The Saudi Railways Organisation (SRO) is inviting bids for the second main construction contract on its $7bn high-speed railway between Mecca and Medina.

The rail regulator has asked six prequalified international consortiums to prepare bids for the $1.4bn operations, signalling and maintenance deal, according to one official at the SRO.

Bidding on the contract will begin after Ramadan finishes in mid September.

“We hope the contract could be awarded by the end of the year,” says one executive in the consortium led by the local Al-Shoula Group, which has been prequalified for the bidding. “The signalling and operations contract is worth 15-20 per cent of the total, so it is a huge package.”

At the same time, the SRO official confirms that prequalification for a contract to build the four stations on the railway – the third main contract – will begin before the end of the year. A joint venture of UK architects Foster & Partners and Buro Happold is currently designing four of the five stations on the 444-kilometre-long line.

The SRO had planned to start the bidding process on the contract to build the stations in April this year, but instead decided to bring in the two architects to produce world-class designs for the new stations at the holy cities.

The SRO prequalified six consortiums to build the stations back in June 2007.

In 2008, rival consortiums led by Saudi Binladin Group and Spain’s OHL International merged to bid, unsuccessfully, for the first construction contract to prepare the ground for the rail line.

“So far, we have no indication if the consortiums will merge again,” says the SRO official. “At the moment we have six bidders, but that could change over the coming weeks.”

In early 2008, the SRO scrapped its original build-operate-transfer deal to build the Haramain railway and relaunched the contract under a public-procurement structure. This year, the scheme has made rapid progress.

The Al-Rajhi Alliance, led by Saudi Arabia’s Mada and Al-Rajhi groups, won the first main construction contract to carry out civil works on the project in March this year. The consortium, which also includes China Railway Engineering Corporation and France’s Alstom Transport, submitted the lowest bid of SR6.9bn ($1.8bn) and broke ground on the line in July.

The Haramain line will connect Mecca with Medina via Jeddah and King Abdullah Economic City. The high-speed trains will reach speeds of up to 300 kilometres an hour.

Rail contractors see Haramain’s move to a public-procurement structure and progress since then as a precedent for other projects.

On 21 August, MEED revealed that the $7bn Saudi Landbridge project will follow suit, with the government stepping in to bankroll the railway linking the kingdom’s Gulf and Red Sea coasts.

Private banks have been unwilling to finance the project in a difficult credit market (MEED 21:8:09).