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.


Oil Updates – crude nudges up after Russia-Ukraine tensions escalate

Updated 18 November 2024
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Oil Updates – crude nudges up after Russia-Ukraine tensions escalate

SINGAPORE: Oil prices edged up on Monday after fighting between Russia and Ukraine intensified over the weekend, although concerns about fuel demand in China, the world’s second-largest consumer, and forecasts of a global oil surplus weighed on markets.

Brent crude futures gained 29 cents, or 0.4 percent, to $71.33 a barrel by 8:02 a.m. Saudi time, while US West Texas Intermediate crude futures were at $67.20 a barrel, up 18 cents, or 0.3 percent.

Russia unleashed its largest air strike on Ukraine in almost three months on Sunday, causing severe damage to Ukraine’s power system.

In a significant reversal of Washington’s policy in the Ukraine-Russia conflict, President Joe Biden’s administration has allowed Ukraine to use US-made weapons to strike deep into Russia, two US officials and a source familiar with the decision said on Sunday.

There was no immediate response from the Kremlin, which has warned that it would see a move to loosen the limits on Ukraine’s use of US weapons as a major escalation.

“Biden allowing Ukraine to strike Russian forces around Kursk with long-range missiles might see a geopolitical bid come back into oil as it is an escalation of tensions there, in response to North Korean troops entering the fray,” IG markets analyst Tony Sycamore said.

Saul Kavonic, an energy analyst at MST Marquee, said: “So far there has been little impact on Russian oil exports, but if Ukraine were to target more oil infrastructure that could see oil markets elevate further.”

In Russia, at least three refineries have had to halt processing or cut runs due to heavy losses amid export curbs, rising crude prices and high borrowing costs, according to five industry sources.

Brent and WTI slid more than 3 percent last week on weak data from China and after the International Energy Agency forecasted that global oil supply will exceed demand by more than 1 million barrels per day in 2025 even if cuts remain in place from OPEC+.

China’s refinery throughput fell 4.6 percent in October from last year and as the country’s factory output growth slowed last month, government data showed on Friday.

Investors also fretted over the pace and extent of interest rate cuts by the US Federal Reserve that has created uncertainty in global financial markets.

In the US, the number of operating oil rigs fell by one to 478 last week, the lowest since the week to July 19, Baker Hughes data showed.


World Defense Show 2026 to showcase record number of Chinese companies in Riyadh

Updated 17 November 2024
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World Defense Show 2026 to showcase record number of Chinese companies in Riyadh

RIYADH: The third edition of the World Defense Show, scheduled to take place in Riyadh from Feb. 8-12, 2026, has secured a record number of participants, with more than 100 companies from China confirmed to take part.

Notably, the China Pavilion has already filled 88 percent of its exhibition space, making it the second-largest national presence at the event, surpassing even the host nation, Saudi Arabia.

This strong participation underscores the growing global appeal of the show. Since its debut, WDS has seen impressive growth, with exhibition space expanding by 54 percent between 2022 and 2026, more than doubling its size. As of now, over 50 percent of the total floor space for WDS 2026 has already been sold.

The announcement follows the successful conclusion of the second edition of WDS, which hosted 773 exhibitors from 76 countries, facilitated SR 26 billion ($6.9 billion) in deals, and attracted 106,000 trade visits.

“The significant interest and commitment from Chinese exhibitors is a testament to the prominence WDS holds in the global defense space,” said Andrew Pearcey, CEO of World Defense Show.

“Our goal is to bring together global and local stakeholders to advance networking opportunities, strengthen global knowledge-sharing, and shape the future of defense technology,” he said.

The high level of interest from Chinese firms was also evident at the 15th Airshow China in Zhuhai, held from Nov. 12-17. Senior WDS representatives attended the event to engage with potential exhibitors, offering them the opportunity to secure their space at WDS 2026, which is rapidly filling up.


Closing Bell: Saudi main index rises to close at 11,811

Updated 17 November 2024
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Closing Bell: Saudi main index rises to close at 11,811

  • Parallel market Nomu gained 9.64 points, or 0.03%, to close at 29,477.35
  • MSCI Tadawul Index also gained 4.49 points, or 0.30%, to close at 1,485.85

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 20.80 points, or 0.18 percent, to close at 11,811.98. 

The total trading turnover of the benchmark index was SR4.22 billion ($1.12 billion), as 115 of the stocks advanced and 116 retreated. 

The Kingdom’s parallel market Nomu gained 9.64 points, or 0.03 percent, to close at 29,477.35, with 41 listed stocks advancing and 41 declining. 

The MSCI Tadawul Index also gained 4.49 points, or 0.30 percent, to close at 1,485.85. 

The best-performing stock of the day was The Mediterranean and Gulf Insurance and Reinsurance Co., whose share price rose 9.96 percent to SR20.98. 

Other top performers included Saudi Reinsurance Co. and Thimar Development Holding Co., with their share prices increasing by 6.89 percent to SR38.80, and 6.04 percent to SR43.90, respectively. 

The share prices of Saudi Cable Co. and The Co. for Cooperative Insurance also surged by 5.39 percent and 5.08 percent to SR97.70 and SR132.40, respectively. 

The worst performer was Arriyadh Development Co., whose share price dropped by 5.27 percent to SR26.05. 

Other notable decliners included Alistithmar AREIC Diversified REIT Fund and Red Sea International Co., whose share prices fell by 3.68 percent to SR9.43, and 3.34 percent to SR66.50, respectively. 

Zamil Industrial Investment Co. and The National Co. for Glass Industries also saw declines, with their share prices falling by 3.33 percent to SR26.15, and 3.14 percent to SR49.40, respectively. 

On the announcements front, Amwaj International Co. disclosed its board of directors’ recommendation to distribute SR6 million in cash dividends to shareholders for the fiscal year ending Dec. 31. 

According to a statement on Tadawul, the dividends will cover 6 million eligible shares, with a payout of SR1 per share, representing 10 percent of the share’s par value. 

Amwaj International Co. concluded the trading session at SR42, marking an impressive 18.57 percent increase. 

Arab Sea Information Systems Co. announced updates regarding its project with the Al-Madinah Region Development Authority for managed IT services. 

The company was notified of the decision to cancel the competition due to procedural violations identified following a grievance by a competitor, according to a filing on Tadawul.

The grievance was filed before the award decision or in opposition to it and the company clarified that no costs are associated with the development. 

Arab Sea Information Systems Co. closed the session at SR7.13, down 0.84 percent. 


Saudi Arabia, UAE lead MENA deal boom with $71bn in activity: EY

Updated 17 November 2024
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Saudi Arabia, UAE lead MENA deal boom with $71bn in activity: EY

  • UAE and Saudi Arabia were the top investment destinations, accounting for 52% of the region’s total deal volume and 81% of deal value
  • Sovereign wealth funds played a key role in driving M&A activity in the region

RIYADH: Saudi Arabia and the UAE led Gulf region merger and acquisition activity, which increased 7 percent in value to $71 billion in the first nine months of the year. 

According to EY’s MENA M&A Insights 9M 2024 report, the Middle East and North Africa region saw a total of 522 deals during the period, with deal volume rising 9 percent year on year. 

The value growth was largely fueled by a surge in cross-border transactions and substantial investments from sovereign wealth funds, such as the UAE’s Abu Dhabi Investment Authority and Mubadala, and Saudi Arabia’s Public Investment Fund. 

Brad Watson, EY MENA strategy and transactions leader, said: “Deal activity in the MENA region has seen a notable improvement this year, driven by strategic policy shifts, the liberalization of investment regulations and robust capital inflows from investors.” 

He added: “With companies actively seeking opportunities to grow and diversify their operations, we have observed a surge in cross-border M&A volume and value.” 

The UAE and Saudi Arabia were the top investment destinations, accounting for 52 percent of the region’s total deal volume and 81 percent of deal value, with 239 transactions worth $24.5 billion. Both nations continue to benefit from their favorable business environments and strategic economic policies. 

“In particular, the UAE remained a favored investment destination during the first nine months of 2024 due to its business-friendly regulations and efficient legislative framework,” said Watson. 

Sovereign wealth funds played a key role in driving M&A activity in the region, supporting national economic strategies. These funds were particularly active in sectors aligned with long-term diversification plans, such as technology, energy, and infrastructure. 

Cross-border M&A deals dominated, representing 52 percent of the overall volume and 73 percent of the value, the report added. 

However, domestic M&A activity also saw a notable increase, rising 44 percent year on year to $19.3 billion, driven by government-related entities making significant acquisitions in the oil and gas, metals and mining, and chemicals sectors. 

Insurance and oil and gas emerged as the most attractive sectors, accounting for 34 percent of the total deal value. Technology and consumer products led domestic M&A by volume, with 78 deals representing 31 percent of activity. 

Saudi Arabia recorded the region’s largest domestic transaction, with energy giant Aramco’s $8.9 billion acquisition of a 22.5 percent stake in Rabigh Refining and Petrochemical Co. from Sumitomo Chemical. 

The US remained a top target for MENA investors, with 32 deals valued at $18.3 billion. The US-UAE Business Council helped facilitate these partnerships, with prominent US firms collaborating with UAE public and private sectors on various initiatives. 

Outbound and inbound deals 

Outbound M&A was the largest contributor to deal value, with 147 transactions totaling $41.4 billion, led by insurance and real estate investments. The US and China represented 70 percent of outbound deal value. 

Inbound deals also witnessed growth, rising 20 percent in volume and 47 percent in value to $10.4 billion. The US and UK were the leading contributors, driving activity in technology and professional services. 

Mega deals 

Ten of the region’s largest deals were concentrated in the Gulf Cooperation Council. These included Mubadala and partners’ $12.4 billion acquisition of Truist Insurance Holdings and an $8.3 billion investment in Chinese shopping mall operator Zhuhai Wanda Commercial Management Group. 

“Strengthening regional relationships with Asian and European economies, alongside existing ties with the US, enabled MENA countries to gain access to larger and growing markets,” said Watson. 

As Gulf nations continue diversification strategies and prioritize digital transformation, sectors like technology, energy, and infrastructure are expected to drive further M&A growth. Saudi Arabia and the UAE’s proactive policies and substantial sovereign wealth fund activity position the region as a global investment hotspot. 


Craig Smith explores the media’s role in AI conversations

Updated 17 November 2024
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Craig Smith explores the media’s role in AI conversations

RIYADH: The media’s primary role is to translate complex ideas into digestible content for the public, said Craig Smith, host of the Eye on AI podcast and a former correspondent.

In a recent conversation with the Saudi Data and Artificial Intelligence Authority’s GAIN podcast, Smith discussed the rapidly evolving field of artificial intelligence and the challenges media faces in accurately covering it amid both excitement and misinformation.

“You can put AI in a robot, but robotics is one field, and AI is another,” Smith explained, stressing the need for more precise portrayals of AI in the media.

As AI discussions have intensified in the past two years, particularly around its potential threats, Smith emphasized that these debates are meant to encourage further research into AI safety and prompt regulation. However, he noted that the popular press often misinterprets the purpose of these discussions, leading to sensational headlines that contribute to widespread fear.

“The purpose of that discussion is to generate more research around the safety of AI and to spur regulation to get the governments looking at what’s happening,” Smith said.

“But the media often misses this goal, resulting in alarmist narratives like AI will ‘kill us all,’ which detracts from the vital work of understanding and regulating this technology.”

While it’s easy to imagine a dystopian future for AI, Smith pointed out the far more nuanced reality. “We’re still working on getting large language models to be truthful and stop spouting nonsense,” he said, illustrating the long and challenging path ahead in developing reliable AI systems.

Reflecting on the rapid pace of change in the field, Smith highlighted the exciting progress in AI research, particularly since the introduction of the transformer algorithm in 2017.

“It was Ilya Sutskever at OpenAI who built a model around the transformer algorithm and scaled it up,” Smith noted, acknowledging the profound impact this algorithm has had on the development of large language models like ChatGPT and Claude.

Smith’s insights underscored the media’s crucial responsibility in accurately covering AI. By bridging the gap between complex technological advancements and public understanding, journalists have the power to foster informed discussions that will ultimately shape the future of AI in society.