Further progress has been made in plans to build the Gulf region’s rail network, with Saudi Arabia looking to closely align the project with its economic and social priorities.
In mid-March the state agency that oversees the operation of the rail network, the Saudi Railways Organisation (SRO), signed a SR2.84m ($760,000) contract with Dornier Consulting, tasking the German firm to update and refine the blueprint for the national rail development project.
The objective is to focus the program on the needs of the Saudi economy as well as draw up a conceptual framework consistent with the country’s National Transportation Strategy. This aims to reduce the reliance on automotive transport for both passengers and cargo, and integrate the Kingdom’s transport system to boost economic development.
The new network will dwarf Saudi Arabia’s existing rail system, which currently comprises some 1400 km of track. However, challenges remain in implementing the multibillion-dollar strategy on time and on budget, particularly with regard to the broader GCC-wide network project.
The 15-year rail program, one of the world’s largest infrastructure projects with an estimated budget of $97bn to be spent before 2040, foresees up to 15,000 km of track being laid, combining freight with broad-gauge high-speed passenger and urban metro lines.
One element of the first phase is the Landbridge network linking Jeddah on the Red Sea with the city of Dammam on the Gulf, with branch lines to key industrial centers. The line will facilitate the fast transport of goods and raw materials from one side of the country to the other. It will also connect expanding mining, industrial and energy centers with both ports.
Another important part of the rollout is the SAR project, formerly known as the North-South Railway. Once completed, it will add approximately 2750 km of track consisting of two main lines. One will originate in Riyadh and run northwest to the Jordanian border, passing through Qassim, Hail and Al Jouf. The other line will connect the Al Jalamid mine in the north with processing and export facilities in Ras Al Khair on the Arabian Gulf.
An additional key component of the five-year program is Saudi Arabia’s 663-km contribution to the GCC-wide rail system, with the region looking to host a seamless network of rail links crisscrossing its various borders. The ambitious project, which includes a 2177-km network, will link all six Gulf states by rail for the first time.
The rollout of urban rail networks is also expected to gain speed this year, with the Jeddah Metro, Riyadh Metro and the Makkah Mass Rail Transit all set to move forward, offering extensive opportunities for construction and rail service contractors.
The original Saudi Railway Master Plan had set out a less ambitious program of 10,000 km of mainline track to be constructed by 2040. However, the increased scope of its reach and the new timeframe reflect the targets to broaden Saudi Arabia’s economic base, allowing for new industrial hubs and expanded port and logistics centers to be effectively linked into the transport grid.
With an expanded rail network, Saudi Arabia also wants to attract more foreign investors. Khalid Al Suwaiket, president of the SRO, said at a conference in Oman earlier this year that improved links to industrial areas and better access to materials may help to encourage external investors looking to set up manufacturing facilities in the region.
One potential snag is that prices for materials such as steel rails, cement and cabling are set to rise given the projected increase in demand, especially at a time when other Gulf states are also developing their own rail networks. Skilled workers, project managers and engineers are also likely to be in high demand.
In addition, according to experts, some GCC countries may struggle to meet the 2018 deadline for the launch of the regional network. With its deep fiscal reserves, however, Saudi Arabia may be better placed than most to cope with any cost overruns and bring its section of the GCC line on time.
Oxford Business Group