$10 Billion Landbridge Project In Saudi Arabia Attracts Big Bidders

December 3, 2007 7:55 a.m. EST

Riyadh, Saudi Arabia (AHN) - Four major Middle Eastern and foreign consortia have submitted bids to build the 683.5-mile (1,000- kilometer) Saudi Arabia Landbridge Project. The venture involves construction and operation of a railway across the Saudi Arabian desert linking Riyadh with Jeddah and Jubail with Dammam.

The project, estimated to cost $10 billion, has attracted the Kuwaiti logistics company Agility, in a tie-up with KBR Inc. from the U.S., General Electric Company and the Al Rajhi Bank of Saudi Arabia. Another serious bidder is the Saudi Bin Ladin Group which includes Japan's Mitsui and Company, India's Ircon International, Germany's Siemens, Deutsche Bank and Deutsche Bahn.

The third bidder is a group led by Rahji Investment with Mada Company for Industrial and Commercial Investment, Canada's SNC-Lavalin and Saudi Arabia's Samba Financial Group as partners. The fourth is a consortium headed by the Saudi family business Al Muhaidib and Sons, plus South Korea's Samsung Engineering and Construction and French bank BNP Paribas.

The Landbridge project is just one of six large-scale railway project the kingdom is building to develop Saudi Arabia's infrastructure, tourism and industry. More than $365 billion worth of infrastructure projects are in the pipeline in Saudi Arabia.

The four consortia submitted their bids on early November, the Saudi Railway Organization said. SRO expects to award the bid on January 2008 to the consortium that submitted a tender of less than $6 billion, said Mohammad Afzal Khan, advisor to SRO's president.

The winner will get a 50-year concession to operate the railway and is allowed to raise funds using regular and Islamic loans, bond and project financing.

By January, another high-speed railway project linking Makkah and Medina, the holy cities for Muslims, will be bid out. Six international consortia are expected to submit tenders for this second railway project.