Authors: Ahmad Derakhshan (1)

(1) Shipping consultant in Iran, Khoramshahr University of Maritime Science and Technology (KUMST). ahmedderakhshan@yahoo.com

ABSTRACT

This article aims to find a new way into the Gulf's Trans-shipment through Saudi Arabia territories which presently carry on through Jebel Al Ali. The idea of a Saudi land-bridge emerged from an examination of Saudi socio-economics, geographic and transportation policy changes with coincidence excavation of trade and maritime transportation events and trends regionally and globally. Because the world is running on uncertainties, a scenario approach as a means of planning in the ever-changing world has been employed in three phases: scenario generation, and development and contraction to alleviate the uncertainty obstacle. The generated scenario has been developed in technical, geographical, economical and political themes. At last, the idea abstracted to drive a plausible future for a new trans-shipment paragon in the region.

INTODUCTION

This article aims to analyze the potential role of a Saudi Arabia Land-Bridge (SLB) for trans-shipment containers to the Gulf's region, which under current circumstances have been trans-shipped through Jebel Al Ali a main distribution port of the region. By excavating trends and events in the global and regional trade and transportation system, an idea for alternative transportation facilities through Saudi territories is proposed. A scenario approach has been applied to generate, develop and contract the idea.

Saudi Arabia's geographical position and new reforms in the socioeconomic and political aspects, gives the nation an excellent role in regional trade. Scenario of a SLB can accelerate regionalization trends in the Gulf through serving the region a trade facility to let them be more competitive in terms of time and cost. Obviously regional producers suffer from excess transportation costs which are imposed by extra navigation in rounding the peninsula. SLB can reduce time to 5-7 days and cost to $40 thousands per each day of navigation.

SLB generation phase examines socio-economic and geographic data of Saudi and through land-bridge theory, generates an alternative way for the region's trans-shipment. In the second phase of scenario building, the generated scenario has been developed and tested by technical, geographical, economical and political themes. In the technical theme, future facility requirements to handle containers are tested and in the geographic theme the effectiveness of SLB is examined in terms of cost and time. In the economical theme, three scenarios (optimistic, moderate and pessimistic) are employed to determine potential demand and then the capital expenditure of SLB and its plausible revenue is explored. In the political theme, a picture for the future cooperation with the region is proposed. In the last phase of the scenario, building the two-phase results have been abstracted into a roadmap to show how the scenario is generated and developed.

SCENARIO APPROACH

Plans are based on perspectives and forecasting and future prospects are the major feed for any long-term plan. But what is our job in a world of uncertainties? Uncertainties are a constant part of our ERA equations. Econometrics models are suffering from permanent uncertain major variables, which limit their usage and burden. Many plausible futures are needed to prepare development managers in a world of uncertainties. In a philosopher's words: 'human brains are laboratories for testing genuine and initiative ideas'. Scenarios are a scientific approach, which are generated from tested ideas in human brains.

A scenario is known and familiar for many strategists around the world, however, it originated from California Rand Corporation for the military application after World War II, and then Herman Kahn adapted it in 1960's as a decision tool for businesses (Schoemaker's, 1995)3 . Khan (1965)4 as a pioneer of scenario adaption defined it as "hypothetical sequences of events constructed for the purpose of focusing attention on causal processes and decision points". Kleiner (1995)5 described it in other words: "Contrary to what many people believe about scenario exercises, their purpose is not prediction. You do not predict what will happen: you posit several potential futures. A scenario planning exercise is a bit like a storytelling workshop, set up to bring forth distinction and phenomena that the conventional wisdom ignores."

In any case, scenario and forecasting are fundamentally different, because forecasting assumes that the future can be foreseen but in scenarios it is not. In comparison with strategies, scenarios chase multiple versions of plausible futures instead of one predictive future. Scenarios can be regarded as descriptions of possible futures that seem plausible under different sets of assumptions and provide a background against which policy assessments can be made (Ubbels, Barry, (2000))6.

Finlay (2000)7 expressed scenario elements as; scenario description, scenario variables and scenario themes. Scenario description is a general description of the main scene; Scenario variables are trends and events are those that picture futures through single effective variables,. Themes provide you with a maneuverable scene, to internal and external environments. Scenarios are constructed in two ways; top-down and bottom-up, or themes-based. In the latter inductive pace is used and major related themes applied as the main inputs for picturing plausible scenes.

Famous scenario applications in transport AREA are; US Department of Transportation (DOT) which set a goal to double transit ridership as a means to reduce vehicle miles traveled (VMT) to 2020 baseline, Netherland; Whiliams, (1980)8, all modes in project of Scenario explorer for passenger transport, Canada; Dagenais, M.G et al.(1987)9, to forecasting Container traffic, Greece; Darzentas, J. and Spyrou, T. (1996)10 forecast of Ferry shipping traffic, Australia; Tongzon, j. (1991)11 shipping services in Australian ports EU; Banister, et al, (1998), to construct scenarios for sustainable mobility and apply to transport policy building.

Here the mentioned theme-based approach has been adopted in three main Phases as; scenario generation, scenario development and scenario contraction12 (Derakhshan, (2005))13. In the first phase major DEEPLIST14 variables provide the opportunity to depict a plausible future for new paragon of containers distribution from the Red Sea to Persian Gulf countries. The scenario will be based on geographic, economic, political and technical themes. Each theme gives us an aspect of view towards the plausible Saudi-Arabian-Land Bridge (SLB).

SCENARIO GENERATION PHASE

Maritime transportation is affected by many variables inside and outside of transportation generally. These changes can be summarized in five major categories according to importance: deregulation, new production patterns, marketing approach, globalization, technologies, and supply chain management. Wide ranges of quantitative and qualitative data have been examined to drive the SLB scenario. These data are called scenario main variables.

Maritime Environment and Global Trade

Geographical dispersion of goods' production and distribution activities, are directly related to the changing patterns in maritime transportation, and hence contribute to the complexity and evolving configurations in world trade. The changing pattern of maritime transportation and its continued development has had a powerful impact on the world output. There has been a big increase in cross-border transport, especially in Asia. Hinterland development in northwest China and Central Asia provides an opportunity for close cooperation with shipping lines. Accordingly, the corridor development process will involve replicating alliances with marine transport. All these have resulted in an increase in world production and international trade (see figure 1). As the figure clearly indicates, there is a close relation between the movements in world output and prevailing trends in the global sea-borne trade.

As growth of world economic activity increased to 3.3 per cent in 1994 and subsequently slowed down to 2.0 per cent in 1998, sea-borne trade followed this pattern by growing 4.1 per cent in 1994 and 2.2 per cent in 1998. In line with the development of world output, sea-borne trade growth in 1999 has reached a similar rate as in 1997.

Given these present developments and the prevailing expectations that Asian markets will continue their path to recovery, growth in total world maritime trade is expected to rebound to some 3 to 3.5 percent in the year 2004.15 Moreover, the total world fleet continued to expand in 2003, increasing by 2.3 per cent to 844.2 million dwt (see table 1). More importantly, Asian economies (the fastest growing economies of the last two decades) gained the largest comparative increase between 1980 and 2003 (Figure - 2). According to UNCTAD, the breakdown of world sea-borne goods by continent was as follows, "Africa's share of world exports was 8.8 per cent, while America's reached 21.2 per cent. Asia had by far the largest share of the world tonnage of sea-borne loaded goods - 37 per cent. Europe's share was the second largest, at 25.4 per cent, while Oceania's was the smallest, representing only 7.6 per cent of the total.

The breakdown for selected trading blocks was as follows: European Union (EU) - 17.8 per cent; Gulf Cooperation Council (GCC) - 12.5 per cent; North America Free Trade Association (NAFTA) - 10.2 per cent; Association of South East Asian Nations ASEAN) -7 per cent; South Common Market (MERCOSUR) - 5.2 per cent; and Common Market of Eastern and Southern Africa (COMESA) - 1.6 per cent."16 Shipping lines competition in more beneficial routs has led them in new cooperation types, of which a modern example is alliances. These alliances are diversified from shipping services only to port operation and inland transport.

Major goals for the trends are optimization of shipping capacities and market share. High degree of competition between alliances and technological advancements made them available large vessels and concentrate on port operations in hubs. These large carriers allow shipping lines to use advantages of economy of scales and decreased per TEU cost to 40% in some routes (See fig). In 1997 for example 60-70% of total shipping services in main east-west shipping routes was supplied by the four shipping alliances that put together 13 of the 20 shipowners17. This approach heighten the maritime transportation position between other transportation modes by use of advantages of economy of scales allows them to be concentrated on their essential function to ambiguous competition issues. Now, grand vessels in the way of container trade allow more reachable concepts such as capacity optimization, port hierarchy, and Multi-modal transport network and may be Saudi Land Bridge (SLB).

The above discussion leads us to identification of a variety of forms of causal relationships between transportation and economic development. They include:

• impacts on employer access to workforce diversity and access to specialized
  
• occupational skills (also affecting wage rates)
  
• manufacturer / shipper tradeoffs between logistics costs, inventory
  carrying costs and production scheduling costs
  
• effects on accessibility on development, growth and sustainment of
  business clusters
  
• role of transportation in supporting development of a manufacturing service
  nexus
  
• economies of scale in manufacturing, wholesaling and retailing, due to
  larger effective market area
  
• shifts and efficiency changes in trade flow patterns as some transportation
  facilities become saturated and other options open up
  
• differences in preceding effects between industries with different labor
  skill requirements and different market shipping patterns
  
• differences in preceding effects between different modes - which rely on
  different types of networks and serve different markets

Globalization of Container Distribution Centers

Evolution of containerization in 1960 and its continuous growth in the following years, make feeder shipping a well-designated operational element of container ports. It was the new era of maritime transportation around the developed world. But structure of containerized products was mainly machinery, heavy and light capital goods, durable household goods and like. The developing world needs the mentioned containerized products, leading to a developed-developing container trade pattern. To the end of 1980's major economic blocks consolidated.

South-East Asian official instruments and Japanese communication devices were transported to Europe, America and the Middle-East by container, and then a great amount of container cargoes trade flew. This growth continued and respectively great sizes for vessels have been emerged. How much the ship size is greater, the feeders volume of operation is greater too.

By increase of ships sizes, ports specialization, new economic blocks and information technology applications, maritime economy was persuaded to optimize ships volume and port performance (See Figure 4). Optimization requested calling only limited ports, then ship size assigned to ports according to new paragon. Classification of ports to support industrial hinterland led tonew concept as port business clusters, hub, and spoke. Global hub ports, regional ports, sub-regional ports and local ports are the core of new introduced hierarchy18. Now, approximately 30 percent of worldwide container movements are trans-shipped from hubs to other classes of port. Trans-shipment services provide shippers with additional routs option. Shipping lines rely on trans-shipment as a means of reducing the number of ships in use and multi port calls. While debates persist over the extent of future hub ports development, experts have denoted a number of features that should exist as successful hub ports. Gustaâf de Monie et al.19 have identified necessary criteria for either global or regional hub ports as; Location, Minimum deviation, Access, Container Terminal, 24-hour Operations, Turnaround, Costs, Favorable business environment, Eliminate bureaucratic rules and High-Frequency feeder network. It's obvious that shipping lines have great and effective role in choosing a port as a hub. They discharged containers in hubs, and feeders distribute them between other port classes.

Regionalisation of Port Activities

Unsustainable growth of the region in the 1970s is smoothed by restructuring and moving towards industrialization and value-added activities through the region. Awareness of the region's efforts in solving the mono product issue has provided a solution for human development and infrastructure investment. These changes range from macro socio-economic variables to high productive infrastructures, facilities and technology applications. Transportation and socio-economic changes in the Persian Gulf and Red Sea may activate some distribution centres other than traditional hubs, such as Dubai.

Great distribution centres of the region emerged because of their location -midway in the great shipping line, which covers all Gulf countries, including Iran as well as the west coast of India and the Eastern coast of Africa.

During this competition many countries of the region, lobbied for their own positioning but success was for UAE ports only, because of their excellent business infrastructure and conditions. Iranian efforts failed due to the revolution and 8 years of war, followed by dubious reformation policies. Now the new authority is 29 years old, but policy-makers in Iran are still making a wish list and have presented it as a plan for national development. Now large vessels call at Iranian ports, instead of Dubai and 80% of Iranian port containerization is due to Dubai trans-shipment.

Yemeni ports had no favor because of the latest communist domain and regionalized geographic position and peripheral socio-economic situations. Omani ports had efficient facilities but no economic attraction to do the role and no proper access for other neighbors. Saudi's western ports were dismissed due to no accessibility to the Gulf region. Now the ace is for Saudi's western ports if they prepare accessibility to the Gulf through railroad and highways from west to east coast in the Gulf. Because they can connect to the Red Sea or traditional shipping routes to rich societies of the Gulf with low distance and time, this provides a strong incentive for a new trend towards a commodity-based economy.Thus a Saudi Land-Bridge (SLB) is not so far away.

Current Pattern of Trans-shipment in Gulf's Region

Currently Dubai's Jebbel Al Ali container port is the regional distribution center; more than 75% of Gulf's container traffic is trans-shipped through Dubai21. Max-size container carriers call her from Southeast Asia, Far East, EU and North/South of America. Then an effective network of regional feeders trans-shipped containers to the regional and local ports as Shahid Rejaee of Iran transit to Mid Asia and Caucasus through Iran's borders, Kuwait, Dammam, Karachi, west coast of India and other Gulf States ports. In economic point of view, optimization of shipping lines port calls will be led to lower costs of trade. In other words, development concepts validated it because; this optimization will be led to high competitiveness for regional producers. Globally, can express that hub and spokes concept chooses the distribution network according to their comparative advantages.

According to Gustaaf de Monie criteria the region should revise the current pattern of container distribution. Jebel Al Ali container port geographically is not located very close to traditional shipping rout, but excellent economic and business condition precipitate it to be selected as a hub of region; however, there is another excellent choice. Here we are trying to find another choice that directs region to less transportation cost and time, then more competitiveness for the region. To do the job, scenario approach is chosen.

According to Figure 7, great container carriers, which round the traditional shipping route Jebel Tariq to Malacca Strait, provide services to the Red Sea and Persian gulf states (see Figure 5) through calling at the port of Jebel Al Ali and Salala of Oman, and then these ports are responsible for container distribution to all states covered. To reach Jebel Al Ali these carriers are required to carry at least 3.5 days of navigation costs. It seems that if another suitable port with low cost and time services can be found, the region's competitiveness and efficiency will be increased. Saudi Arabia may be able to do the job well. The scenario of a SLB tries to clarify the topic. A Saudi-Land-bridge multi-modal facility as an alternative to Jebel Al Ali, will be defined.

Saudi Geographic position and transportation policies towards SLB

Mainly traders and pilgrims have used the 1300 miles of coastline to penetrate Saudi from BC, as a holy land for Muslims. Some of Saudi's transport policies have obeyed the Hajj however economic diversification and moving away from oil based economies has led to them providing quality infrastructure for commercial services in the future. According to comparative advantages theory of production, the Saudi geographic position allows them to reap the advantages of transportation services. Saudi is located in a critical geographical position with its Red Sea coasts mud way in the main EU/North America/Far East/ASEAN location, allowing them to provide services to the large carriers with no deviation from the main haul and to the South and East coast of Africa. On the other hand, its long coasts on the Persian Gulf allows them to support the Gulf States and Iran. It can also provide services to mid-Asia and the Caucasus though Iranian borders. Saudi provides access to more than 15 states with about 220 million people though its coast and land territories.

Saudi development is directly related to oil prices and increasing oil prices since 2003 has put aside reserves of many dollars to be spent on infrastructure, we studied the Saudi transport policy in the 2005 speech of the transport minister, who stressed:

"King Abdul Aziz, the founding father of modern Saudi Arabia, had a vision for opening Riyadh, the landlocked Capital of his Kingdom to the outside world. He saw that objective was best achieved by building a railway line that would connect Riyadh to the Kingdom's two major ports: Jeddah on the Red Sea, and Dammam on the Gulf". It is obvious that, connecting the Red Sea to the Gulf has been a hope of Saudi's leaders and it is under plan. He noted that "The Supreme Economic Council, chaired by HRH Crown Prince Abdullah Bin Abdul Aziz adopted a resolution authorizing the implementation of a 2900 km Railway Expansion Program. The Saudi Land-Bridge Project represents the cornerstone in the Expansion Program. The Land-Bridge will integrate through a railway-connected network, Saudi Arabia's three largest commercial ports. It will be the first rail link between the Red Sea in the west and the Gulf in the east and is expected to have an important positive impact on shipping patterns in the Region 24".

Saudi policy makers have understood the strategic importance of SLB and its prospects as a regional Land-Bridge to provide particularly, container services to the region. It can be inferred that the SLB will act as a catalyst for regionalization and opens new markets to the region for peripheral producers (North-South and conversely, into the region). In the next step, the SLB scenario will be developed on three main themes: economic, (SLB demand, cost of institutionalization, service price for container cargo, cost of Saudi's port's instruments); technical, (SLB rail, network); geographic (cargo haulage estimation and geographic decrease in distance and time) and political, (cargo, regionalization, political stability, security).

Saudi Socio Economic Condition

Saudi Arabia is an Islamic wealthy and oil-rich country, which has occupied 1,960,582 sq km of peninsula (80%)25 and owns 26% of all proven world oil reserves which supply 15% of US oil imports26, with a population if 24 million and a great Middle East economy spending $150 trillion on development project over the few next years27. More than 75% of total national revenue, 40% of GDP making up of oil exports and 8.8 to industry (which are mainly located in the Jubail and Yanbu industrial FTA and Riyadh (3.6 millions of population))28.

More than $150 billion from oil export revenue in 2005 increased the GDP per capita to
12800$, and economic growth from 7.7, 5.2, 7.5 for 2003-5 respectively29. Commercial service exports provide for Saudi more than 4.5$ billions per year with a growth of 6%, as a great commercial exporter from 1995-2002 in the region, however, 44.1 of GDP was made up of services in 2005. The greatest Saudi trade partner is the US and makes up $6 billion of the US's export to Saudi or 1% of total US exports. This has tied them to each other and has made Saudi one of the important US allies in the region. It may secure Saudi's stability for the next decades. However, these great oil industries include only 1.8 of national employment and 8.1 is due to industrial sectors. Unemployment rate is 13 to 25% according to a Saudi and US government statement. Employment is a permanent Saudi problem because it relies on 6 million foreign expert workers. Saudi became the 149th WTO member in Dec 200530.

Although some democratic reforms have been implemented, Saudi Arabia still operates as a near-absolute monarchy31. Elections in 2005 for the first time allowed Saudi male citizens to choose municipal representatives32. The royal family dominates government and politics in Saudi Arabia. The family's vast numbers (hundreds in the main family alone) allow it to control most of the kingdom's important posts and most members of the Council of Ministers and provincial governors come from the royal family33. Saudi Arabia has strong ties to the nations of the Middle East as well as to other Muslim states and developed nations such as the United States and Japan34. As the guardian of Islam's holy places, Mecca and Medina, Saudi Arabia hosts millions of pilgrims from neighboring Islamic countries annually. US department of state estimates that the literacy rate is about 85%35.

Wealth is very good if it comes from not only oil or natural resource-bases. Saudi is the same as any developing country that wants to diversify its economy and boost it with trade and industry. To do this, Saudi has focused on infrastructure constructions rather than the oil sector. From a legal point of view, they have liberated foreign investment and held many exemptions in the free trade area, especially in port (economic areas).

Theory of Land-Bridge and Examples

The theory of land-bridge (LB) includes a range of various transportation modes for accessing hinterlands through another country(s) or land(s). Now the Trans-Siberian LB for carrying cargo between North-East of Asia and North of Europe is well-operated from the Russian port of Vostochny to Moscow and expanded to the north of Europe, the Iranian LB for carrying cargo to the Middle Asia and Caucasus through the Persian Gulf to the Caspian Sea and Salinacrose-Veracrose LB (Mexico) for connecting eastern and western coasts of US and New York -Los Angeles LB in the US, are some famous examples.

Main requirements for SLB include:

1. Well-equipped ports at the Red-Sea (for example Jeddah).
   
2. Well-equipped ports at the Gulf (for example Dammam).
   
3. Land transportation services from west to east coasts and conversely (Railway/Highway).
   
4. Good feeder network services at Red-sea and Gulf.
   
5. Potential markets (Gulf, east of Africa and west of India).

SCENARIO DEVELOPMENT

Geographical theme

Saudi Arabia is the third biggest connectivity state in the region; table 1 in the appendix shows the connectivity rank and index for selected economies. The connectivity of Saudi is related directly to their geographical position. The main east-west route crosses Saudi's Red-Sea ports in the midway-and main shipping lines call to their ports. SLB can affect a region's current trans-shipment procedures, in time and cost.

The SLB impacts can be summarized into 5-736 (turn and return of peninsula to the Persian Gulf) days of saving transit times to the Gulf States. However, shipping lines can optimize the capacity of vessels and save costs of shipping to $4000037 for each day of less navigation. Transit time for containers will be at maximum 48 hours stack to stack between Jeddah and Dammam ports38. SLB charges $170 excess expenditure per TEU, but shipping lines can decrease their cost to $200-$280 thousands per each main EU-Far East voyage. This means they can reduce the Gulf's container cost. Table 2 shows excess costs charged per TEU through the rounding peninsula according to percentage of payment by the region's containers or broken down into other containers, However, SLB railway charged each container only $170 per TEU. Then, it is obvious that, the competitiveness of region producers will be ensured through the use of SLB.

Technical theme

SLB will be equipped with 40 double stack container trains per day with a maximum of 400 containers each, running at 120 Kph but 4-5 high speed trains travelling at 220 Kph, carry 5760000 TEU per year for 360 working days. Jeddah as a Red-Sea hub port channeled containers through SLB to Dammam and then trans-shipped to Iran, Iraq, Kuwait, Qatar, Bahrain and UAE ports; however, in a wider view some containers visit two industrial sites in Yanbu at the Red-Sea coast and Jubail at the Gulf's coast at the ends of SLB. Currently Saudi's rail network is expanded between Jubail to Dammam 115 Km and Dammam to Riyadh with 556 Km, which is used only for freight transportation and is managed by the Saudi Rail Organization (SRO). The expansion program will add 3200 Km to the existing network and connects all major cities around the nation.

Two well-equipped ports with additional facilities are required to functionalize the SLB to trans-ship containers to the Gulf's states. This means, the Jeddah container terminal will load the discharged containers on the coast of the Red-Sea and Dammam to serve feeder lines in the Gulf.

Regional producers expect to decrease transportation costs and time and also receive frequent and reliable services, because the main producers want to re-schedule themselves to provide a fast-response and the job is the responsibility of transportation. SLB with fast freight trains will do this, but a comprehensivefeeder network in the Gulf area is required to distribute containers to local ports.

Presently about 13.3 million of TEUs cellular ships are traveling in the main haul39, which means new hubs should be ready to serve these types of ships. In the SLB transportation process, Jeddah will be called at by cellular and mother ships but Dammam will serve mainly feeder vessels. Now Jeddah is operative with two container terminals with a capacity of 1.2 and 2 millions of TEU respectively, the latter is operated under DPA40 management. Hub ports in 2010 should be able to serve grand ships with 8000 TEU or more with 4 synchronized gantry cranes with 2500 thousands TEU per berth per year41. Each berth needs to be 300 meters long with 13.5-16.5 meters of draft42. Jeddah as the starting point of the SLB should be equipped with these conditions, but Dammam needs to be armed with instruments to serve Handy-size carriers. Presently productivity of each gantry crane in Dammam and Jeddah is 28-32 moves/hour/crane, and the operation process assigns two cranes to each 2000-3000 TEUs ship then productivity of each 250 meters of container berth would be about 65 moves/hour.

Economic Theme

To generate another aspect of the scenario, main trends and events in economic, trade and
transportation systems have been examined. To estimate the potential demand for SLB and its establishment justification, market analyses are applied and they compare its potential revenue to the financial requirements. Saudi Dammam Port, Iran, Iraq, Kuwait, Bahrain, Qatar, and Dubai are potential customers for SLB. To draw the potential demand for SLB, three optimistic, moderate and pessimistic scenarios are used. In the optimistic scenario 50% of Dammam container trade43, 10% of Dubai44, 75% of Iran45 and total of Kuwait, Qatar and Iraq46 container trade is assumed will be trans-shipped through SLB. In the moderate scenario 50% of Dammam, 5% of Dubai, 50% of Iran and 70% of others are examined. In the pessimistic scenario 50% of Dammam, 2% of Dubai, 30% of Iran and 50% of others are estimated as potential and plausible demand for SLB. Oman and Yemen are not included because their position is not proper to receive SLB services.

The average containerization trade rate during 1998-2004 was 9.7%, 12.5 for total world and developing economics respectively See Figure 6), but in the Gulf area with high fluctuation, ranged from 77% to 12% because some countries such as Oman and Yemen have come into containerization trade only recently. Growth of 2003-2004 registered as 27%, 21 and for 2002-2003 and 2001-2002, 17% and 12.75% registered respectively. We use them as three scenario inputs to show potential demand. According to above, assumptions Table 3 as the potential demand for SLB has been exploited.

Total container trade for the region according to the scenarios' growth assumptions for each nation according to the above table, the 13521332 TEU of 2005 will increase to 72-40-32 millions of TEU for the region. To obtain SLB potential demand, assumptions for SLB potential customers are applied to the above table and then table 4 is derived.

In the optimistic scenario, potential demand will be 18 million of TEU at 2012, 8 and 5 million of TEU for moderate and pessimistic scenarios in 2012.

The cost of SLB establishment is estimated at about $5-10 billion(52) to connect the east port of Dammam to the west port of Jeddah through 449 km of current rail from Dammam to Riyadh and 950km of new rail, but may well cost double that because of its ambitious groundbreaking, 100 bridges, and 28 Km of tunnels53. The BOT contract for construction is the largest in the Middle East, until now and the private sector will do the job and the Saudi government will support, oversee and coordinate. Under the BOT agreement, the assets of the existing Saudi railways will be transferred to the concessionaires. This shows that Saudi governors understand the private sector's role more than neighbouring economies such as Iran.

Cost of new equipment for SLB ports is calculated according to World Bank Port Tool Kit assumption for new container terminal and potential demands derived from the scenarios54. Table 4 shows the calculations.

The role of Dammam is to transship arrival containers of SLB, then the Saudi share on the above Table, produced from demand scenarios, means Dammam should be ready to serve 11.5, 4.3, 2 millions of TEU in optimistic, moderate and pessimistic scenarios in 2012. Presently Dammam can handle 2 million of TEU per year(55). Here the major cost of SLB establishment relied on the share of railway SLB cost between 60 to 90% of SLB cost. If we assume Saudi railway cost per TEU will be same as Iran56 as a regional country that uses the railway to move containers inland, the average revenue for each container is about $170 for the railway system and port operation in Jeddah and Dammam cost $150 in two sides of the SLB, it means each TEU charge is about $320. Comparing the plausible revenues with plausible costs led to 3, 5 and 7 years for repayment of total capital cost (see table 5).

In any case Saudi policy makers should not view SLB as a revenue or cost center only. In national scope, SLB allows the east and west coast of Saudi to be connected to each other and the two industrial sites, Yanbu and Jubail can play their role in Saudi development more effectively. In the regional scope of view SLB increases regional competitiveness and acts as a catalyst for regionalization and to be a part of the Arabian railway network57. At last, Saudis' should see SLB as major infrastructure for development and success of the nation.

Political theme

In the past Saudi was important because of its holy shrine, servants and oil, moreover, new roles to play can be defined by Saudi territories and government. Through the SLB Saudi will ease other nation's ways into the regionalization process. SLB allows neighbors access to major trade routes through cost/time effectiveness. Saudi political initiatives in national and regional scope are major issues in the acceptance of others' use of its borders for transit and trans-shipment. It is obvious that transportation impacts can be instituted away from political actions; some famous examples are Iran territories for oil transportation by pipes, which naturalized with the Baku-Ceyhan pipeline and Salinacruise-Verinacruise (Mexico) Land-Bridge that defected by Los Angeles-New York New Jersey Land-Bridge introduction by the US government. Human rights, terrorism, fundamentalism and interventionism are major issues for Saudi during the latter years, but initiative changes in 2003-2005 made Saudi a well-institutionalized country in economic and political sector as to join to WTO and close its relations with the US after the September 11 disaster.

The Foreign Investment Law, enacted by the Saudi Arabian General Investment Authority (SAGIA), was set up to allow foreign investors to own property, and to transfer capital and profits, claim full ownership of their projects and enjoy a reduction in tax rates. The law protects foreign investors from confiscation of property without a court order or expropriation of property, except for in the public interest, against an equitable compensation58. Saudi Arabia and the US in 2003 signed an agreement to strengthen commercial and investment relations. This type of agreement with a major economic power can guarantee the SLB usage at least for mid-term. Saudi strengthening of cooperation with the Gulf States on one hand and enlargement of the Gulf's Cooperation Council to the upper side of Gulf can lead to an economic alliance, so that their synergies lead the region to more efficiency of production and competitiveness through usage of members' capacities. In any case, Saudi should consider and chase regionalization issues in the region more precisely to use its benefits to development.

SCENARIO CONTRACTION

In the scenario contraction phase, all the offered data is gathered on one shelter and shows how the scenario generated and developed. In scenario generation phase we examined global trade trends and events to draw their impact on containerization. Container center or hub ports emerged when technology and trade let the shipping industry produce great size vessels. We examined Saudi economics and geographical attributes to draw a picture of the Land-Bridge theory and scenario planning, to trans-ship the Gulf's containers through a more timely and cost effective route, than Dubai, which is the Saudi Land-Bridge or SLB. Figure 7 shows how the scenario of SLB emerged.

Here we contract the scenario generation as:

* Geographical dispersion of goods' production and distribution activities, directly related to the changing patterns in maritime transportation. Through this dispersion, containerization led to concentration and global and regional ports emerged; in shipping line activities global alliances were constructed.
* In the Gulf region, Jebel Al Ali emerged as a regional distribution center.
* Currently shipping lines divert from main haul to call at Jebel Al Ali to
deliver the region's containers.
* Saudi is a well-positioned territory in the midway of main haul of EU-Far
East and their policies are towards using the opportunities, and also this oil
Rich State has enough money to spend on the transportation development projects.
On the other hand, regional producers rationally want to decrease their cost of
Production.
* Land-Bridge theory requires essential facilities and non-physical
instruments also, as trade facilitation, to use of transportation facilities to
service regional and international producers.
*** Saudi can utilize trans-shipment pattern in the region through a
Land-Bridge.

Contraction of development phase:

• Currently trans-shipment pattern imposes on shipping lines 5-7 days of excess navigation that means about $200-280 thousands of excess cost. SLB can decrease it to $170 per TEU.
  
• New facilities in the port of Jeddah are needed to handle containers through SLB. Port of Dammam should prepare itself to bring about a well-designed feeder network. SLB railway should offer competitive freight rates not just with shipping lines but also with other regional railways.
  
• Total container trade for the region can be 13-32 millions of TEU to 2012 and potential demand for the SLB can be 5-17 millions of TEU with optimistic, moderate and pessimistic scenarios. The capital expenditure for the SLB will be $10-13 billion and more than 70% of total expenditure is directly for SLB railway. Total revenue for the SLB will be $1.5-5.7 according to three scenarios.
  
• Saudi should make ready political circumstances to make usable SLB for all potential customers, especially for Iran and Iraq as major customers.
  
• Saudi should provide more confidence for the major economies and producers such as EU, and US and for ship-owners.
  
• When SLB is in operation, the trans-shipment will be as shown in Figure 8.

CONCLUSION

Globalization and regionalization of trade and production led to concentration on maritime transportation and hub ports and shipping alliances emerged as a result. Through looking into trends and events scenario of Saudi Land-Bridge (SLB) emerged to utilize trans-shipment process to Gulf's State. Presently more than 80% of trans-shipment carried on in Dubai, brings to shipping lines 5-7 days of excess navigation, and then the cost imposed on the regions' containers. SLB can decrease the cost through non-deviation from the main haul, SLB can do the job by calling in at Jeddah with grand container carriers and then run them into Jeddah-Dammam railway, and then containers would be distributed into the region through well-designated feeder networks.

As mentioned in the body of paper, the scenario is chasing trans-shipment utilization through SLB. Presently Saudi has excellent conditions to do the job, because of its reformation and joining with the WTO in 2005. The private sector, which works under competitive circumstances, can take part in the SLB project through BOT contracts and offer competitive services to the regions' producers. There are potential demands of at least 5 million of TEU for the SLB, which under prospected arrangements with the Saudi government will be serving the private sector. Albeit, Saudi should make ready many conditions to alleviate the potential demands. Railway is the major cost center and an essential part of SLB, but Jeddah and Dammam should be ready to serve large size container carriers and the latter to serve feeder networks of the region. Feeder markets will be 11.5, 3 and 2 million TEU to 2012.

There are many issues other than cost and time to make a Land-Bridge usable, and then Saudi should alleviate other obstacles, which include political and foreign relations, especially in the region, and persuade other countries such as Iran, because of their economic capacity, to be a member of GCC59. Saudi should work on the institutions to spread development ideas to prevent retrospective action. SLB as a development instrument not only to connect west to east, or the Red-Sea to the Persian Gulf but also should view it as a development infrastructure, which can help Saudi to make strong institutions for trade and development. Do not forget information and resources are not the only means of development, because they can be purchased from international markets but new ideas are vital for development and are not purchasable.

APPENDIX

ACKNOWLEDGEMENT

I SHOULD STRESS MY DEEP THANKS TO DR ALI PIRZADEH FROM UNIVERSITY OF WASHINGTON, HE LET ME TO USE OF HIS UNPUBLISHED PAPERS AND SEND ME GREAT PROSPECTIVE ON REGIONAL ECONOMICS AND FOR HIS PROMOTION DURING PREPARING THE PAPER. AND TO DR PARVIZ BAVARSAD FROM KHORAMSHAHR UNIVERSITY OF MARITIME TECHNOLOGY FOR INTRODUCING SCENARIO APPLICATION IN MIDDLE EAST TRANSPORT FOR THE FIRST TIME.

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45. Presently 85% of Iran container trades are transshipped from Jebel Al Ali.
    
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48. For Saudi Arabia only traffic of Dammam is included, other container trade don't use of SLB.
    
49. Dammam throughput is more than 2 millions presently.
    
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