JEDDAH, 6 March 2004 — Tenders for the railway expansion project will be invited soon after a contract with the legal consultant has been signed, Transport Minister Dr. Jabara Al-Seraisry said.
The minister was speaking to reporters after signing a SR461 million contract for the development of the container station at King Abdul Aziz Port in Dammam.
“Documents will be prepared for the private sector to tender their offers for the railway project,” the minister said. The Saudi Railway Organization is negotiating with a legal consultant to reach a deal soon.
The Kingdom has already appointed a consortium consisting of the Union Bank of Switzerland and the National Commercial Bank to provide financial advisory services for the project. The multibillion-dollar project comprises a land bridge linking Jeddah to Dammam via Riyadh and another rail link between the holy cities of Makkah and Madinah via Jeddah.
Several international and national companies have expressed interest in participating in the projects. Due to the complexity of the projects, SRO expects that companies will form consortiums to bid for them.
Official sources have estimated the cost of the railway project between SR8 billion and SR10 billion. According to Khaled Al-Yahya, president of the Saudi Railway Organization, the project would take three years. “Saudi companies will be given priority,” he added.
Seraisry said the railway would be linked with main Saudi ports after completing the East-West Line. “The railway projects to be privatized are still under study,” he said, adding that private investments in the sector could reach SR4 billion. Seraisry said privatization of seaports was also part of the Kingdom’s strategy, adding that the government had already announced the sectors to be privatized. He said most services at seaports are now carried out by Saudi companies with the help of international firms.
He said a new contract, which was signed on Thursday with a major international company, would increase the annual capacity of the Dammam port from 750,000 to 1.5 million containers. The company, which won the deal, said it would invest SR200 million in addition to the contract value of SR461 million. “We will also employ more than 400 young Saudis at the project,” Okaz Arabic daily quoted a company executive as saying.
