Abu Dhabi, UAEThursday 13 December 2018

Saudi Arabia turns to public-private partnerships to complete rail projects

The delayed Makkah Metro project has been negotiated and will prob­ably be awarded as a public-private partnership arrangement, and similar projects in Jeddah, Dammam and Madinah may follow suit.

Saudi Arabia is likely to rely on public-private partnerships to build some of its major new metro and train projects, including the Saudi Land Bridge intercity train development, the president of the kingdom’s Public Transport Authority said yesterday.

Rumaih Al Rumaih, who also heads the Saudi Railways Organisation, said that the delayed Makkah Metro project has been negotiated and will prob­ably be awarded as a public-private partnership arrangement.

“The same thing applies for Jeddah, Dammam and Madinah [metro projects],” he said at the Middle East Rail conference in Dubai.

Mr Al Rumaih also said that the Saudi Land Bridge project, which is a 950-kilometre intercity train project linking Jeddah with Riyadh, is also likely to be procured in the same manner.

“We have finished the design … we anticipate also building this project. This will most likely have a private-partnership participation building it and operating it,” he said.

The Makkah Metro project was expected to be awarded last year, but like many of the kingdom’s major proposed infrastructure projects it was placed on hold pending the introduction of the new national project management office, which the US-based construction firm Bechtel was appointed to run last month.

Mr Al Rumaih said construction was continuing as planned with the Riyadh Metro project – a US$22.5 billion undertaking adding six new lines to Saudi Arabia’s capital – currently 48 per cent complete. It is due for handover in two years, he said.

Meanwhile, speaking to reporters on the sidelines of the conference, Mr Al Rumaih said that progress was being made with the wider GCC rail network, which had an initial launch date of 2018 that was subsequently postponed to 2021, and for which the proposed programme is due to be discussed at a meeting of regional ministers next month.

Mr Al Rumaih said that he was happy with the progress made thus far.

“This is a very strategic project, a very challenging project to ensure the full interoperability and compatibility between all national networks,” said Mr Al Rumaih.

“We have just, as a directive from the Supreme Council, established a commission that is in charge of economic and development affairs. The members of this committee are authorised and empowered to make decisions. They are also mandated to oversee the progress of the network of the railway.”

He said that a feasibility study for the overall project is being carried out regarding the network’s regulation and the formation of a centralised body to oversee it.

“We are conducting a feasibility study for that regulator and I think the indication is that we are going towards establishing such a body to ensure the safety and the integration of the whole national networks,” said Mr Al Rumaih.

Laurence Batlle, the chief executive of the French state-owned public transport network operator RATP Dev, said tighter budgets were one of the major influencing factors behind the greater interest in private-sector involvement in ­major transport schemes.

“Traditionally, the development of new transport infrastructure has been the responsibility of governments and public-sector agencies,” said Ms Batlle.

“But the scale of investment needed may now exceed available budgets, especially for fast-growing urban environments, such as those in the [Arabian] Gulf.

“This means that a wide range of projects is emerging for long-term private investors, including build, own and operate models.”