A joint venture of the local Al-Rashid Trading & Contracting Company and the European Aeronautic Defence & Space Company (Eads) has won the SR3.4bn ($907m) contract to build a 900-kilometre-long security fence along Saudi Arabia’s northern border with Iraq.

The joint venture received a letter of intent in mid-June from the Interior Ministry and expects to sign the contract in July, with site mobilisation due imminently.

The contract covers two packages of work that the ministry had considered offering as two separate contracts. It had asked firms to bid for the separate packages.

The first package covers the 900km, double-lined fence and includes surveillance equipment, watch-towers and electronic gates. Package two covers the civil works, including command centres, training centres and accommodation for border guards.

According to Khaled el-Seif, chief executive officer of the local El-Seif Contracting Company, which also bid for the contract, the value of the civil works is about SR2bn.

The original bids were submitted in October 2007, with the expectation that a contract would be awarded by the end of the year.However, the decision was delayed by the proposal to split the contract because of the rising cost of raw materials, which has increased the level of risk for bidders. The delay was also due to Riyadh seeking to standardise the systems it uses across a wider proposed network.

The northern border fence forms part of a multi-billion-dollar project by the Interior Ministry to install a radar-based system for detecting incursions along the entire length of the kingdom’s 6,500km border (MEED 6:7:07).

“It is possible it wishes to ensure the security system is the same across the entire border and it is thinking how to integrate a full border surveillance system, which works on the Iraq border as well as the rest of the kingdom,” says one contractor.

The next major contract to be awarded as part of the wider scheme will be the security system covering the western coast of the kingdom and the southern border with Yemen, with bids due to be submitted soon. The Al-Rashid/Eads joint venture is likely to be among the bidders for the work.

Other firms that bid for the northern border fence contract include the local Al-Arab Contracting Company (ACC), and the local Al-Mabani with the US’ Raytheon. El-Seif formed a consortium with the US’ DRS technologies for its bid.