(In an item entitled "UPDATE: Thales Led Group Wins $3.47B Saudi Rail Proj Contract" timed at 0948 GMT the value of the contract for Thales was misstated. The correct version follows.)
RIYADH (Zawya Dow Jones)--A consortium led by French defense electronics company Thales SA (HO.FR) Tuesday won a contract for part of a 13 billion Saudi riyals ($3.47 billion) railway project linking the north and south regions of Saudi Arabia.
Saudi Arabia's Minister of Finance Ibrahim Al Assaf said the contract covers the locomotives, wagons, and signal systems.
"There are still some elements of the project like train stations that haven't been awarded," he said.
The five-year project is expected to worth about EUR340 million for Thales, said Olivier Houssin, executive vice president of commercial and securities operations at Thales.
Saudi Arabia has allocated $400 billion over the next five years for infrastructure and development projects, and has signaled it will use government financing to maintain its plans amid the global economic downturn.
"The ministry of finance stepped in and put together proper conditions for this contract," Houssin told Zawya Dow Jones. "This project is a typical capital investment by the Saudi government."
Officials and executives said the Saudi government provided a portion of the financing by taking an equity stake through the Public Investment Fund.
The new 2400 kilometer railway will link the bauxite and phosphorus mines in the far north with processing and export facilities at Ras Al-Zour, Al Assaf said. Construction is scheduled to coincide with the Saudi mining company Maaden's plans.
The north-south railway will link in with other routes in the kingdom, and will eventually be part of a region-wide network in the oil-rich Gulf, the finance minister said. -By Mohammed Aly Sergie, Dow Jones Newswires, +96655-6221334; Mohammed.Sergie@dowjones.com Copyright (c) 2009 Dow Jones & Co
(END) Dow Jones Newswires
April 07, 2009 06:56 ET (10:56 GMT)
DJ Codes: country:[R/ARA,R/EC,R/EU,R/FR,R/ML,R/SA,R/WEU] subject:[N/ZDJ,N/CAC,N/CNW,N/COR,N/DJPN,N/DJWI,N/EMN,N/EMT,N/FCTV,N/WAER,N/WEI] industry:[I/ARO,I/DFN,I/XDJGI,I/XENX] market:[M/IDU,M/NND] product:[P/RTRS] company:[HO.FR,FR0000121329]
