8 April 2009

JEDDAH: Finance Minister Ibrahim Al-Assaf yesterday announced plans to establish a new railway system linking the Gulf Cooperation Council (GCC) states of Saudi Arabia, Qatar, Bahrain, Kuwait, Oman and the United Arab Emriates.

"GCC leaders have given preliminary approval for the project. The final decision will depend on its feasibility," Al-Assaf said after signing contracts worth SR2.39 billion to implement the remaining phases of the North-South Railway project.

He said state-owned Public Investment Fund (PIF) had so far signed contracts worth more than SR12 billion for new railway projects including the North-South Railway that connects the mineral-rich Jalamid belt with smelters in Ras Al-Zour near the eastern industrial city of Jubail.

French defense group Thales and construction giant Saudi Binladin Group were awarded an SR1.7 billion ($453 million) contract to build signaling, ticketing, communications and security systems for the 2,400-km long North-South Railway.

China's CSR Corp and the US firm ElectroMotive also won contracts valued at SR342.29 million and SR337.79 respectively. The Chinese firm will supply 668 carriages, including 524 to carry phosphate, while the American company will supply 25 locomotives, each with 4300-horsepower.

Al-Assaf, who is chairman of PIF, signed the agreements with executives of the companies during a ceremony held at the Finance Ministry, the Saudi Press Agency said. "We have gone a long way in building the North-South Railway," he said.

"The launch of the new railway in 2010 will coincide with the completion of industrial facilities in Ras Al-Zour on the Gulf coast," he said. China's Harbor Contracting and Engineering Company is building a port at Ras Al-Zour, at a cost of SR2.2 billion.

Al-Assaf said Saudi Advanced Electronics Company would participate in making some parts for signaling, ticketing, communications and security systems along with the main contractor to help transfer of technology.

"We'll try to link all parts of the project with local railway industries and research and developing the Kingdom's railway industry," SPA quoted the minister as saying.

Mansour Al-Maiman, secretary-general of PIF and chairman of Saudi Railway Company, said the North-South Railway would be ready next year for the transportation of minerals. He said the passenger railway linking Riyadh, Sudair, Qassim and Hail would be floated for tenders within a few days, adding that the work on the project would be completed by 2012.

The Kingdom's railway expansion envisages 3,900 km of new track. In addition to the Landbridge Project linking the Kingdom's east with its west, two other major new rail projects are moving closer. These include a 450-km high-speed Haramain railway to link Jeddah with Makkah and Madinah.

The North-South Railway is given priority due to its importance to industrial development. It is integral to planned phosphate and bauxite mining projects in the north of the country that will link up with processing and smelters on the Gulf coast.

"This is a strategic win for our company," said Olivier Houssin, Thales' executive vice president for commercial and security operations. "It is an area where we want to expand." He said Thales also hopes to take part in the Landbridge rail project.

Houssin said Thales was also battling to win a deal for the one-billion-dollar Saudi security fence, an Interior Ministry project aimed at securing the porous northern border with physical and high-tech barriers and monitoring.