Saudi rail market anticipates very positive growth

13 August 2013

Riyadh Metro to be catalyst for other rail schemes being developed in kingdom

With more than $22bn-worth of contracts awarded for the construction of the Riyadh Metro at the end of July, the outlook for Saudi Arabia’s rail market is very positive.

No Saudi rail project to date has been worth as much as the Riyadh Metro contracts. The last spike in rail awards in the kingdom was in 2011, when about $10bn-worth of deals were awarded for the Haramain high-speed track connecting Medina and Mecca. This figure is now overshadowed by Riyadh Metro’s multibillion-dollar contract.

The Riyadh Metro scheme is set to be the catalyst for a number of other metro or light rail projects being developed in Saudi Arabia.

Just days before the official award of the Riyadh contracts, news emerged that the Saudi Transport Ministry had appointed Dutch firm Royal Haskoning DHV and local partner Mshari al-Shathri Engineering to carry out a feasibility study and preliminary design for a public transport system in Dammam. The scheme will incorporate both light rail and bus networks.

Plans for a metro system in Mecca gathered pace in early July, when US firm Parsons Brinckerhoff won the project management consultancy (PMC) award for the Mecca mass rail transit project.

Jeddah’s three-line metro scheme has also gained momentum in recent months. In June, Jeddah Metro Company invited consultants to prequalify for work on the rail line.  

Medina is taking its first steps to develop a metro network. In May, a joint venture between Lebanon’s Khatib & Alami and Turkey’s Istanbul Ulasim won the consultancy services contract for the rail system’s preliminary design works. The market is anticipating the release of further deals on the project.

Significant steps are also being taken with overland rail schemes. In early August, Italy’s Italferr won the €28m ($37.2m) preliminary design contract for the Saudi Landbridge project. This followed the award of the PMC contract to US firm Fluor at the beginning of the year. The award is a major breakthrough for the project, which has been beset with delays due to financing issues.

Following the success of Riyadh Metro’s procurement process, the scene is now set for the kingdom’s market to be inundated with construction contracts for rail and metro schemes in the coming years.

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