Land Bridge Project Brief
Welcome to the Project Brief page of the Land bridge Project. This page contains a description of the proposed Saudi Arabian rail network linking the Red Sea to the Arabian Gulf and addresses a variety of potential questions that interested parties may have about the project.
The Saudi Land bridge will transform the existing rail network in the Kingdom of Saudi Arabia ("KSA") into a world-class freight and passenger rail link across the country. It will have the capability to move large quantities of cargo over long distances at competitive rates and will offer safe and comfortable overland passenger transport.The railway will connect the port cities of Jeddah, Dammam and Jubail and will pass through the capital city Riyadh and serve its dry port.
The project will involve:
- Construction of a c. 950 km new line between Riyadh and Jeddah
- Construction of a c. 115 km new line between Dammam and Jubail
Upgrade of the existing rail link between Riyadh and Dammam, including connection to the new Riyadh-Jeddah and Dammam-Jubail lines. Integration of the new lines with Jeddah Islamic Port, King Abdul Aziz Port, Dammam and Riyadh Dry Port.
The KSA will grant concessions to the private sector for the construction and operation of the Saudi Land bridge via a Build Operate Transfer ("BOT") contract. This will be one of the largest BOT schemes ever undertaken in the region.
A consortium comprising UBS Investment Bank, The National Commercial Bank and SNCF International has been selected by Saudi Railways Organization ("SRO") to provide Financial and Technical Advisory Services for the Saudi Land bridge.
Pre-qualification of consortia for the project, which has the full support of the KSA, is expected to commence in the first half of 2005.
The Land Bridge Project:
This is a 950 Kilometers-long railway line for the cargo and passengers which aims at connecting the red sea with the Arabian Gulf and to serve the movement of shipping containers transport either to the domestic markets or heading to the markets of Gulf Countries. It consists of two lines, the first starts from Jeddah Islamic Port and ended in Riyadh while the second is connecting Al - Jubail Industrial City, one of the most important industrial centers in the Kingdom and Gulf, with the rest of the network.
The Importance of the Project:
The project is considered one of the largest projects to be implemented as BOT Concessions (build, operate, and transfer) basis and will have a significant impact on the routes of transport in the region due to the characteristic strategic and geographical location of the Kingdom. It also represents a unique opportunity for companies that have train techniques, the contractors of civil and mechanical works, and investors to contribute in the execution of the project that will have a great impact on the movement of transport, economic and social development.
The Land bridge Project is among the largest projects to be executed in the region on Build, Operate and Transfer (BOT) basis. 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 number of handled containers is estimated to be in 2015 to be in excess of 700,000 standard containers. That is to say, over 8 million tons of freight cargo will be distributed in the Kingdom and neighboring countries. As regards passenger transport, we expect the (Riyadh-Jeddah-Makkah), and the (Jeddah-Riyadh), and the (Jeddah-Dammam) lines to serve several million passengers every year.
This huge project which represents one of the most important elements in the expansion program adopted by the supreme Economic Council in the kingdom (the project through which the existing SRO assets and the personnel will be transferred to the private sector) aims at:
- Linking the main ports of the Kingdom in Jeddah, Riyadh, Dammam and Jubail with a very developed railways network which participates to the benefits from the advantages of rail transport and to be generalized throughout the Kingdom.
- Providing fast, safe and reliable service to ship the excessive containers destined for both the domestic market, or to the markets of the Gulf States. The volume of what will be transferred on this line estimated to be about 8 million tons of containers.
The Transport Expectations
In 2015, the number of transportable containers on the land bridge expected to reach 700 thousand containers with an increase of more than 100%. This means that the number of daily journeys will be about 16 trips daily.
Works stages 1. The approval for the project track and the method of government support:
On the 29th of Shawal 1427, (November, 2006), the Saudi's council of ministers adopted a land mark resolution by with respect to the land bridge. The council announced that the Government will provide financial support for the project. The government has fixed the volume of financial support as a standard for the competition among the world consortia eligible to win the project where the government will grant its support after the compliance of the requirement adopted and required for the completion of the project and achieving it in an integrated way. The government also approved a 50 year concession duration and the transfer of SRO`s assets to the concessionaire as well as the provision of all land required for operation of the Railway at no cost. The resolution further announced the establishment of SARREC, Saudi Arabia Rail Regulatory Commission as an independent commission to supervise the railway transport sector and the transfer of the existing railway network which is currently operated by SRO and the transfer of the staff of the SRO to the successful investor according to the procedures proposed.
2.The Establishment of the Saudi Land bridge Company
The Saudi Arabia council of ministers has passed a decree authorizing the establishment of the Saudi Land bridge Company to assume the construction, development, operation, and maintenance of the railway that will connect the east of the kingdom with the west as well as operating the existing network which connects the centre of the kingdom with the eastern province. The Company's capital will be within SR 5 billion. The decree stipulated that the government's share - represented in the Public investment Fund will be 20%, while the remaining share of 80% will be for the successful consortium of the project. It is expected to practice its functions after identifying the successful consortium to implement the project soon.
3.Approval for the qualification of four consortia for implementation of the project
The Supreme Economic Council agreed for the qualification of four Saudi investment international consortia to bid for the land bridge project. These consortia are:
- Agility Logistics Consortium
- MADA consortium
- Bin laden Saudi consortium Tarabot consortium
These four consortia include a large number of contractors and specialized companies in the industry and operating the activities of railways as well as top of Saudi investor seniors.
At the end of the last year, nine investment consortiums submitted their bidding documents for the qualification to implement the project but four consortiums were only selected.
4.Approval for inviting bids
The resolution of the privatization committee in the Supreme Economic Council was issued recently regarding the bidding documents for the land bridge project. This step was followed by the handing over of the bid documents to the four qualified consortia on Saturday 11/4/1428 AH corresponding 28/4/2007.These four consortia were given a period of six months to prepare the technical and financial bids for the implementation and operation of the project on Build, Operate and Transfer (BOT) basis for a period of 50 years.
This move is one of the most important steps in the preparation procedures for the execution of the project, where the SRO and the project advisors in different specialties -financial, technical and legal- made great efforts to reach a final formulation covering all legal, financial and technical aspects adequate with the way in which the project will be implemented (BOT). It also included all of the terms and conditions that must be adhered by all parties.
5.Completion of the financial bids study of the competing consortia.
SRO recently completed the study of the final financial bids for the qualified competing consortia on the implementation of the project; the Advisory Team has scrutinized these bids on two phases. The first phase was for determination of responsiveness to bidding documents and conditions required while the second one was for analyzing the bids in accordance with a clear and transparent standard to ensure the compatibility of the bid with the conditions contained in the bidding documents and the absence of requests for variations or requirements which are inconsistent with these conditions. Accordingly, it was recommended to choose the preferred bidder and reserve bidder then the announcement of the successful bidder, who will execute the project and to operate the existing network after the transferring property, equipment, and the staff of the SRO, will be named.