Key issues related to ownership and procurement model remain despite the strong interest generated among contractors, consultants and investors by the King Hamad Causeway scheme.
According to a consultant familiar with the scheme, there needs to be greater clarity in terms of inter-state ownership of the project, as well as the coverage of the public-private partnership (PPP) contract.
Unlike the first causeway, which is being managed and operated by the King Fahd Causeway Authority (KFCA), the new scheme has three stakeholders : the transport ministries of Bahrain and Saudi Arabia as well as the KFCA.
Furthermore, the road and rail segments will also utilise two different procurement models.
While a build, operate, transfer (BOT) model will be adopted for the road, a design, build, transfer or design, build, maintain, transfer model is expected to be adopted by the rail component of the project.
According to the project brief provided by the clients, the rolling stock and track operations of the 70km rail, a segment of which will be in the same alignment as the existing causeway, will be provided by other parties.
Rolling stock and rail systems providers such as Alstom, Siemens and Thales were not invited to express interest in the scheme.
This could mean greater risk for the special purpose vehicle (SPV) that will be formed to design, finance and build both the rail and road segments, and operate the road but not the rail segment of the scheme.
An investors main priority would be to minimise his capital expenditure (capex) so why would he build a rail link if someone else will operate it, the source tells MEED.
Close to 100 firms expressed an interest on 29 June for the King Hamad Causeway project, which will link Saudi Arabia and Bahrain.
It will feature a 25km road and rail causeway in the same alignment as the existing King Fahd causeway. The railway segment will extend inland by another 21km into Saudi Arabia and 24km into Bahrain.
A transaction adviser is expected to be appointed for the project early next year.