The Saudi Railways Organisation (SRO) has delayed awarding the construction contract for phase two of the $7bn Haramain high-speed railway by three months.

Sources close to the project say that the SRO has said it will not make an award for the construction contract until mid-July as it requires more time to assess the bids. Initially, the SRO had been due to complete assessing all the bids by 14 April.

“They (SRO) have asked for an extension until mid-July because internally they are still trying to sort themselves out before making an announcement,” says a source.

The SRO received two bids for work on phase two of the railway from the local Al-Shoula Group and Al-Rajhi Holding Group with France’s Alstom on 3 July 2010. In September, the Al-Shoula consortium was tentatively declared the preferred bidder, though no further progress on making an award has been made since then.

Phase two involves construction of the track, signalling, telecommunications, electrification and building an operational control centre for the railway. Phase two also covers the procurement and maintenance of the trains and involves building 25 rail bridges, 157 crossing,s including wadi bridges and culverts and 70 crossings for cars and camels in Mecca and Medina.

Once construction work is complete, the successful bidder will operate and maintain the entire railway for 12 years.

In February, the SRO awarded two contracts for the construction of four passenger stations to Saudi Binladin Group and Saudi Oger (MEED 1:2:11). This is package two of phase one.

Package one of phase one, which involves civil works, roadway excavation, the body of the track and building bridges and culverts, is already under way.

The Haramain high-speed railway will be financed by the government’s Public Investment Fund (PIF) rather than from banks in an attempt to speed up development. Once completed, the project will have a 450-kilometre electric rail track that the government hopes will greatly reduce congestion on the roads between Mecca and Medina, especially during the annual hajj period, when Muslims go on pilgrimage to the area.