P.K. Abdul Ghafour
Arab News
24 May 2005

JEDDAH - Saudi Arabia's landmark railway expansion received a shot in the arm recently when specialized US companies expressed their keen desire to take part in the project linking the country's east and west.

"A number of small and medium American companies have shown their enthusiasm to enter the Kingdom's transport industry through the railway project," said Ali Saad Al-Qarni, Saudi Railway Organization's (SRO) vice president for technical affairs.

The American firms expressed their interest when a Saudi trade mission visited the US earlier this month. "The matter will depend on the seriousness of these firms to enter into coalitions to implement the project," Al-Watan Arabic daily quoted Al-Qarni as saying. SRO will begin receiving applications for pre-qualification from specialized companies on Aug. 15 for the expansion projects. A copy of the Request for Pre-Qualification can be downloaded from the project website www.saudirailexpansion.com. SRO has set May 2006 as the date for the submission of bids.

Al-Qarni said SRO would identify the route of the landbridge project within two months. "We'll also finalize the technical and operational standards shortly," he added. The final designs of the project would be left to the investors.

He said it was difficult to determine the cost of the project which analysts have estimated at SR10 billion.

"Identification of the railway route will play a big role in calculating the cost as it will give an idea of how many bridges and tunnels have to be constructed," he pointed out.

The landbridge project involves construction of 950 km of new tracks between Riyadh and Jeddah and another 115-km line between Dammam and Jubail as well as upgrading the existing rail link between Riyadh and Dammam. SRO intends to build another railway line linking Jeddah with Makkah, Madinah and Yanbu.

The landbridge is the cornerstone of the expansion program. It will be the first rail link between the Red Sea and the Gulf and is expected to have a profound impact on the region's shipping patterns. A considerable savings in shipping time for goods from Europe and North America destined for Gulf markets should be possible with the landbridge.

A consortium consisting of UBS Investment Bank, the National Commercial Bank and SNCF International has been providing financial and technical advisory services for the project. Linklaters, together with the law office of Abdulaziz H Fahad, extends legal advisory services.

"SRO has invited leading North American, European and Japanese companies specialized in operating high speed trains to present their proposals," said Khaled Alyahya, its president, referring to the railway line linking Jeddah, Makkah and Madinah. Many international companies including ones from Germany, France and Italy have expressed interest in the project.

Certain international companies currently monopolize speed train technology. "We don't want to set out certain specific standards in order to give an impression that the Kingdom gives priority to the technology of a particular company. We want to keep the field open for all companies and investors to propose technical and financial solutions for implementing the project," Alyahya said.