Riyadh sets the pace for heavy rail

13 September 2010

As the first phase of the North-South minerals railway nears completion, Riyadh proves it can deliver major rail schemes on time. The only sticking point is the future of the Landbridge project

Just Dubai Metro launched a new era of urban rail projects in the Arabian Peninsula, it is the Gulf’s biggest economy, Saudi Arabia that is setting the pace in heavy rail in the region.

Since British army captain TE Lawrence led Arab forces in revolt against the Ottoman Turks, sabotaging the Hejaz Railway in 1917, it has taken almost a century for a new rail network to be built on the Arabian peninsula. Unlike Iraq and Iran, much of the Levant and North Africa, Arabia has been left with no rail legacy from the colonial era.

The Landbridge is now postponed indefinitely. There are still lots of questions over it

Source at Saudi Railways Organisation

The result is that, while other countries upgrade the decaying infrastructure left by the British or French, Saudi Arabia has launched a series of massive greenfield developments in one of the largest and most ambitious rail construction programmes ever undertaken.

Saudi Arabia’s railway nearing completion

The first of these projects is now only weeks from completion. The 1,486-kilometre North-South minerals railway, will link the phosphate and bauxite mines at Jelamaid in the north of the country, to the industrial complex at Ras al-Zour on the Gulf coast.

The three main sections of the line are now almost complete. About 1,200km of track is now in place, with contractors laying 2.5-3km a day. “We are working on the signalling now and the final sections of track are being laid. The electrical systems along the line are also being put in place,” says Salman al-Madi, marketing director for Saudi Arabian Railway (SAR), which is overseeing the project.

“We are on schedule to begin operations during the first quarter of 2011, although it is possible the project could begin operating as early as December.”

In August, SAR received a first consignment of 125 wagons for the line, the first of 668 to be delivered from Chinese manufacturers CSR. The rest are ready for export in China and will arrive by the end of October.

By early-September, the first six diesel locomotives from US firm Electro-Motive will arrive, with a further 19 to follow in October. Each engine has been specially designed to cope with the intense heat and harsh conditions it will face in the Arabian desert, with pulse filtration systems and sand ploughs. Training of train drivers and technicians will begin in October.

In March, Rites, the Indian state-owned engineering and consultancy group, was awarded the SR278m ($74m) contract to operate the railway. This contract will run until the end of 2013 on an initial basis.

Once operational, each locomotive will haul 100 wagons, carrying 15,000 tonnes of cargo with each trip. Each journey is expected to carry the same amount of raw material as 600 trucks on the road.

“The railway will cut road traffic and be much more efficient and economical. It is not just the speed of the trip, but of loading and unloading at each end. The case for the project is clear. It is common sense,” says Al-Madi.

Work is also progressing smoothly on the passenger line that will accompany the freight line from 2013. The railway will carry passengers south from the city of Hail to King Khaled International airport in Riyadh and north to the Jordanian border at Haditha.

SAR is still assessing bids to build six new passenger stations along the route and expects to make an award by early-September. 

In September 2009, a Saudi-led consortium was formally awarded the $720m fourth construction package on the project. Al-Ayuni Trading & Contracting Company and Al-Abdulaziz al-Omer Establishment for Trading & Contracting have begun work on the 480km line from Al-Zabirah junction to the capital. 

“We have a lot of holidays each year and people like to get away to Lebanon, Jordan and Syria where it’s cooler,” says Al-Madi. “When the line is finished it will be much cheaper to put the car on the train and go overnight.”

Just as important as the economic benefits of the minerals project itself, Riyadh has demonstrated with the North-South line that it can deliver a major rail development on time and on budget. Early delays in construction have been ironed out. Although the backing of the nation’s oil billions helps, the efficient stewardship of the project by the Public Investment Fund of the Finance Ministry (PIF) has been key to its smooth progress. Contractors are privately complimentary about the manner in which the PIF has cut through Riyadh’s often slow and byzantine bureaucracy.

Financing on track for Saudi railway

The fund’s other key heavy rail development is the $7bn Haramain high-speed line between the holy cities of Mecca and Medina. Since the project was brought under the PIF’s umbrella in 2007, progress has been relatively swift.

The 444km line will cater for the 10 million annual visitors to the kingdom’s holy sites, adding a new transport option from the country’s main airport in Jeddah, which itself is receiving a multi-billion dollar facelift.

When it is complete in 2013, the Haramain line will carry passengers at speeds of up to 300km a hour, linking Mecca and Medina via Jeddah and King Abdullah Economic City (KAEC).

The project will complement other tourist developments in the holy cities, including huge new hotel projects and expansion of the Grand Mosque in Mecca itself. Riyadh hopes eventually to attract about 10 million Hajj pilgrims a year, up from the present 3 million.

The consortium led by Saudi Arabia’s Al-Rajhi and Mada groups has begun work on the $1.8bn civil works contract, which it won early last year.

Bids have been submitted for the other two main construction contracts on the projects.

Two groups, led by the local Al-Rajhi and Al-Shoula groups, have submitted bids to lay the track, provide signalling and telecoms, operations and maintenance for the entire project. France’s Alstom and Talgo from Spain represent the two consortiums’ respective bids to provide the high-speed rolling stock for the line. The third major construction project is perhaps the most prestigious. The winner will build four of the five stations on the project. The stations have been designed by a UK partnership of Foster & Partners and Buro Happold.

The station at Mecca will be adjacent to the grand mosque, and has been designed as a spectacular point of entry to the holiest site in Islam.

“We are now evaluating bids for the last two major contracts and expect to award both by the end of the year,” says a source at the Saudi Railways Organisation (SRO), the project client.

“Once we have these contracts sealed the project will really begin to move forward. The civil works contract under the Al-Rajhi consortium is progressing well. We are still on schedule to begin operations in 2013.”

In an unexplored market such as Saudi Arabia, doubts have been raised about the financial viability of these rail projects. In the wake of the global economic crisis, international banks have been unwilling to finance developments on this scale.

Backed by the Saudi government, banks have been willing to back contractors working on the North-South and Haramain projects.

The $1.8bn monorail under construction in Mecca will connect the holy city to the sites at Mina, Arafat and Muzdalifah, providing a mass transit system for the thousands of pilgrims to visit the area each year.

China Railway Company was awarded the contract to build the monorail in February 2009 and had begun work by the summer. The monorail is scheduled for completion in 2011, but Riyadh is still hopeful that part of the line will be open in time for this year’s Hajj pilgrimage season in 2010.

A report by the Supreme Hajj Committee last year estimated that when it is fully operational, the monorail will be capable of handling 500,000 pilgrims every six to eight hours. The committee also said that once up and running, the network will go a long way towards alleviating the chronic road congestion in and around Mecca, with up to 53,000 buses and other vehicles removed from the roads.

Facing delays

By contrast, the $7bn Saudi Landbridge project has floundered precisely because it is no longer clear that the line serves a clear purpose. Two bid rounds failed to deliver a contract agreement that was satisfactory with both sides.

The Landbridge was once the flagship project of the Saudi rail programme, linking the Gulf and Red Sea coasts by rail for the first time in history. Officials in Riyadh claimed it would change the face of trade in the region, slashing the time taken to sail round the Arabian peninsula by offering a route across it.

These plans began to be undermined however, when shipping groups made it clear that unless the railway was built on a colossal scale, it could never handle the cargo volumes needed to persuade them to overhaul their networks.

Three rounds of bidding have failed to deliver a solution that satisfies both client and contractors. In August 2009, MEED revealed that after months of speculation, the government said it will reissue the stagnant project as a public procurement scheme.

The fundamental doubts over the project remain, however. “The Landbridge is now postponed indefinitely. There are still lots of questions over it,” says the source at the SRO.

“I don’t think we will look at it again until the Haramain project is out of the way.”

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