Emaar Economic City (Emaar EC) and DP World have signed a deal to develop and run new facilities at Saudi Arabia's King Abdullah Economic City (KAEC).

According to Emaar EC, the new port is designed to ultimately handle up to 20 million TEUs per year - a capacity that would make it one of the world's ten largest ports and the largest port in the Red Sea.

“With its strategic location on the Red Sea, the KAEC Sea Port will create a regional logistics hub that will further stimulate the Saudi economy through new job and investment opportunities,” said Emaar EC chairman Mohamed Ali Alabbar.

Scheduled to be operational by end-2010, the new multi-purpose cargo facilities would be joined by a separate terminal for containers by mid-2011.

The new dedicated container terminal would initially have a handling capacity of 1.6 million TEUs, Emaar EC said in a statement. Thereafter, the port's capacity will be increased in phases.

The new KAEC port will be the first in Saudi Arabia to be completely financed by the private sector.

Saudi Arabia is committed to becoming "one of the world's ten most competitive economies by 2010,” Governor Amr Al Dabbagh of the Saudi Arabian General Investment Authority said, according to local reports.

“To achieve our goal, we encourage major local, regional and international companies to invest in the infrastructure to augment investment in high-growth strategic sectors, which contribute to overall economic development,” Al Dabbagh said.

Sultan Ahmed bin Sulayem, DP World and Dubai World chairman, called DP World's facilities a “vital link in the global supply chain, enhancing efficiency and the growth of economies in the communities in which we (DP World) operate”.

Developer Emaar EC is the Saudi Arabian unit of Dubai's Emaar Properties.