SAUDI RAIL MERGER ON TRACK TO LURE MORE INVESTMENTS

The merger of Saudi Railways Organization and the Saudi Railways Company (SAR) in February will bolster the kingdom’s transportation infrastructure and play a major role in expanding the country’s railway network.

The companies said that the merger is an important step forward in privatising parts of the transport sector, improve efficiencies and attract more investment.

"It reflects positively on the services provided to the beneficiaries as well as the passengers, institutions and various entities, which reflects positively on the national economy and enhances the capabilities of its local content," said Eng. Saleh Bin Nasser Al-Jasser, minister of transport, and chairman of the board of directors of SAR.

The merger will be “a qualitative leap for SAR”, according to its CEO Dr. Bashar bin Khalid Al-Malik, and gives it the platform to expand the kingdom’s inter-city railways by leveraging the two entities’ expertise.

Saudi Railways Organization was founded in 1951 and built the country’s first rail network connecting Riyadh to the port of Dammam via Haradh, and later to Al Hofuf.

SAR, meanwhile, was originally created in 2006 to build the 2,400-kilometre North-South Railway, linking the port of Jubail and Riyadh with Hail, Jawf, Qurayyat and Wa’ad Al-Shamal.

The merger is in line with Saudi Vision 2030, which has set ambitious goals for the kingdom’s transportation sector, with a strong network connecting the country’s roads, rails, air and sea ports.

The new entity will also play a role in serving the National Industrial Development and Logistics Program (NIDLP), which aims to lay the groundwork for a robust supply chain, and transform the kingdom into a global logistics centre linking three continents.

The programme aims to connect the kingdom’s industrial cities and key business centres via rail and road and create a strong logistic network with regional and global connections.

The kingdom enjoys central location on the trade route between Asia, Africa, and Europe, which constitute 12% of the international trade, according to an NIDLP document.

“Potential advantage in terms of costs reaching 15% as a regional centre for the Arabian Peninsula, the Arab common market, and east Africa,” the document noted.


All told, the government is planning more than 2,000 km of rail lines for freight and passengers, and passenger railway stations across the country. The kingdom already boasts 5,000 km of rail line.

The newly merged entity aims to develop more railway projects, create new jobs and open up the sector for private sector and international investments.

SAR raised its profile in the kingdom after it managed the construction of the Haramain High Speed Rail (HHR), which has transformed the western region.

The 300-km-per-hour electrified line connects Makkah to Madinah, passing through Jeddah, King Abdul Aziz International Airport, and King Abdullah Economic City in Rabigh.

“The HHR project is a crucial component of the development plan and the expansion programme of the Saudi railway network,” according to SAR. “This project links the two main cities at the western region, meets the increasing demand to serve the rising number of internal and external pilgrims with a capacity of 60 million passengers a year, and it alleviates congestion on roads in Makkah, Madinah, and Jeddah. Not least the project is to provide comfort, safe and fast transport services.”

The kingdom is eyeing new railway project and is nearing completion of a study for a major railway line connecting the east to the west of the kingdom, transport minister Saleh Al-Jasser told Al Saudiya TV in April.

The major development will connect Yanbu to King Abdullah Port, followed by Jeddah Port to Riyadh, apart from boosting existing railway lines to the Eastern Region.

RIYAHD METRO

In December, the authorities said construction work on the stations and tracks of the multi-billion dollar Riyadh Metro public transit project is nearing completion.

"Necessary tests are underway, and the project will be received from the contractors," @RiyadhTransport, the company's official Twitter account, said in a social media statement in Arabic in December.

Riyadh Metro will comprise six lines with 85 stations across a 176-kilometre network.

Three separate consortia, led by some of the world’s largest train makers and public transit management companies, are developing the massive, multi-faceted project that will ease traffic congestion and play a major role in transforming mobility in the capital city.

UAE CONNECTION

Saudi Railway also signed an agreement with the UAE’s Etihad Rail, focused on four areas of co-operation, such as locomotives and wagons lease arrangements, spare parts purchase, special volunteer groups and shared services initiatives.

“Leasing of trains and vehicles, and the provision of spare maintenance parts, contributes to further sectorial development opportunities,” SAR CEO Dr Al Malik said. “This partnership enhances the use of our national capabilities and expertise: characteristic of SAR’s wider ethos. Having rigorously implemented international standards, SAR has enabled new partnerships, providing training and services for local and regional transport companies.”