3
June 2004
MEED Quarterly Report - Saudi Arabia
Saudi Arabia is looking to realise a long-held ambition to connect its
Red Sea and Gulf coasts by rail, with technical and financial advisers
on the scheme already in place. Backed by Dammam-based Saudi Railways
Organisation (SRO), the planned network expansion will almost quadruple
the length of Saudi Arabia's existing railway system, which comprises
just 1,000 kilometres of track. Tentative steps towards implementation
are already under way, after SRO named National Commercial Bank (NCB)
and UBS Warburg as financial advisers on the scheme. French railway operator
Societe Nationale des Chemins de Fer (SNCF) was awarded the technical
advisory services mandate on the expansion of the kingdom's railway network.
Together they will consult on the next steps of the expansion programme
and the establishment of a regulator.
The rail expansion programme is split into three main components, with
the core covering the construction of the east-west railway - the Saudi
landbridge - between the Red Sea city of Jeddah and Dammam, on the Gulf.
The coast-to-coast link will integrate the existing Dammam-Riyadh tracks
with two new sections. The longer of the sections will cover the 950-kilometre
stretch between Jeddah and Riyadh, while a second segment will connect
Dammam with Jubail 115 kilometres north. The railway will transport freight
between the kingdom's two largest ports and its two biggest industrial
cities, Jubail and Yanbu.
The western railway expansion calls for the construction of a 570- kilometre
line linking Jeddah, Makkah, Medina and Yanbu. This will primarily serve
passenger traffic but - with the exception of the Jeddah-Makkah link
- will also provide for some freight transport.
The programme's third and largest element is the north-south link, known
as the minerals railway, costing an estimated $1,200 million- 1,500 million
and running from Al-Jalamid in the far north of the country to Riyadh,
where it will connect to the east-west railway. In total, it will stretch
more than 1,300 kilometres and pass close to the Al-Zabirah bauxite mines
near Hail, north of Riyadh. The railway will transport bauxite and phosphate
ores to the Eastern Province. Saudi Arabian Mining Company (Maaden) shortlisted
three consultants in January for the preparation of detailed technical
designs for the project. The successful bidder will also draw up tender
documents for construction contracts, which will be issued early in 2005.
The government has yet to make a final decision on whether to execute
the latter project on a self-financing basis or take the BOT route. But
the first two components are moving ahead after the government decided
in favour of private participation. The first two phases will be managed
and operated by two international consortia based on 30-50-year concessions
- a model that may yet be adopted for the minerals railway. SRO plans
to invite consortia to prequalify in the second half of the year for
the two railway concessions. SRO has still to appoint a legal adviser,
which will be mandated to make recommendations on changes to the legal
and regulatory environment to allow private sector involvement in the
railways.
These three projects are not the only major rail projects on the drawing
board. RFPs are expected to be issued imminently to international consultants
for the contract to carry out the preliminary engineering design on the
Riyadh light railway scheme. Client Arriyadh Development Authority (ADA)
plans to implement the first stage of the planned light railway by 2013.
The successful bidder for the preliminary engineering design contract
will be chosen within three- five weeks of bid submission. The contract
will be carried out over 12- 18 months.
The design contract will cover two light rail lines running north-south
and east-west over a total distance of about 38 kilometres. The project
will cost an estimated SR 1,500 million ($400 million). ADA says the
so- called 30 per cent study will assist the authority in making a decision
on whether the project will be carried out on a design-build (DB), design-build-operate
(DBO) or a design-build-operate-finance (DBOF) basis. ADA is also in
the process of choosing a consultant for the project to carry out a study
determining the final scope of the light rail network. Seven companies
submitted proposals for the contract last year. A contract award was
expected in March, with the study, which is expected to take 15-18 months,
due to start in April
(c) 2004 by Quest Information Limited. Quest Information Limited and
publishers assume no liability for the consequence of reliance upon any
opinion or statement contained in this database |
