrastructure was rapid in the 1970s, when oil revenues were at their peak. The completion of a number of major projects in the 1980s coincided with a downturn in the price of oil and a subsequent loss of revenues. As a result, spending on infrastructure declined. The growth in the transport sector, which between 1975 and 1979 reached 19.3 percent, had, by the early 1990s, dropped below 2 percent.
In 1998, despite a growth in investment, the telecommunications sector in Saudi Arabia was fairly limited. By 1999, the expansion of the industry had become a priority. The U.S. firm Lucent Technologies won a US$4 billion contract in 1994 to install fixed phone lines throughout the kingdom, but 4 years later the 2.9 million existing lines still represented under 15 lines per 100 inhabitants, according to the International Telecommunication Union. In an effort to bring the system in line with emerging East European economies, the government is seeking to increase the number of lines to at least 30 per 100 residents by 2002. Lucent, on top of its initial contract, was hired in 1998 to expand mobile phone service in a deal worth US$700 million. The government hopes the expansion will enable the kingdom to accommodate 5 million cell phone subscribers by the end of 2001.
In a bid to privatize the telecommunications industry, the government in April 1998 approved the creation of the Saudi Telecommunications Company, an entity which originally comprised the telecommunications arm of the Post, Telegraphs, and Telephone ministry (PTT). According to the initial plan, shares in the company were to be sold starting at the beginning of 2000, with the government stake in the company being eventually reduced to zero. However, when talks broke down over the transfer of a large bulk of shares to the American firm SBC (Southern Bell Communications), government withdrawal of operations was delayed. By 2001, a deadline for complete privatization had still not been set.
By the end of the 1990s, the demand for energy in Saudi Arabia had reached an all-time high, outstripping supply and, in some cities, causing frequent power out-ages during periods of high use. Short-term solutions, such as raising prices to curb demand, proved ineffective. For instance, in 2000, price increases totaling almost 78 percent were introduced for electricity. However, after 6 months, vehement public protests were launched in response to high electricity bills. As a result, the price hikes were rescinded before they could have any substantial effect. To meet growing energy needs over the long term, the government has set out to restructure the industry and increase investment from both the public and private sectors.
In November of 1998, it was announced that the 10 separate electricity companies in Saudi Arabia would be consolidated into a single company, the Saudi Electric Company. The government has expressed its intention to eventually relinquish its 85 percent stake in the sector. By consolidating the sector, the government hopes to streamline operations and improve efficiency, making the industry more dependable and more profitable, and in turn more attractive to outside investors. By 2020, the government's aim is to increase power generation capacity by over 3 times from where it stood in 1990, from 22,000 megawatts (MW) to 69,000 MW. Saudi Arabia, which imports no energy, is entirely dependent upon oil for the generation of its power.