Largest Railway BOT In The Middle East
JEDDAH: The Kingdom is gearing up to build what appears to be the longest railway in the region, according to statements made available to the press following a closed-door meeting.
On Monday, the Cabinet of Ministers announced of a new firm, the Saudi Arabian Railway, with a capital of SR1 billion.The company will carry out the north-south railway project, designed to carry phosphate and bauxite from the north of the Kingdom to a planned new industrial complex at Ras Al-Zour on the Arab Gulf coast.
The Public Investment Fund will be the financing party.
Economists believe the project will transform the Kingdom's existing network into one of the world's most important strategic shipment links. It will shorten the time of delivery for containers tracked between Dammam and Jeddah to less than 48 hours. Now, it takes up to eight days journey by sea around Ras Al-Mandab from the Red Sea to Arabian Gulf.
The Saudi Railways Organization has not built any new railroads for the past 50-years.
One section of the track will bring Jeddah and Makkah together in a 30 minute commute, and Jeddah to Madina with two and half-hour trip, Khaled Al-Yahya, President of Saudi Railways organization told journalists.
Other sections will link Jeddah to Rabigh and Madina, with 112.5 and 260.2 kilometers of track, respectively, he added.
Another railway track will link the Eastern Province to the Western Province in what officials described as a land-bridge. The land-bridge will connect also Qassim, Hail, and Al-Jouf. The total length of this connecting line is estimated at approximately at 1,408 kilometers and is expected to carry more than 12 million tons of minerals and raw materials annually.
The third phase of the project is to link Jeddah Islamic Port with King Abdul-Aziz Port in Dammam and King Fahd Port in Jubail. That will have a total length of 1,061 kilometers.
Train Stations will be built in Makkah, Madinah, Rabigh and Badr, to serve the coming King Abdullah Economic City.
Another two of the stations in Jeddah will be linked to one at the King Abdul Aziz International Airport and the other at the old air port, with a possibility to link Jeddah and Riyadh together as part of the second phase of the project.
The project, according to officials, is expected to achieve financial returns up to SR500 million by 2010 and SR750 million by 2030 and will be run on one of the largest Build, Operate and Transfer agreements ever undertaken in the Middle East.
The Railway expansion project is a fruit of the Supreme Economic Council deliberations and comes as part of a wider vision to shak up the Kingdom's economy.
The implementation of the project is entrusted to a steering committee that will be overseeing both section between Jeddah and Dammam ports and tracks in the Western province. The Saudi Railways Organization will be the executing government agency for the whole project.
Members of the steering committee will include representatives from the Saudi Railways Organization, Ministry of Transportation, Ministry of Petroleum and Mineral Resources, Ministry of Municipalities and Rural Affairs, Ministry of Finance, Public Investment Fund, General Ports Authority and Customs Authority.
National Commercial Bank and the UBS Investment Bank were appointed as the project's financial advisors, with SNCF International as technical advisors, and Linklaters and the Law Firm of Abdul Aziz H. Fahd as legal advisors, who will operate the project under a concession.
The concessionaires will design, Finance, build and operate the land-bridge for an agreed duration, Yahya said. While the needed land for the project will be provided by the government. Core operational assets of SRO will be transferred to the concession, along with staff on a selective basis.
Cost of the project has not been announced yet, as bids are still being considered, but some experts have tipped it to be at around $4 billion. Actual construction is slated to begin within two years.
Bidders will be given traffic study to review and verify, minimum construction requirements specified in respect of safety, key facilities and installations. Minimum services requirements specified to allow bidders the flexibility to select the most appropriate technologies. But bidders will conduct their own route alignment studies based on the technology selected.
Important Facts
- Kingdom's existing network into one the world's most important strategic shipment links. It will shorten the time of delivery for containers tracked between Dammam and Jeddah to less than 48 hours.
- One section of the track will bring Jeddah and Makkah together in a 30 minute commute, and Jeddah to Madina with two and half-hour trip
- Another railway track will link the Eastern Province to the Western Province in what officials described as a land-bridge. The land-bridge will connect also Qassim, Hail, and Al-Jouf.
- Another two of the stations in Jeddah will be linked to one at the King Abdul Aziz International Airport and the other at the old airport, with a possibility to link Jeddah and Riyadh together as part of the second phase of the project.
- The project, according to officials, is expected to achieve financial returns up to SR500 million by 2010 and SR750 million by 2030 and will be run on one of the largest Build, Operate and Transfer agreements ever undertaken in the Middle East.
By Sabria S. Jawhar
© The Saudi Gazette 2006
