Saudi Arabia - New Joint Venture to Try to Capture Saudi Railway Development Opportunities23 Aug 2011 • by Natalie Aster
The development of a rail network in Saudi Arabia to cater for passengers and freight is continuing apace. A new partnership has been formed between two companies to bid for further new projects in the sector. BMI notes that government investment in developing a rail network in the GCC countries is providing companies in the region with good opportunities for growth.
The Saudi Railway Company (SAR) is a government body established to manage railway development in Saudi Arabia. There are two main projects currently under way in the kingdom: the north-south railway, which is to run from the mineral-rich towns of Jalamid and Haditha in the north and link to the ports of Dammam and Ras Azoor on the Persian Gulf, in addition to Riyadh, and the Saudi Landbridge, which will connect the Red Sea port of Jeddah with Riyadh and ports on the Gulf. SAR is in the process of prequalifying companies for a number of opportunities in the country.
New Saudi Rail Plans
The New North-South Railway Alongside Saudi Arabia's Existing Railway Network
Source: Al Farhd Construction Company
In order to bid for over SAR3bn (US$800mn) of these opportunities, a UAE-based company, Advance Rail Group (ARG), has announced it has formed a joint venture with Saudi contractor Al-Rashid Trading and Contracting Company (RTCC). Warwick Georgeson, general manager of Advance, said: 'This strategic joint venture will ensure both parties capitalise on each other's strengths. ARG's decision to partner with RTCC was founded on their strong history in the kingdom and their successful completion of several high profile projects in the region.' RTCC has already nearly completed an 817km stretch of the north-south railway.
BMI notes that the investment in the region's railway development is providing opportunities for rail contracting companies in the Arabian Peninsula. ARG came into being in 2010 when Australian rail contracting company joined up with Emirati contractor Al-Habtoor Leighton Group (HLG). HLG CEO, Laurie Voyer, has said: 'We have identified the kingdom as a strategic geographic region for our business and the market there is robust and sustainable with predominately government-funded infrastructure works.' With further projects due in Saudi Arabia, and the UAE and other GCC countries' railway development also picking up, we expect there to be further rich pickings for rail contracting consortia.
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