Saudi rail project gathers steam

04 October 2002

Saudi Railways Organisation has invited international firms to submit expressions of interest by 10 November for the consultancy contract for the planned east-west coast railway. The build-own-operate (BOT) project is one of the government's most significant commitments to foreign and private sector investment in the economy to date (see Tenders, page 39).

The successful bidder will provide financial and technical advisory services for the construction of a 950-kilometre rail link between Riyadh and Jeddah, and a second 115-kilometre link between Dammam and Jubail. Both stretches will connect to the existing railway between Riyadh and the Gulf coast.

The advisory contract also provides for a feasibility study for an extension into the Hijaz, linking the cities of Mecca, Jeddah, Medina and Yanbu. On completion in 2010, the railway will effectively connect the kingdom's two largest ports and its two largest industrial cities, Jubail and Yanbu.

Plans to build a railway between the Eastern Province and the west coast were first floated in the mid-1990s. The project is closely linked with the development of a second industrial railway to transport phosphate and bauxite from mines in the north to Dammam. This second line is part of a $2,000 million mining project being developed by Saudi Arabian Mining Company (Maaden) and Saudi Oger, which are now evaluating bids for the financial advisory mandate submitted by a handful of local and international banks in June (see Industry).

Estimates of the cost of the rail expansion programme vary. A World Bank study conducted in the late 1990s put the total cost of the two railways - excluding the mining development - at about SR 12,150 million ($3,240 million). The director-general of the Saudi Railways Organisation, Khalid al-Yahya, has given a more conservative estimate of SR 10,000 million ($2,667 million).

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