Scores in running for piece of the rail pie

RIYADH, 12 November 2002 — American, European, Japanese and South African firms are among 32 international bidders for the financial consultancy of the Kingdom’s 1,600-km railway project, a Saudi Railways Organization (SRO) source said here yesterday.

The bidders included several local banks, the source said. The financial consultants will formulate the projects, worth several billion dollars, and then invite offers from international and local private firms to construct the railways on a build-operate-transfer (BOT) basis.

SRO yesterday invited bids before Dec. 21 from specialized local and international firms to provide legal consultation for the project.

Government studies have shown the project is economically feasible and it will be carried out entirely by the private sector. The main project envisages adding a 950-km rail link between Riyadh and Jeddah. This will complete the rail link between the country’s east and west coasts through the existing 450-km rail link between Riyadh and Dammam.

Initial estimates put the cost of this project alone at more than $2 billion. It is expected to boost cargo volume by 19.5 percent to 30 million tons and transport 23 million passengers a year. Another 570-km rail link is planned between Jeddah and the holy cities of Makkah and Madinah. The line will also extend north to Yanbu, the main industrial city on the Red Sea.

A third 115-km railway is planned to link Dammam with Jubail.

Actual construction is expected to commence within two years and the railways will be ready three years later.

A fourth 600-km rail link between the phosphate mines in the north and Riyadh has been given to state-owned Saudi Arabian Mining Co. and Saudi Oger.

Japan in 2000 turned down a Saudi request to finance the project, arguing it was not economically viable. The decision cost Tokyo an oil-drilling concession which Riyadh refused to renew in February 2000. Saudi Arabia is the only country in the Arabian Peninsula with a railway. It was originally built under the Ottomans to transport pilgrims to Makkah.