Saudi rail sector keeps status quo for now

23 June 2016

Meeting on 23 June could shed light on recent changes

The ministers meeting taking place in Saudi Arabia on 23 June could provide clearer direction in terms of the impact of the recent leadership change in the kingdom’s rail sector.

The recent appointment of Transport Minister Suleiman al-Hamdan, who was formerly head of the kingdom’s aviation regulator, to head the Saudi Railway Company (SAR) was widely seen as a prologue towards unifying the kingdom’s rail and other forms of public transport infrastructure.

Industry sources speaking to MEED have said the appointment could precede the merging of SAR and Saudi Railways Organisation (SRO), the second agency that oversees some of the largest mainline rail projects in the kingdom.

Speaking to MEED shortly after the announcement, consultants said they were anxious about the impact the recent changes might have in terms of the unawarded mainline and urban rail projects such as the Jeddah and Mecca metro schemes.

A spokesperson for one of the urban rail agencies told MEED on 21 June that “we have no instructions to make any changes yet.”

A consultant working on one of the largest mainline rail schemes said they have been informed about the changes and declined to make any further comment.

The kingdom has close to $90bn worth of rail projects that are either in the early planning stages or have advanced to the prequalification and bidding stage. These exclude projects under construction such as the $23bn Riyadh Metro, the Haramain High-Speed Rail (HHR) and segments of the Mineral Railway.

SRO is the project owner of the 450-kilometre HHR project between Mecca and Medina and the 2,400km North-South Railway between Al-Jouf and Riyadh.

SAR is the project firm established to oversee the new mineral railway and its expansion into Jubail and Dammam.

Four Mecca Metro contracts set for award in the first quarter of 2016 are still awaiting final sign-off from Saudi Arabia’s Royal Court.

The contracts include two civil works packages for lines B and C, as well as the systems and rolling stock deals. In July 2015, a consortium of Spain’s Isolux Corsan, the local Haif Contracting, and Turkey’s Kolin announced it had been selected as the preferred bidder for the first civil works package. According to a statement on Isolux Corsan’s website at the time, the consortium has put forward a proposal for lines B and C valued at SR9.95bn ($2.6bn).

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