Riyadh to decide on Landbridge

22 March 2011

Four groups prequalified for the build, operate and transfer deal in 2009

The Saudi Railways Organisation (SRO) expects to hear a final decision “soon” on how to progress with the stalled $7bn Landbridge railway project.

The SRO has completed reviewing the financial bids from four prequalified consortiums, which submitted bids to carry out the project in 2009. The prequalified consortiums are headed by Kuwait’s Agility Logistics, the local Mada consortium, the local Saudi Binladin Group and Al-Muhaidib/Acwa (Tarabot).

It is not yet confirmed if the SRO will award the contract on a build,operate and transfer (BOT) basis or if it will retender the project using a simpler engineering, procurement and construction (EPC) contract.

“We hope to hear a final decision on this very soon,” says Ali al-Karni, vice president of technical affairs at the SRO.

Main rail projects in Saudi Arabia
Haramain highspeed SRO$7bnUnder way
Mecca MRTMecca Municipality$1bnUnder way
Riyadh metroArriyadh Development Authority$3bnPlanned
MRT=Mass rapid transit. Source: MEED

The Saudi Landbridge is a 950-kilometre long passenger and cargo railway that is designed to create a link between Jeddah on the Red Sea coast and the ports of Dammam and Jubail on the Gulf coast. The Landbridge will also pass through the kingdom’s capital Riyadh.

The project has been through a complicated tender process. It was initially planned to be developed on a 50-year BOT scheme financed through debt. In August 2009, the Saudi government decided to fund the scheme on its own after private banks proved unwilling to finance the project. The project was then retendered again on a BOT basis.

The Landbridge will be able to transport eight million tonnes of containers each year when complete.

A sign that the Landbridge project could start moving forward is the new Saudi Railway Masterplan that outlines the kingdom’s railway development up until 2040.

The masterplan is being carried out by the German Corporation for Technical Cooperation in a joint venture with local Fayez Zuhair Architectural Engineering and Consulting (MEED 29:12:10).

It includes plans to develop two railway lines that spur off from the Landbridge. One is a 660km line between Jeddah and Jizan. This line will transport about 884,000 passengers and 1.2 million tonnes initially increasing to about 1.9 million passengers and 3.1 million tonnes by 2025.

The 706km second spur will link Taif on one side of the Landbridge with Abha and Khamis Mushayt on the other side. This line will transport up to 1.2 million passengers and 743,000 tonnes initially and 2.2 million passengers and 1.5 million tonnes by 2025.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications