Saudi rail privatisation on track with Landbridge link

PLANS to build a railroad linking the Arabian Gulf to the Red Sea were unveiled at a Saudi Railways Organisation (SRO) investors briefing in London last week. The Landbridge rail project aims to link Saudi Arabia’s three largest ports, from Jeddah Islamic Port in the west through Riyadh’s Dry Port and reaching Dammam’s King Abdul Aziz Port in the east.

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By  Rhys Jones Published  February 13, 2005

PLANS to build a railroad linking the Arabian Gulf to the Red Sea were unveiled at a Saudi Railways Organisation (SRO) investors briefing in London last week. The Landbridge rail project aims to link Saudi Arabia’s three largest ports, from Jeddah Islamic Port in the west through Riyadh’s Dry Port and reaching Dammam’s King Abdul Aziz Port in the east. The project involves the construction of a new 950-kilometre railway line between Riyadh and Jeddah, another 115-kilometer line between Jubail and Dammam, the upgrade of existing lines between Riyadh and Dammam and integrating new lines with Jeddah Islamic Port, King Abdul Aziz Port and Dammam and Riyadh Dry Ports. SRO’s expansion plans kick-starts the long-promised process of privatising the country’s railway network, which is the only one in the GCC. Project financing is expected to comprise investor equity and loans from the Saudi Arabian and international bank markets. “We are convinced ... the time is ripe for bringing to Saudi Arabia the many benefits of an expanded rail network,” said Dr. Jobara Al Suraisry, Minister of Transport and chairman of SRO’s Board of Directors. “The Supreme Economic Council’s decision to implement the Landbridge project through private sector participation and privatise SRO in the process, is in line with the government’s declared policies of allowing greater private participation in sectors which ... have been the exclusive domain of the public sector,” he added. SRO is set to announce the pre-qualification process in the second quarter of this year for the project. Invitations to bid will be issued in the second half of this year and SRO is inviting private sector participation in the infrastructure project on the basis of a Build-Operate-Transfer (BOT) concession. “A [great] amount of preparatory work has gone in to launching the tender for the BOT concession,” said Khalid Alyahya, president, SRO. “We also expect strong participation from financial investors, construction companies ... [and] rail operators. We want to make sure that everybody understands the real potential of the Saudi Landbridge,” he added.

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