Doing Business in Saudi Arabia - International Franchise Association

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