Saudi Arabia has officially dropped plans to develop a SR60bn ($16bn) rail project in Mecca on a public-private partnership (PPP) basis after the government agreed to fund the scheme directly.

Al-Balad al-Ameen, the development arm of Mecca Municipality, is now looking for a consultant to help develop the Mecca Mass Rail Transit (MMRT) project, and bids for the role are due by 9 February 2013.

In late August, the Saudi government approved full public funding of the broader Mecca public transport programme (MPTP) including both the MMRT and a new bus network, ending several months of speculation that the project was to be funded directly from the state purse. Sources close to Al-Balad al-Ameen added that the Saudi budget, announced on 29 December, is expected to give further details of how work can progress on the scheme once the finer details are disseminated.

In March 2011, Ernst & Young, Parsons Brinckerhoff and Ashurst were appointed to advise the municipality on the project when it was being planned as a PPP. Those advisers are no longer involved in the rail scheme.

The project involves the construction of four rail lines and more than 180km of track. The feasibility study, conducted by the advisers on the scheme when it was planned as a PPP, said the project could cost SR60bn financed over 14 years, but would require significant public subsidy. As a result, Riyadh instead decided to pay for the scheme directly.

On 8 December, Al-Balad al-Ameen issued a request for proposals for a programme management office consultant, to help advise it on the development of the wider MPTP scheme. It wants to have appointed a consultant by 9 March 2013 as it tries to pursue an aggressive timeline for the MPTP projects.