RIYADH, 4 April 2007 — The Kingdom yesterday signed contracts valued at SR7.1 billion to build a north-south railroad project covering a distance of about 1,765 km for the transport of minerals and passengers. Minister of Finance Ibrahim Al-Assaf, who is also the chairman of Public Investment Fund, signed the contracts with a consortium of three international and national companies to build the project in 42 months.
It is deemed crucial to the success of the Kingdom’s ambitious SR13.1 billion downstream oil and gas project, a multibillion fertilizer plant of the same value, and a SR22.5 billion aluminum smelter to be developed in Ras Al-Zour by Saudi Arabian Mining Co. (Maaden).
Mansour Al-Maiman, secretary-general of the Public Investment Fund (PIF), and senior executives of the contracting firms Al-Rashed Co., Mitsui & Co. of Japan, Barclay Mowlem of Australia and Abdullah Al-Suwaikat, chairman of the Al-Suwaikat Group of Companies, along with the group’s Chinese partner attended the signing ceremony.
PIF has set up a holding company, Saudi Company for Railways (Saar), to implement the project. It will be funded on a 65:35 debt-to-equity ratio. Part of the equity will be funded through an initial public offering (IPO) expected later this year. The railroad will transport raw materials — bauxite and phosphate — to Ras Al-Zour. Maaden will be looking in 2007 to finance the phosphate plant, for which a contract was signed between Saudi Basic Industries Corp. and Maaden last month.
The first contract for the Ras Al Zour-Al Zubaira Mines sector was signed with a consortium consisting of the Binladen Group (in alliance with two German firms) and Mohammed Al-Swailem Co. in partnership with a German firm. The contract, valued at SR2.3 billion, involves laying a 576 km railroad in addition to bridges, flyovers and tunnels. The second contract, worth SR1.9 billion, was given to Al-Suwaikat Group of Companies and involves laying 440 km of railroad from Zubaira to Al-Nafoud Desert, besides constructing flyovers, tunnels and bridges.
The third contract, valued at SR2.8 billion, extends it from Al-Nafoud to Al-Haditha, Hazm Al-Jalamid and Al-Basita. It was signed with Barclay Mowlem Co. of Australia in collaboration with Mitsui & Co. of Japan and Al-Rashed Co. of Saudi Arabia. It will cover about 750 km of railroad in addition to the construction of tunnels, flyovers and bridges.
Speaking after the signing ceremony, Al-Assaf said the essential goal beyond executing these projects was to transport the two minerals — phosphate and bauxite — and passengers as well as facilitate the movement of traffic among the eastern, northern and central regions of the Kingdom. He added that the project was expected to transport more than 4 million tons of commodities and two million passengers annually between cities located within the project site.