Saudi Arabia seeks bidders for Red Sea-Gulf rail landbridge

Saudi Arabia seeks bidders for Red Sea-Gulf rail landbridge    Saudi Arabia is planning to involve international companies to finance the construction and operation of an ambitious rail landbridge designed to move containers between the Red Sea port of Jeddah and the Arabian Gulf as an alternative to the current maritime route.
   Saudi Railways has invited potential investors for discussions about the Saudi landbridge in London on Jan. 31. Jobara Al-Suraisry, Saudi Arabia’s minister of transport, will chair the meeting.
   The project will rely on private sector participation under a build-operate-transfer concession.
   At present, ships from the United States and Europe have to sail all the way around the Arabian peninsula to reach Gulf ports in Saudi Arabia, the United Arab Emirates and neighboring countries. A freight landbridge rail link from Jeddah to Dammam would shorten transit times to the east coast by eight to 10 days for international container traffic, according to a World Bank study cited by the Saudi Landbridge Project.
   The Saudi landbridge project will comprise:
   * The construction of 950 kilometers (590 miles) of rail track between Jeddah and Riyadh, the inland capital city of Saudi Arabia.
   * The construction of 115 kilometers (71 miles) of rail track between Dammam and Jubail, located north of Dammam.
   * The upgrade of the existing rail link between Riyadh and Dammam.
   The planned landbridge would connect the west coast port of Jeddah (annually handling 2.4 million TEUs), the east coast port of Dammam (0.75 million TEUs) and Riyadh’s dry port (0.25 million TEUs).
   “Container traffic — domestic and in transit to the Gulf and beyond — will form the anchor traffic for the Saudi landbridge,” the Saudi Landbridge Project said. The rail link will also carry passengers.
   It described the landbridge as “the cornerstone of the Railway Expansion Program approved by the Kingdom’s Supreme Economic Council.”
   Ohe only existing railway in the country has been operated by Saudi Railways and links Riyadh and Dammam. The landbridge would quadruple Saudi Arabia’s rail network.
   Saudi Landbridge Project said the project “presents a unique opportunity for investors, contracting companies, shipping lines, port operators, rail operators, and equipment suppliers to participate in a project that will have a significant impact on the dynamics of the shipping industry in the region.”
   UBS Investment Bank, The National Commercial Bank and SNCF International are providing financial and technical advisory services to Saudi Railways for the project. Linklaters, together with the Law office of Abdulaziz H Fahad, is providing the legal advisory services.
   The concessionaire will take over the existing operations of Saudi Railways, including all its personnel. The rail landbridge concession forms part of the country’s planned privatization of its rail sector.
   Bids for the project will be requested from interested parties during the second half of 2005.
   The project organizers have not determined the duration of the proposed concessions, but said most concessions for infrastructure assets have a tenure of 25 to 50 years.
   The Saudi Landbridge Project said it has received informal and unsolicited expressions of interest from a large number of national and international parties.