Railroad Equipment in Saudi Arabia

A Hot Tip about Non-Automobile Transport Equipment in Saudi Arabia

Posted on: 24 May 2010

Overview

The Middle East is set to witness an unprecedented development of the railroad sector. There are a vast array of planned integrated railroad projects in the offing with Saudi Arabia at the forefront, implementing and having undertaken a number of ambitious projects for the development of this sector. The Saudi Railways Organization (SRO), the authorized government body initiating the expansion and development of these projects; plans on upgrading and significantly expanding the Kingdoms railway network by implementing separate but interconnected new railway projects. Currently, projects to the tune of $30 billion are underway with further plans of expanding the network in the near future. The best known companies from around the world have come forward and are competing head to head to offer world class and technically advanced products and services for the development of this exciting sector in Saudi Arabia. A number of projects have already been awarded to specialized companies and consortiums that have bid through the tender process announced by the Saudi Railways Organization.

 

Railroad transportation, relatively new in the Middle East region will bring about a radical change in the social, cultural and economic set-up prevalent in Saudi Arabia. Furthermore, it will enable SRO to expand and efficiently manage the millions of tons of cargo and container traffic which constitutes 80% of SRO’s revenues. Railway transportation will enable the movement of large volumes and sizes of materials over vast distances cutting costs, providing a reliable and cost-effective alternative to transportation as opposed to traditional ways. Railway projects though demand high capital investments, are known to have relatively low operation costs. Moreover, the vast distances and large volumes of transported materials will prove to be a more cost-effective means of transportation. Moreover, the planned industrial and petrochemical projects will rely heavily on the development of this sector. With the huge geographical expanse of the Kingdom, the development of the railways projects will provide tremendous economic benefits to both the industrial base as well as for public use.

 

The Saudi Railways Organization is vying to build about 3900 KM of railway tracks across the Kingdom. The main projects are the 2400KM North-South network that will connect the Riyadh-Buraydah-Hail-Qurayyat as well as the mines at the Jalamid and Zabirah to Ras Al-Zour at the Arabian Gulf and the 1100KM Saudi Landbridge Project or the East-West line which will link the Persian Gulf and Red sea coasts passing thru the Capital, Riyadh. The Haramain High Speed Rail also known as the Mecca-Medina Railway Link (MMRL), will be one of the most important elements in the expansion programs and will connect the holy cities of Mecca, Jeddah and Medina, a distance of 450KM. This will mainly cater to the massive pilgrims and Umrah traffic, which is a year-round phenomenon, reaching its peak during the annual Hajj season.

 

Best Prospects/Services

Mentioned below are a number of expansion projects which are undertaken by the SRO:

The North-South line:

Starting in the northwestern region of the Kingdom, this line passes through Al-Jouf, Hail and Al-Qassim regions and terminates in Riyadh with extensions to Hazm Al-Jalamid to haul phosphate, and to Al-Zubayrah to haul bauxite, and to Ras Al-Zour on the Gulf where a major port will be constructed to export these and other mineral ores. In lieu of this, the Saudi Railways Company was established in Riyadh to take charge of the management and operation of the North-South line; including setting standards of performance and safety and the transport of mining materials, fuel, cargo and passengers. The North-South line will link with the Prince Abdulaziz bin Musaed Economic City in Hail as well as with the railways in neighboring countries of Syria and Jordan. The 2,400-km North-South Railway will be at the forefront of industrial development and estimated to cost $14 billion. Sponsored by the Public Investment Fund (PIF) of the Ministry of Finance, this rail line is integral to the planned mining projects in the north of the country that will link up with processing and smelters on the Gulf coast. Finance Minister Ibrahim Al-Assaf, chairman of PIF Board of Directors, signed a supervision agreement for the execution of the North-South Railway project with Louis Berger Group Inc. of America, SYSTRA, Canarail and Saudi Consolidated Engineering Co. The contract valued at SR512.87 million ($136.8 million) includes on-site construction supervision, provision of technical support to the manufacture and supply of rolling stock, passenger stations, shipment yards, detailed design of signaling and control systems.

 

The Saudi Land Bridge:

The $7 billion Saudi Landbridge will transform the existing railway network in Saudi Arabia in to a world-class freight and passenger rail link across the country. The 950-km Landbridge will link Jeddah with the existing Dammam-Riyadh railway. It will have a significant impact on freight traffic with containers able to transit from the Gulf to the Red Sea in 24 hours avoiding a sea voyage around the Arabian Peninsula. This will ease the movement of passengers and container traffic intended for the domestic market as well as the other GCC states. This project will encompass upgrading the existing rail link between the cities of Riyadh and Dammam, in addition to the new Riyadh-Jeddah and Dammam-Jubail lines. It will have a major impact on the transport potential, as it will enable freight of cargo imported from East Asian countries markets in general via King Abdul Aziz Port in Dammam, and from Europe and North America via Jeddah Islamic Port, thereby attracting more transit cargo and realizing savings in regional freight economy. The Landbridge project will link Saudi Arabia’s three largest ports namely the Jeddah Islamic port in the West, the Riyadh dry port and the King Abdulaziz port in Dammam. Four consortia, comprising Saudi and foreign companies, have been qualified to present their offers to carry out the Landbridge project: the Saudi Binladen Group, Bouygues, Mada International and Commercial Investment Company, and the Public Warehousing Company (PWC). To speed up the completion and operation of the railway project, the government licensed the establishment of the Saudi Landbridge Company in July 2008. The winning consortium will have 80% stake in the company, with the government holding 20%.

 

The Haramain High Speed Rail Project:

The project of Haramain high speed rail project represents one of the most important elements in the expansion programs. This project, upon completion, will provide a safe and fast service for passengers’ transport, mainly the increasing number of pilgrims visiting Mecca, Medina and Jeddah year round, especially during the annual Hajj season. The 450 KM HHR also known as the Mecca-Medina Rail Link (MMRL) will be a high speed (360 kmph) electrified passenger line, equipped with the latest signaling and communication systems; designed to provide a fast, reliable and a safe mode of transportation. The project is estimated to cost $7 billion. Five passenger stations are planned for the first phase of the project, with two in Mecca and two in Jeddah, one at the King Abdul Aziz International Airport and a station in Madinah. An additional station is expected to be established in the King Abdullah Economic City in Rabigh. It is expected that the annual transport volume of the project will reach more than three million passengers a year. According to statistics, the number of Umrah and Hajj pilgrims may be doubled in the next twenty-five years, to more than three million pilgrims and more than 11 million Umrah performers. Thus the development of the MMRL will prove to be vital in the safe movement of traffic in the cities of Mecca, Medina and Jeddah thereby considerably reducing traffic congestion and overcrowding in those areas. The Kingdom also envisions developing their tourism sector with the launch of these ambitious railway projects. In February 2009, the civil construction works package for HHR was awarded to the Al-Rajhi Alliance with a total value of SAR 6.7 billion. The consortium included the local Al-Rajhi and Mada Group with China Railway Engineering Corporation and Alstom Transport. China Railway Company won a $1.8 billion contract to build a monorail system connecting Mecca to the holy sites of Mina, Arafat and Muzdalifah, providing a mass transit system for the hundreds of thousands of pilgrims visiting every year.

 

Recently, the SRO extended the closing date for bids on an engineering, procurement and construction (EPC) contract for the Haramain high-speed rail project, which was stipulated for January 21, 2010. This has been extended to February 28, 2010. A total of five consortia are expected to submit their bids. The winning bidder will construct the track as well as provide the latest rail infrastructure, including signaling equipment, telecoms, provide trains and maintenance for a period of 12 years after project completion.

 

New Projects As part of further expansion plans, the SRO has ordered feasibility studies for establishing railway projects in the Southern region of the Kingdom. These include:

• the Taif-Khamis Mushayt-Abha Line, covering a distance of 706 km. (438 mi.).

• the Jeddah and Jizan Line, covering a distance of 660 km. (410 mi.), and

• the Yanbu-Jeddah Line, covering a distance 350 km. (217 mi.).

 

The capital city of Riyadh thids year will begin work on a $3 billion light rail transit (LRT) system, composed of two lines — one 25 km. (15 mi.) North-South line, with 23 stations, and a 14 km. (9 mi.) East-West line with 13 stations. The consultancy team working on the project includes Beirut-based Dar al-Handasah, and France’s Egis Rail. Spain’s railway supplier CAF signed a $163 million contract in November 2009 with the SRO to deliver 8 train cars in 3 years for use on the Riyadh Metro. The groups interested in bidding for this project include the Al-Rajhi Group and Hitachi Corporation, the local Saudi Oger and the local group Saudico and Malasia’s Scomi; the Saudi Binladin Group teamed with Germany’s Siemens. Saudi Arabia’s Arriyadh Development Authority (ADA) will invite contractors to bid for the design and build contracts in the first quarter of 2010.

 

A SAR3.75 billion ($1 billion), 11 km. (7 mi.) monorail project, elevated 10 meters above the ground, is planned at the Princess Noura bint Abdulrahman University for Women in Riyadh. Saudi Arabia’s Binladin Group with consortium members including Ansaldo STS and AnsaldoBreda of Italy’s Finmeccanica Group won the contract for SR1.5 billion (US$400 million) to build this monorail line.

 

There are on-going talks on a $25 billion Gulf Cooperation Project (GCC) railway project, linking the six GCC member countries. This 2,117 km. (1,315 mi.) rail network is scheduled to be completed by 2017, facilitating the movement of GCC citizens and expatriates and boosting regional trade between the GCC states. Tenders for an engineering study for the railway are expected to be called in the first quarter of 2010. Initial plans indicate a proposal to lay out two railway lines, one being the 1,970 km (1,224 mi.) stretching from Kuwait to Saudi Arabia linking Bahrain and Qatar; moving on to link the UAE and Oman. The second line would be the 1,984 km. (1,232 mi.) track running from Kuwait to Saudi Arabia and the UAE and ending in Oman. As per a recent report by the Kuwait Financial Center; the GCC countries are planning to invest a total of $109 billion on railway expansion projects in the next ten years to address the growing population needs and to ease traffic congestion.

 

Opportunities

There are tremendous opportunities for U.S. companies specializing in the railroad sector. U.S. companies should pro-actively reach out and participate in the Kingdoms projects; partnering with local Saudi groups intending to bid on these expansion projects.

 

The U.S. Commercial Service in Saudi Arabia can be contacted to assist in finding partners to participate in the railway expansion projects in the Kingdom.

 

 

Read the full market research report

 


Posted: 24 May 2010

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