Healthy turnout for rail advisory

20 December 2002

Saudi Railways Organisation (SRO) has shortlisted eight international groups to bid for the consultancy contract for the planned east-west coast railway. The build-own-operate (BOT) project is one of the government's most significant commitments to foreign and private investment in the kingdom to date, and has attracted strong interest from international firms. More than 30 companies expressed interest in bidding for the contract in November, and industry sources say an equally high turnout is expected for the legal advisory, for which expressions of interest were due to be submitted on 21 December (MEED 8:11:02; 4:10:02).

The successful bidders will provide financial, legal and technical advisory services for the construction of a 950-kilometre rail link between Riyadh and Jeddah, and a second 115-kilometre link between Dammam and Jubail. Both stretches will connect to the existing railway between Riyadh and the Gulf coast.

The advisory mandate also provides for a feasibility study for an extension into the Hijaz, linking the cities of Mecca, Jeddah, Medina and Yanbu. On completion in 2010, the railway will effectively link the kingdom's two largest ports and its two largest industrial cities, Jubail and Yanbu. The scope of both consultancy and legal works is broad. The successful legal adviser will be expected to recommend changes to the legal and regulatory environment for the working of the railway in the private sector.

A decision by the subcommittee of the Supreme Economic Council is expected in January on the second major rail project in the kingdom, the 1,200-kilometre minerals railway. The industrial railroad will connect to the planned east-west link and existing rail network at Riyadh. Saudi Arabian Mining Company (Maaden)and Saudi Oger, which are promoting the Jalamid phosphates project, are understood to be waiting on the government to decide on the level of its own participation in the railway scheme before tendering the estimated $1,500 million project.

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