Riyadh to award border fence work at third of original price

05 September 2008
Bids resubmitted in August following a scaling back in the project’s scope.

Riyadh could award the second phase of the kingdom’s border fence contract at less than one-third of the original highest bid, sources close to the deal tell MEED.

Three groups are competing for the Interior Ministry contract that is due to be awarded in October, following a scaling back in the scope of the project and the resubmission of bids in August.

The bidders include the local Al-Rashid Trading & Contracting Company (RTCC) in a joint venture with the European Aeronautic Defence & Space Company (Eads); the US’ Raytheon; and the local Madaf for Trading & Contracting with France’s Thales (MEED 25:7:08).

While the bids for the project originally came in at up to SR37bn ($10bn), one source close to the project says the new bids could be less than one-third of this, following the scaling back of the scope of the project.

“The size of the project has totally changed,” says the source. “It could be more like SR10bn. The initial system was good for land, but not for sea, and a large proportion of the project borders the Red Sea and the Arabian Gulf.

“Now the major element of the project - the compounds, the headquarters, for example - are not in the scope. Only the towers, cameras and radar are included.”

The project covers a distance of approximately 6,000 kilometres. It involves installing a radar-based system to detect incursions along Saudi Arabia’s border with Jordan, Kuwait, Qatar, the UAE, Oman and Yemen, as well as along its Gulf and Red Sea coasts.

It is the second phase of the Interior Ministry’s plan to improve security along the country’s land and sea borders, and is the biggest security project of its kind in the world.

“We have been promised that after the Eid holiday they [the Saudi government] will announce the result,” says the source.

The changes to the scheme have not altered the scope for the first phase of the project, which covers the border with Iraq.

In June, a $900m contract to build a fence along that border was awarded to a joint venture of RTCC and Eads.

The phase 1 contract covers the construction of a 900km-long security fence along the Iraqi frontier (MEED 20:6:08).

BORDER FENCE IN NUMBERS
Value of the highest initial bid for phase 2SR37bn
Likely value of scaled-back workSR10bn
Length of the border fence6,000 miles
Value of Contract for phase won by RTCC and Eads$900m
Source: MEED

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