Siemens was ranked first for the turnkey contract on 14 December after SRO completed the evaluation of both technical and commercial proposals, which make up 70 per cent and 30 per cent respectively of the overall score. Siemens, which offers its own rail signalling system and GSM railway (GSM-R) communication network, scored highest on the technical proposal and offered a price of SR 670 million ($179 million).

A group led by Baud Telecom Company (BTC), a subsidiary of Saudi Binladin Group, with Spain's Eliopand offering GSM-R technology by Canada's Nortel Networksranked second after final bid evaluation. The BTC-led team offered the lowest price at SR 550 million ($147 million) but scored low on the technical proposal. A group led by the local Al-Hijaz Trading & Contractingwith the Australian office of the UK's Westinghouse Rail Systemsand offering Nortel GSM-R technology came in third. Al-Hijaz offered a price of SR 636 million ($170 million) and scored lower on the technical proposal than Siemens. It is understood that the bid from a fourth consortium - led by the local Al-Yamama Group- was rejected on technical grounds.

Industry sources say Siemens is expected to enter clarification talks with SRO immediately, with a contract to be signed by the end of the year. The scope of the contract includes the installation of the rail signalling system and the GSM-R network - the latest wireless communication standard for railway networks - along 1,000 kilometres of the two existing SRO rail lines. The contract will be carried out on both lines in parallel over 27 months or in two phases, the passenger line first.

In addition to upgrading the existing rail network, SRO is pressing ahead with its expansion programme, which calls for the construction of two new railway lines: a 950-kilometre line connecting the existing railway network to Jeddah will complete the railway link between the Red Sea and the Gulf, with a further 115-kilometre connection between Dammam and Jubail; and a 570-kilometre line in the west linking Jeddah, Mecca, Medina and Yanbu.