Recent media reports have suggested that the $2.5bn project is suffering from severe delays because of a deteriorating relationship between Saudi Railways Organisation (SRO) and the Tarabot consortium.

The Tarabot group is led by Arabian Company for Power & Water Development (Acwa Power) and was named as preferred bidder in March (MEED 7:3:08).

However, one source working on the project insists that discussions are ongoing and are sticking to the timescale originally anticipated by Riyadh, despite the traditional summer slowdown.

“Talks between all sides are ongoing and the next stage is waiting for the necessary approvals from the Saudi government,” he says.

“We are obviously going through a quiet period after the summer and now that we are going into Ramadan.”

The SRO and its adviser UBS are in the final stages of choosing between rival bids submitted by the Tarabot group and the second-placed Tracc consortium, which is led by Saudi Binladin Group.

An award on the project is expected in the fourth quarter of the year.

The winning consortium will design, finance, build and operate a 950-kilometre line between Riyadh and Jeddah, along with a 115km section of track along the Gulf coast between Dammam and Jubail.