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September 7th, 2005, 01:32 PM
Alstom, Siemens Bidders for $5 Bln Saudi Rail Project (Update2)
Sept. 4 (Bloomberg) -- Alstom SA, Siemens AG and Mitsubishi Corp. are among companies bidding for a $5 billion Saudi Arabian project to create the first rail link between the Persian Gulf and the Red Sea, a Saudi official said.
The state-run Saudi Railways Organization yesterday got initial offers from eight groups interested in the project that involves building a 1,065-kilometer (665 miles) railroad across the desert-kingdom, the organization's president Khalid Alyahya said in a telephone interview from Dammam today.
``The project will link the three major economic cities in Saudi Arabia for the fist time,'' Alyahya said. The groups of companies that include banks, railway builders and train makers that meet the Saudi's initial criteria will be invited to submit firm bids by the end of the year for the project, he said.
Saudi Arabia, the world's largest-oil exporter, wants to attract foreign investment to develop the country's infrastructure and expand its industrial base to create jobs for its expanding population, set to double to 30 million by 2020.
The kingdom last year hired UBS AG, Europe's biggest bank by assets, and France's state-owned rail operator Societe Nationale des Chemins de Fer, to advise them on the project, known as the Saudi Landbridge.
Build and Operate
The winning group of companies will build and operate the railway, which will carry both passenger and freight traffic, for a period of at least 30 years, according to Alyahya.
The existing Saudi rail network consists of two 500-kilometer (313-mile) lines connecting Riyadh, the capital, with the Persian Gulf seaport of Dammam and the petroleum center at Haradh, according to the state-rail operator's Web site.
At least 850,000 passengers and 850 million tons of freight were carried by the Saudi Railways Organization in 2002, according to the site.
A third railway line is being considered to link the religious centers of Mecca and Medina with the Red Sea port of Jeddah and industrial city of Yanbu, Alyahya said.
The Middle East is the ``fastest growing'' transport market for railway projects in the world, Charles Carlier, Paris-based Alstom Transport's senior vice president for southern Europe, said in a Sept. 21, 2004, interview.
Mitsubishi Corp., Japan's biggest trading company, won a $3.4 billion contract in May to build the first urban commuter metro in the Persian Gulf sheikdom of Dubai.
Gulf Oil Boom
Persian Gulf states including Saudi Arabia, the United Arab Emirates and Kuwait, which account for about one fifth of the world's oil supply, are investing billions of dollars to expand their industrial base in an effort to diversify their economies.
Oil revenue among the six Arab monarchies are expected to increase by 25 percent to $250 billion this year, according to London-based Standard Chartered Plc.
Saudi Arabia, the world's largest oil producer, pumped 9.58 million barrels of crude a day in August, according to Bloomberg estimates. That was almost a third of all production by the Organization of Petroleum Exporting Countries and more than double the output of the next largest supplier in the group, Iran.
Crude oil for October delivery rose $1.44, or 2.2 percent, to $67.57 a barrel on the New York Mercantile Exchange last week. Prices surged to $70.85 on Aug. 30, the highest intraday price since trading began in 1983. The contract declined $1.90, or 2.7 percent, on Friday.
To contact the reporter on this story:
Andy Critchlow in Dubai on at acritchlow1@bloomberg.net
Last Updated: September 4, 2005 08:43 EDT
Sept. 4 (Bloomberg) -- Alstom SA, Siemens AG and Mitsubishi Corp. are among companies bidding for a $5 billion Saudi Arabian project to create the first rail link between the Persian Gulf and the Red Sea, a Saudi official said.
The state-run Saudi Railways Organization yesterday got initial offers from eight groups interested in the project that involves building a 1,065-kilometer (665 miles) railroad across the desert-kingdom, the organization's president Khalid Alyahya said in a telephone interview from Dammam today.
``The project will link the three major economic cities in Saudi Arabia for the fist time,'' Alyahya said. The groups of companies that include banks, railway builders and train makers that meet the Saudi's initial criteria will be invited to submit firm bids by the end of the year for the project, he said.
Saudi Arabia, the world's largest-oil exporter, wants to attract foreign investment to develop the country's infrastructure and expand its industrial base to create jobs for its expanding population, set to double to 30 million by 2020.
The kingdom last year hired UBS AG, Europe's biggest bank by assets, and France's state-owned rail operator Societe Nationale des Chemins de Fer, to advise them on the project, known as the Saudi Landbridge.
Build and Operate
The winning group of companies will build and operate the railway, which will carry both passenger and freight traffic, for a period of at least 30 years, according to Alyahya.
The existing Saudi rail network consists of two 500-kilometer (313-mile) lines connecting Riyadh, the capital, with the Persian Gulf seaport of Dammam and the petroleum center at Haradh, according to the state-rail operator's Web site.
At least 850,000 passengers and 850 million tons of freight were carried by the Saudi Railways Organization in 2002, according to the site.
A third railway line is being considered to link the religious centers of Mecca and Medina with the Red Sea port of Jeddah and industrial city of Yanbu, Alyahya said.
The Middle East is the ``fastest growing'' transport market for railway projects in the world, Charles Carlier, Paris-based Alstom Transport's senior vice president for southern Europe, said in a Sept. 21, 2004, interview.
Mitsubishi Corp., Japan's biggest trading company, won a $3.4 billion contract in May to build the first urban commuter metro in the Persian Gulf sheikdom of Dubai.
Gulf Oil Boom
Persian Gulf states including Saudi Arabia, the United Arab Emirates and Kuwait, which account for about one fifth of the world's oil supply, are investing billions of dollars to expand their industrial base in an effort to diversify their economies.
Oil revenue among the six Arab monarchies are expected to increase by 25 percent to $250 billion this year, according to London-based Standard Chartered Plc.
Saudi Arabia, the world's largest oil producer, pumped 9.58 million barrels of crude a day in August, according to Bloomberg estimates. That was almost a third of all production by the Organization of Petroleum Exporting Countries and more than double the output of the next largest supplier in the group, Iran.
Crude oil for October delivery rose $1.44, or 2.2 percent, to $67.57 a barrel on the New York Mercantile Exchange last week. Prices surged to $70.85 on Aug. 30, the highest intraday price since trading began in 1983. The contract declined $1.90, or 2.7 percent, on Friday.
To contact the reporter on this story:
Andy Critchlow in Dubai on at acritchlow1@bloomberg.net
Last Updated: September 4, 2005 08:43 EDT