Doing Business in Saudi Arabia - International Franchise Association

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