Saudi airport deal: Turkey’s TAV says local partnerships help business take off

TAV Airports president and CEO Sani Sener

ISTANBUL: The CEO of Turkey’s TAV Airports, which recently won a deal to expand and operate an airport in Saudi Arabia’s western port city of Yanbu, has said working with a local partner is key to boosting business.
The Yanbu airport, which will be operated by TAV for 30 years, is the 15th airport project in the company’s portfolio. The new terminal will span 30,000 square meters, and occupy a strategic location close to Makkah and Madinah.
TAV and its Saudi partner Al-Rajhi Holding recently signed a joint venture agreement with the Kingdom’s General Authority of Civil Aviation (GACA) to complete the project. Passenger capacity could reach 3 million annually after the completion of the new terminal.
TAV Construction, which previously built the Doha airport, is also currently building airports in Abu Dhabi and Bahrain. In all these projects, TAV cooperates with local and international companies such as Taisei, CCC and Arabtec.
“We always value the local power and we always had local partners in the regions where we work. Cultural commonality, geographical proximity and administrative similarity help us a lot,” Sani Sener, TAV Group chief executive, said in an exclusive interview with Arab News.
The first-ever airport operated by TAV in Saudi Arabia was Prince Mohammed bin Abdulaziz International Airport in Madinah. In a consortium called TIBAH with Al-Rajhi Holding, TAV has a 25-year deal to operate that airport, starting in 2012, and has invested around $1.1 billion in the project. In 2015 Madinah airport, which is Saudi Arabia’s first airport privatization project, was named the “world’s best airport project” at the Global Construction Summit in New York.
“We evaluate the decision to work with local contractors according to the necessities of the project. It makes it easier for us to overcome local problems. If it is a new region, it is beneficial to have a local partner for the transfer of knowhow. TIBAH consortium is a good example of successful partnership with local contractors,” Sener said.
According to Sener, GACA’s privatization program has generated a big potential.
“We’ll keep on following opportunities that match our vision of being the leading airport operating company in our target regions, including the Middle East, with the mission of creating highest value for all our stakeholders in airport operations, and we hope to continue our cooperation with GACA for further successful projects,” he said.
Sener added: “We believe in Saudi economy and in its human capital. We have brought only few experts from Turkey and we are now training young Saudi graduates and giving them on-site training in our other airports.”
TAV operates many airports globally, including Istanbul Ataturk, Batumi Airport in Georgia and Zagreb Airport in Croatia.
Sener believes that the expansion of airport services can have a boost in the local area.
“One million extra passenger means 3,000 extra jobs, so these investments will automatically lead to an increase in the employment rates in the region,” he said.
Eyup Ersoy, an Ankara-based scholar of Middle Eastern affairs, said the latest contract for the operation and expansion of Yanbu airport is indicative of TAV’s solid market share in Middle Eastern markets, given its operational presence in Qatar, the UAE, Oman and Saudi Arabia.
“It is also indicative of the auspicious prospects of market expansion for TAV despite the financial difficulties of the public sector in the Gulf region due to low oil prices,” Ersoy told Arab News.
According to Ersoy, private-sector investments are expected to serve as diplomatic assets to facilitate the cultivation of cordial political relations, as well as being impediments to the deterioration of political relations in times of diplomatic discord.
“Accordingly, investments of the Turkish private sector in Middle Eastern markets is expected to ‘subsidize’ Turkey’s diplomacy in the region, in the sense of reducing political costs and increasing political benefits of diplomatic relations,” he said.
“Turkish private-sector ventures could be further improved by fostering a ‘virtuous cycle’ between the private sector’s economic and financial initiatives in regional markets and the public sector’s political and diplomatic efforts in regional politics,” Ersoy added.
“Positive feedbacks between the private sector and the public sector in Turkey’s external relations would certainly contribute to the efficacy of both parties’ enterprises, be it financial or diplomatic, in the Middle East, and around the globe.”