INTERVIEW: Virgin Hyperloop’s vision for a connected Gulf

Illustration by Luis Grañena
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Updated 22 November 2020
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INTERVIEW: Virgin Hyperloop’s vision for a connected Gulf

  • High-tech project’s Middle East chief explains why Saudi Arabia is central to its global ‘moonshot’ plans

Living in Abu Dhabi and commuting to work in Riyadh? Embarking at Jeddah for a two-hour journey to Dubai? A day trip from Riyadh to Makkah?

These futuristic notions could become reality in the age of the hyperloop, the fast-transit technology that is set to change everyday life in the Middle East, and the rest of the world, over the next decade.

Harj Dhaliwal, managing director for the Middle East and India at the Virgin Hyperloop Group, is more convinced than ever that hyperloop technology is the transport system of the future after the successful first passenger-carrying tests at a desert track in Nevada a couple of weeks ago.

“The US secretary for transport (Elaine Chao) said hyperloop is the most exciting thing happening to transportation today, and you have to agree with her. As this technology becomes proven, high-speed rail will become a thing of the past,” he told Arab News.

Coming from Dhaliwal, that is quite a claim. His career, originally focusing on transport projects in the UK, has evolved into developing advance rail systems in the Middle East, including the Etihad Rail project in the UAE and the Riyadh Metro in Saudi Arabia, for the US group Parsons. But hyperloop will change the fundamentals of travel for ever, he believes.

“Why would anybody want to invest billions in technology that is basically steel wheel on steel rail, effectively going back 150 years, when they have the potential of hyperloop?” he asked.

Dhaliwal concedes that rail will still have a role in the region — in the movement of heavy bulk goods and petrochemicals, for example — but hyperloop is the technology of the future, and nowhere more so than in Saudi Arabia.

Earlier this year, the company signed a deal with the Kingdom’s transport ministry for a study of hyperloop’s potential, involving the building of a test-track facility and other technology infrastructure.

That agreement could herald a closer financial relationship between Saudi Arabia and Virgin Hyperloop, which so far has raised $400 million from investors including DP World, the UAE ports and logistics company, but which needs more resources to fund the next stages of its evolution.

Saudi Arabia will be one of three strategic centers for Hyperloop, with another in India as well as the US. The company recently announced plans to build a $500 million testing and certification center in West Virginia. 

“We envisage a similar facility in Saudi Arabia to connect the Kingdom and the wider Middle East, but also to act as a hub for manufacturing, technology and materials. Europe is not that far away (from Saudi Arabia) and you could export the technology and materials there,” he said.

The strategy is in line with the aims of the Vision 2030 diversification plan, he said, which seeks to build a technology-driven economy less dependent on oil revenues, and create high-value jobs for the Kingdom’s citizens.


BIO

Born: UK 1964

Education: Bachelor of engineering, Nottingham Trent University

Career

  • Various roles in UK transport projects
  • Project director, Qatari Diar
  • Senior vice president, Parsons Corp.
  • Managing director, Middle East and India, Virgin Hyperloop

Dhaliwal sees hyperloop playing a crucial role in linking some of the mega-projects planned under the reform plan, such as the technology metropolis under construction at NEOM in the Kingdom’s northwest, the vast theme park planned at Qiddiya south of Riyadh, and the maritime hub at the King Abdullah Economic City on the Red Sea.

He has also been working closely with the King Abdullah University of Science and Technology, near Jeddah, on detailed aspects of the hyperloop technology.

“We are working to understand the transport requirements of the Kingdom. As it diversifies, it increases the opportunities for companies like ours to work in partnership with it as it looks to become a leader in technology sectors.

“There are lots of spin-offs in other technology areas, such as batteries, electric vehicles, solar and artificial intelligence. It is not just about transport from A to B, there are boundless opportunities for growth in manufacturing and knowledge,” he added.

The Nevada test was a milestone in the technology’s development.

Jay Walder, the Virgin Hyperloop CEO, said: “This is a step of historical significance. I don’t think you can overstate it. This is a moonshot moment. I have no doubt this will change the world.”

Dhaliwal took a more understated view. “It was the culmination of two years’ work. Since we began, lots of people were asking me when would people actually ride in it. Well, we have proved that levitation in a vacuum environment works, and we can safely transport passengers in a pod in a vacuum that levitates,” he said.

Other competing groups are also developing vacuum-tube travel similar to hyperloop, and running tests in various parts of the world, but the Nevada trial was the first that carried humans in the pods inside the sealed tube. The original idea for the technology came from Elon Musk, the Tesla billionaire.

Two Virgin Hyperloop employees traveled the length of a 500-meter test track in 15 seconds, reaching a speed of 172 kph.

“It felt not that much different than accelerating in a sports car,” one said. The speed was limited by the length of the test track, but Virgin Hyperloop has ambitions to eventually move people and goods at more than 1,000 kph.

That is about the same speed as a commercial jet cruises at 30,000 feet, and it is no surprise that Dhaliwal uses the terminology of aircraft flight — banking, rolls and pitch — to describe the performance of the vehicle in motion.

Safety at such speeds is a prime concern, and Dhaliwal and other Virgin Hyperloop executives spend a lot of time in talks with regulators and certification officials as they work toward proving the technology is passenger-worthy.

There is no global standard for hyperloop travel, so the technology and its associated infrastructure is developing its own rules it progresses, mixing mainly US and European regulations, along with local requirements in the Middle East.

“As a company, we’ve done what we had to do to get the regulators and authorities talking to the industry,” he said.

While all the attention was on the landmark first passenger ride, Dhaliwal also highlighted the cargo-carrying capability of hyperloop, especial when speed and efficiency are invaluable for the transport of high-value and perishable goods.

“The pods can join up to create a convoy, which is by far the most efficient way to transport goods at high speed, and then decouple electronically, then come together again to continue the next part of the journey,” he said.

The ability to move high-value goods was one of the things that attracted DP World, the majority shareholder in Virgin Hyperloop. The UAE company has plans for advanced logistics systems in its Jebel Ali hub, and between other centers in the Middle East and elsewhere via its CargoSpeed operation. Sultan Ahmed bin Sulayem, the chairman of DP World, is also chairman of Virgin Hyperloop.

Virgin, the business run by entrepreneur Richard Branson, is a minority investor and also represented on the board. “Virgin is an intrinsic part of the business and we still get a lot of support from them,” Dhaliwal said.

At some stage, Virgin Hyperloop will be looking to top up the $400 million investment it has raised so far for the expensive business of building and operating more test facilities and, ultimately, for its first functioning service, though this is still some way off, possibly by the end of the decade.

“The amount we’ve raised is exceptional for a startup that is only six years old, but, yes, we will need more investors and partners. We can always use more,” he said.

With its emphasis on advanced technology and job creation, Virgin Hyperloop looks a natural for Saudi Arabian investors. The Public Investment Fund, the Kingdom’s growing sovereign wealth fund that is behind the mega-projects, has prioritized high-tech and automation in its plans to aid the economic diversification strategy.

“We’re engaged with the government in Saudi Arabia and with the people who run the big projects. If there was an opportunity for investment, we would be very keen to develop that and that’s where we’re heading,” Dhaliwal said.

Assuming the hyperloop technology lives up to its promise — and the Nevada passenger tests were a big step toward that — it could be a game-changer in Saudi Arabian logistics and transportation, as well as a significant element in the Vision 2030 diversification plan.

“When I came to Virgin Hyperloop, I had this vision for a connected Gulf, for creating a ‘virtual region’ where time and distance was no longer a barrier to employment and development. That vision has not waned,” Dhaliwal said.


Turkiye lowers interest rate to 47.5%

Updated 26 December 2024
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Turkiye lowers interest rate to 47.5%

  • Central bank now expects inflation to reach 44% at the end of 2024
  • Decision signals the start of an easing cycle after eight months of steady policy

ISTANBUL: Turkiye’s central bank lowered its key interest rate on Thursday, the first cut in nearly two years as it battles with double-digit inflation.
The bank’s monetary policy committee decided to reduce the policy rate from 50 percent to 47.5 percent, with a statement citing improvement in “inflation expectations and pricing behavior.”
The last cut was in February 2023.
The central bank began to raise interest rates last year to battle soaring prices, after President Recep Tayyip Erdogan dropped his opposition to orthodox monetary policy.
It has kept the main rate stable at 50 percent since March.
Thursday’s decision signals the start of an easing cycle after eight months of steady policy.
The bank said the decisiveness over its tight monetary stance “is bringing down the underlying trend of monthly inflation and strengthening the disinflation process.”
In November, Turkiye’s annual inflation rate slowed for the sixth month in a row, at 47.1 percent.
The central bank now expects inflation to reach 44 percent at the end of 2024, up from a previous estimate in August of 38 percent.
The bank said the level of the policy rate would be determined in a way to ensure the tightness required by the projected disinflation path, taking into account both realized and expected inflation.
This week, the central bank announced that it would hold fewer policy meetings next year.
“The Committee will make its decisions prudently on a meeting-by-meeting basis with a focus on the inflation outlook,” the bank said, adding it would “decisively use all the tools at its disposal in line with its main objective of price stability.”
The bank “will make its decisions in a predictable, data-driven and transparent framework,” it added.
Hakan Kara, former chief economist at the central bank, welcomed the cut as “very reasonable and balanced start” that came with a “cautious/optimistic communication.”
“In my opinion, the central bank is doing its best. From now on, the ball is in other policies,” Kara commented on social media platform X, including in the pace of spending and regulations on critical institutions.
The rate slash comes amid a moderate increase in Turkiye’s minimum wage after several rounds of negotiations.
The net monthly minimum wage has been raised by 30 percent to 22,104 lira ($600), beginning from Jan. 1 — far below the demands of the workers union.
The union had demanded a 70 percent increase.
Erdogan welcomed the rise this week and said: “We once again remained true to our promise not to let our workers be crushed by inflation.”


Saudi Arabia’s JEDCO, Tarshid partner to boost energy efficiency at King Abdulaziz Int’l Airport

Updated 26 December 2024
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Saudi Arabia’s JEDCO, Tarshid partner to boost energy efficiency at King Abdulaziz Int’l Airport

  • Tarshid will conduct on-site surveys and technical studies of KAIA’s targeted buildings and facilities
  • Project aims to encourage the aviation industry to adopt sustainable practices

JEDDAH: Saudi Arabia’s King Abdulaziz International Airport is set to enhance energy efficiency and reduce emissions through a strategic partnership with the country’s National Energy Services Co., or Tarshid.

The pact between Jeddah Airports Co., or JEDCO, the airport’s operating company, and Tarshid, a Public Investment Fund company, aims to deliver sustainable energy efficiency solutions for the airport’s facilities. The partnership is facilitated through a Tarshid subsidiary and aligns with the Kingdom’s Vision 2030 and the Saudi Green Initiative.

The agreement was signed in the presence of Prince Abdulaziz bin Salman, minister of energy and chairman of Tarshid’s board of directors, according to the Saudi Press Agency.

The deal, which aims to launch innovative energy-saving initiatives and promote environmental responsibility, supports Saudi Arabia’s Civil Aviation Environmental Sustainability Program and contributes to achieving the goals of the Saudi Green Initiative and Vision 2030, which seek to improve energy efficiency and implement sustainable solutions across public and private sector facilities in the Kingdom.

The Kingdom has been developing the Civil Aviation Environmental Sustainability Plan, which seeks to mitigate the environmental impact associated with the expected growth of the country’s civil aviation sector.

The plan is crafted to align with global commitments outlined in the Paris Climate Agreement and the emission reduction targets set by the International Civil Aviation Organization.

The country has made several national-level achievements over the past years in the pursuit of its net-zero emissions goal, set for 2060. It is also pursuing new technologies to improve fuel efficiency and decarbonize the aviation sector.

Ranked among the top 100 airports globally, KAIA holds the distinction of being the third-best airport in the Middle East, according to rankings by UK-based consulting firm Skytrax.

Under the agreement, Tarshid will conduct on-site surveys and technical studies of KAIA’s targeted buildings and facilities, recommending optimal solutions to enhance energy efficiency and reduce consumption within the project’s scope.

Waled Abdullah Al-Ghreri, CEO of Tarshid and board member, said that they are dedicated to realizing Vision 2030’s objectives of enhancing energy efficiency and sustainability in Saudi Arabia.

“Tarshid continues to strengthen its partnerships with both public and private sectors, and our collaboration with Jeddah Airports Co. is a pivotal step toward establishing new energy efficiency benchmarks in the aviation sector, reflecting a future that merges operational excellence with environmental responsibility.”

Mazen bin Mohammed Johar, CEO of JEDCO, expressed his enthusiasm for the collaboration, saying that the agreement is a significant step in advancing the company’s efforts to enhance the operational efficiency of airport facilities.

Johar added that the agreement aligns with the National Aviation Strategy’s goal of operating a world-class, sustainable airport with high energy efficiency standards, consistent with Vision 2030.

He highlighted KAIA’s achievements in environmental preservation, including sustainability projects such as a recycling initiative that reduces carbon emissions and achieves net-zero targets, electricity and water conservation projects utilizing solar panels and smart technologies, and air quality monitoring in collaboration with the National Center for Environmental Compliance.

He said that the airport has increased green spaces to mitigate carbon emissions.

Established in 2017, Tarshid specializes in retrofitting buildings and facilities to improve energy efficiency and sustainability across government and private sectors. The KAIA project is among its key initiatives with the private sector, aiming to encourage the aviation industry to adopt sustainable practices.

By the end of the third quarter of this year, the company had achieved annual energy savings of 7.3 terawatt-hours across various projects, equivalent to conserving over 11.7 million barrels of oil equivalent and avoiding approximately 4.2 million metric tonnes of harmful emissions. These efforts equate to the environmental impact of planting more than 69.4 million seedlings annually, SPA reported.

Tarshid has recently signed a similar agreement with SAL Logistics Services, underscoring its role in advancing energy efficiency and sustainability across both governmental and private sectors. 


Saudi non-profit sector revenues surge 33% to $14.4bn in 2023

Updated 26 December 2024
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Saudi non-profit sector revenues surge 33% to $14.4bn in 2023

  • Health sector led the revenue surge with a 70% increase compared to the previous year
  • Education and research activities followed, growing 53%

RIYADH: Saudi Arabia’s non-profit sector recorded revenues of SR54.4 billion ($14.4 billion) in 2023, marking a 33 percent year-on-year increase, according to data from the Saudi General Authority for Statistics.  

The sector’s total expenditures also rose by 33 percent, reaching SR47 billion, while employee compensation climbed 17 percent to SR21.7 billion. 

The health sector led the revenue surge with a 70 percent increase compared to the previous year. Education and research activities followed, growing 53 percent, while volunteer intermediary and enhancement activities rose 36 percent. Together, these areas were the largest contributors to the sector’s growth. 

Saudi Arabia’s non-profit sector has seen rapid growth, aligning with the objectives of Vision 2030. As of March 2024, the Kingdom had 4,721 registered non-profit organizations — a 182 percent increase since 2018.  

On the spending front, the health sector led with a 74 percent year-on-year rise in expenditures in 2023, followed by education and research activities with a 55 percent increase, and environmental activities, which grew by 34 percent. These categories contributed the most to the sector's overall spending.  

Employee compensation reflected similar trends, with education and research activities seeing the sharpest growth at 84 percent. Environmental activities recorded a 38 percent rise, while volunteer-related activities saw a 29 percent increase in compensation. 

In terms of workforce distribution, cultural and recreational sectors emerged as the largest employers, accounting for 27.6 percent of total employment in the non-profit sector. Social services followed at 27.2 percent, with development and housing activities comprising 12.4 percent. Health-related roles accounted for 11.5 percent, and education and research activities contributed 7.5 percent, while other non-profit activities made up the remaining 13.8 percent. 

This distribution marked a shift from 2022, where social services led at 29.7 percent, followed by cultural and recreational activities at 25.4 percent. 

This growth in the non-profit sector has raised its contribution to the gross domestic product to 0.87 percent, exceeding the 2023 target of 0.51 percent and aiming for an ambitious 5 percent by 2030. 

Additionally, the Kingdom has surpassed its target of 1 million volunteers six years ahead of schedule, achieving this milestone by the end of 2024. 


Dubai sees 7.4% surge in international visitors through August

Updated 26 December 2024
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Dubai sees 7.4% surge in international visitors through August

  • Dubai’s hotel inventory grew by 240 rooms in the third quarter, bringing the total to approximately 155,400 rooms
  • Dubai International Airport reported a record 44.9 million passengers in the first half of 2024

RIYADH: Dubai recorded a 7.4 percent year-on-year increase in international visitors from January to August 2024, reaching a total of 11.93 million, according to recent data from the Dubai Department of Economy and Tourism.

The report highlights that Western Europe, South Asia, and the Gulf Cooperation Council remain the top three source markets for the emirate, collectively accounting for more than 50 percent of all international visitors.

This growth in tourism mirrors Dubai’s strong market performance, with both the average daily rate and revenue per available room seeing year-on-year increases of 2.5 percent and 2.7 percent, respectively, between January and September.

Meanwhile, according to the latest JLL report, Dubai’s hotel inventory grew by 240 rooms in the third quarter, bringing the total to approximately 155,400 rooms. The report also anticipates an additional 4,800 rooms will be added by the end of 2024, mainly in the four- and five-star categories.

Major projects like Marsa Al-Arab, The Island by Wasl, and Dubai Islands are expected to set new benchmarks for luxury beachfront real estate, further driving growth in the hospitality sector.

However, the JLL report also noted an emerging trend of price sensitivity within the luxury hotel segment. Increased competition from other regional and global tourist destinations has led to a shift in the spending behavior of high-end travelers.

In response, luxury hotel operators are adjusting their ADR to maintain higher occupancy levels, a strategy that is also being adopted by mid-scale and budget hotels.

As competition in the hospitality market intensifies, hotel operators are focusing on improving guest experiences, food and beverage offerings, and overall service quality to attract visitors and stay competitive. Price fluctuations in the luxury segment are expected as operators align rates with changing demand patterns.

In another sign of Dubai’s growing global appeal, Dubai International Airport reported a record 44.9 million passengers in the first half of 2024. CEO Paul Griffiths emphasized the airport’s strategic importance as a global aviation hub and reiterated Dubai’s position as a leading destination for business, tourism, and talent. With these strong indicators of growth, Dubai is well on track to solidify its place as one of the world’s top travel and tourism destinations.


Saudi Arabia’s logistics centers surge 267% amid Vision 2030 push

Updated 26 December 2024
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Saudi Arabia’s logistics centers surge 267% amid Vision 2030 push

  • Eastern Province topped the list in terms of the number of logistics centers, with six hubs covering an area of 6.3 million sq. meters
  • Makkah region occupied the highest total area, with five centers spanning 20 million sq. meters

RIYADH: Saudi Arabia’s logistics sector has seen notable growth, with the number of facilities increasing by 267 percent since 2021, according to a report by the General Authority for Statistics. 

In 2023, the Kingdom had 22 hubs spanning over 34 million sq. meters, underscoring the nation’s push to become a regional logistics leader under its Vision 2030 plan.

The Eastern Province region topped the list in terms of the number of logistics centers, with six hubs covering an area of 6.3 million sq. meters.

However, the Makkah region occupied the highest total area, with five centers spanning 20 million sq. meters, followed by Riyadh with five centers covering 4.9 million sq. meters.

The report also highlighted that the Kingdom had 12,451 warehouses in 2023, covering a total area of 22.8 million sq. meters.

Riyadh accounted for 52.9 percent, occupying 10.6 million sq. meters, followed by Makkah with 17.9 percent, the Eastern Province with 14.3 percent, and other regions making up the remaining 14.9 percent.

According to the report, general warehouse licenses were the most prevalent, totaling 6,923 and making up 55.6 percent of all licenses. Humidity-controlled warehouses followed with 2,115 licenses, representing 17 percent of the total, while refrigerated warehouses accounted for 16 percent with 2,006 licenses.

The maritime sector dominated cargo transport by quantity with 308.7 million tonnes, followed by 24.9 million tonnes transported via land, 14.3 million tonnes by rail, and 918,000 tonnes via air.

The report also revealed that the goods transport segment registered 7,963 valid licenses, with Riyadh region leading the way with 1,996 active licenses.

Saudi Arabia’s warehousing and logistics sector is undergoing a transformative surge, driven by Vision 2030 and supported by significant government and private investments.

According to a November report by Maersk, a leader in integrated logistics, the Kingdom is poised to become a global trade and logistics powerhouse. The market is projected to reach $38.8 billion by 2026, growing at a compound annual growth rate of 5.85 percent.

This growth reflects Saudi Arabia’s strategic positioning as a regional logistics hub, supported by its $106.6 billion commitment to expanding land, air, and sea cargo capacities.

The Saudi Ports Authority’s $4.5 billion investment into maritime logistics in 2023 is a testament to this vision. Coupled with giga-projects like NEOM and the National Industrial Development and Logistics Program, the country aims to capture 55 percent of the Gulf Cooperation Council’s logistics market while exponentially increasing non-oil exports.

According to Knight Frank’s Industrial and Logistics Market Review for the first half of 2024, warehouse occupancy in Saudi Arabia reached a record 97 percent nationally in mid-2024, underscoring strong demand for storage and light industrial facilities.

Riyadh and Jeddah have emerged as focal points, with high lease rates and increasing global interest from firms like Maersk, DB Schenker, and DP World.

Additionally, the rise of e-commerce and digital logistics solutions has catalyzed innovation and competition, positioning Saudi Arabia at the forefront of logistics advancements in the region.

Digital transformation

According to the report, the postal and parcel sector in Saudi Arabia handled over 140 million items in 2023, supported by 1,300 sales outlets, with an average delivery time of just 2.45 days — highlighting the sector’s growing efficiency.

Meanwhile, customs and digital transport advancements continue to reshape the logistics landscape. Customs clearance activity licenses totaled 170 in 2023, with airports accounting for 47 licenses.

Additionally, 37 delivery app companies were licensed for freight transport, signaling a significant shift toward digital innovation in the sector.