Saudi Railway Company to build $7bn Saudi Landbridge

09 January 2012

Delayed landbridge rail project will finally move ahead in 2012

The Saudi Railway Company (SAR) says it has now been tasked with developing the long-delayed $7bn Saudi Landbridge railway project.

As a result, the previous tender process, which has been ongoing since 2008, is now void, says a source at SAR. The project is now expected to start moving ahead towards the end of 2012 or early 2013. “Now we will get all the previous studies and start to [examine] the blueprints,” says the source.

The Public Investment Fund (PIF) is part of the kingdom’s Finance Ministry and was assigned to finance the scheme in August 2009 after private banks were reluctant to offer funding. The PIF said in October 2011 that it would take control of the development of the project and has now appointed SAR to construct the railway.

The project has been through a complicated tender process. It was initially planned to be developed on a 50-year build-operate-transfer (BOT) scheme financed through debt. In 2009, the project was retendered again on a BOT basis. Four consortiums submitted bids for the deal in 2009. 

The Saudi Landbridge is a 950-kilometre-long passenger and cargo railway designed to create a link between Jeddah on the Red Sea coast and the ports of Dammam and Jubail on the Gulf coast, through the kingdom’s capital Riyadh. SAR is the client for the construction of the Jubail-Dammam railway and the internal rail network in Jubail itself.

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