Think Railways

Saudi Arabia presents $141bn market for rail, metro and bus projects

June 08
12:02 2015

‘Invest in Saudi’ delegation at UITP World Congress & Exhibition in Milan presented rail, metro and bus projects worth $141bn (SAR 527bn). The projects which are open to public-private partnerships, form part of the country’s national transportation expansion program that covers five metro and bus projects, and thousands of kilometers of rail network.

Authorities revealed a 10 year expansion program that will see US$ 90bn spent on infrastructure, rolling stock and buses and a US$ 51bn spend on operations. The component market for the metro and rail network is valued at US$ 23bn, while rolling stock and bus manufacturing are estimated to be at US$ 9bn each.

The announcement follows the Saudi Arabian General Investment Authority (SAGIA) renewed efforts to increase foreign investment to the Kingdom by streamlining the ease of doing business and introducing an investment fast-track program with a focus on key sectors such as transportation.  Saudi Arabia is the third fastest growing economy in the G20.

The delegation includes senior executives from the Saudi Arabia’s Public Transport Authority, Arriyadh Development Authority, Madinah Development Authority, Makkah Rail Transit Company and Jeddah Metro Company.

President of the Public Transportation Authority, Abdulaziz Al-Ohaly said, “UTIP Milan has not only allowed us to see some of the new developments in public rail industry, but it has also given us the chance to share the exciting new developments in rail projects in the Kingdom that should provide opportunities for all to take part in.”

Adding to his comments, Mr Al-Ohaly said, “These opportunities have been identified following a royal decree to all government ministries to use government spending initiatives to provide incentives for foreign businesses to localize in Saudi Arabia.”

Faisal Bafarat, Executive Director for Investment Development at SAGIA added, “These incentives are huge - over the next ten years, Saudi Arabia will spend $140 billion on metro and national railway projects alone in Riyadh, Jeddah, Mecca, Medina, and across the Kingdom.”

“Companies that decide to set up shop in Saudi Arabia will not only have access to billions worth of projects domestically, but they will also have access to a larger and continuously developing market containing 300 million people living just within a three hour flight of Riyadh.”

Dr. Al-Ohaly concluded by saying: “We believe in win-win relationships with investors in the Kingdom. This is what you will find our delegates from Saudi Arabia’s mega cities – Makkah, Medina, Riyadh, and Jeddah – have in common. We are committed to ensuring our partners’ success if they choose to join us in this exciting journey.”

Since embarking on an infrastructure program in 2008, the Kingdom established over 12 large-scale public transportation projects in Saudi Arabia and the wider Gulf Cooperation Council (GCC) region. These projects include:

 

  • Haramain railroad (450km), commenced in 2008 and to be completed in 2018 at a cost of US$15bn
  • North-South railroad (2,700km), commenced in 2009 and to be completed in 2017 at a cost of US$6bn
  • Jubail-Dammam line (115km), commenced in 2013 and to be completed in 2017 at a cost of US$0.2bn
  • Saudi Landbridge (950km), commenced in 2015 and to be completed in 2020 at a cost of US$7bn
  • Saudi-Bahrain railway (90km), to commence in 2016 and to be completed in 2019 at a cost of US$5bn
  • Upgrade of  the Riyadh-Dammam line (1,005km) to commence in 2016 and to be completed in 2019 at a cost of US$1bn
  • GCC railway, Saudi portion (550km) to commence in 2016 and to be completed in 2019 at a cost of US$1.5bn
  • A further US$9bn will be spent in various bus projects across the Kingdom between 2015 and 2024

The Saudi delegation will be engaging with international investors at UITP to discuss specific opportunities.  The UITP Exhibition is widely recognized for attracting key political, operational and technical decision-makers who come from around the world to network and place orders. Foreign and domestic investment combined has grown by 16% annually, on average, rising from US$ 50 billion in 2005 to US$ 180 billion in 2014. Saudi Arabia offers foreign investors streamlined and duty free access to a market of 300 million people in the 17 Arab countries in the Greater Arab Trade Agreement. The Madina Public Transportation Program, led by the Madinah Development Authority, that is part of the delegation, has been nominated for a UITP Award in the Public Transport Strategy category. The winners will be announced at the networking dinner on the 10th June.

 

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