Saudi Arabia awards $22.5bn Riyadh metro contracts (Video – Photo Gallery)

Saudi Arabia awards $22.5bn Riyadh metro contracts :Saudi Arabia has awarded three foreign-led consortiums contracts worth $22.5bn to build a metro system in Riyadh, said to be the world’s largest.

The vast contract award comes as part of the oil-rich kingdom’s infrastructure drive as the government seeks to blunt rising domestic dissent after the tumult of the Arab spring.

King Abdullah unveiled a $130bn stimulus package in 2011 to raise living standards.

The metro project includes six rail lines totalling 176km and operating driverless electric trains. When operational in 2019, it will aim to reduce traffic congestion and boost productivity in the capital of the Arab world’s largest economy.

Of the city’s 7.4m commuters, only 2 per cent use public transport. Riyadh’s 5.7m population is expected to rise to 8.3m by 2030.

US construction group Bechtel won a $9.45bn contract for two lines; Spain’s Fomento de Construcciones y Contratas won a $7.82bn order for three lines; and Italy’s Salini Impregilo leads another group that also includes Ansaldo STS with a $6bn contract .

For FCC, one of Spain’s largest construction groups, the contract award comes as a fillip after a challenging period for the heavily indebted company, with its Austrian FCC Alpine subsidiary filing for bankruptcy earlier this year.

The award of the contract also comes after a Spanish consortium in 2011 won a bid to build the first high-speed rail line between the holy cities of Mecca and Medina.

The deal to construct the so-called “pilgrim train”, beating off competition from a rival French bid, was seen in Spain as a prestigious validation of the country’s years of investment in high-speed rail technology.

FCC, whose shares rose almost 6 per cent on the news, is also working on the construction of the first metro system in Central America in Panama, as well the Saint Gotthard tunnel linking Switzerland and Italy under the Alps, which will be the world’s longest tunnel.

Design work will start immediately ahead of a projected construction start date in the first quarter of next year.

The contract awards come amid a flurry of infrastructure work as Gulf states translate high oil prices into long-term development projects.

In June, Qatar awarded contracts worth $8.2bn for Doha’s first metro system as the country prepares to host the World Cup in 2022.

The gas-rich state is projected to spend more than $100bn on transport, roads, hotels and stadiums over the next nine years.

Saudi Arabia awards $22.5bn Riyadh metro contracts

Source :Financial Times


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