SAR is searching private companies to develop the rail sector

rail sector The Transport Minister of Saudi Arabia and Chairman of Saudi Railways Company (SAR), Saleh Bin Nasser Al-Jasser, has launched a SAR 1 billion (USD 266.6 million) economic and industrial opportunities to attract the private sector to the rail sector development.

The announcemend was made during the inauguration of virtual Railway Industrial Opportunities Forum on March 17, 2022, under the auspices of the National Industrial Development and Logistics Program (NDLP), with substantial participation by interested domestic and international industrialists and a selection of experts in the railway sector.

“The launch of the first package of economic and industrial opportunities which its investment would exceed more than one billion riyals provides a unique feature and added value not only to the transport sector, but also to other sectors that support and complement the railway industry,” Al Jasser said.

The forum aims at expanding partnership opportunities between the public and private sectors as well as developing the railway infrastructure as sector’s plans in the coming period to open up the market to new operators, and increase the private sector’s participation in freight operations, train passenger trips and assets.

The objectives of the National Transport and Logistics Strategy is to enable and support the national strategies in the industry and trade sector, leading to tourism, Pilgrimage and Umrah via a package of key projects and programs, including the establishment and operation of a safe and effective railway structure to enhance the rail link amongst the regions of the Kingdom of Saudi Arabia and provision of high-quality reliable services for transport and freight using railway transport. Such steps would contribute to reducing the rates of consumption of energy resources in the transport sector and increasing safety levels.

The Forum comes within a year after the completion of the restructuring of the railway sector in the country under SAR’s Company, and at a phase in which the transport and logistics system has achieved several achievements in different sectors of the system.

The rail sector development covers project to expand the network by more than 8,000 km to achieve local and regional connection, doubling the capacity of transport by trains for passengers and freight, and adopting modern technology and advanced technical solutions to reduce the environmental impact of transport by trains, increase the competitiveness of Saudi products and promoting the efficiency of supply chains.

The country’s rail network with a total length of 5,000 km formed by Train – North Train – HHR has ensured the mobility of more than 33 million passengers, and more than 70 million tonnes of minerals and goods in the past ten years. This removed more than 6 million truck trips which helped in reduction of road accidents and death cases by more than 50% within the past five years.

“The industrial opportunities offered at the forum meant to meet the local need based on studies conducted by SAR, and in consistent with SAR’s strategic goals and a number of the crucial programs of Vision 2030. SAR intends to overcome all challenges in partnership with all government sectors, taking the necessary decisions towards the localization of the railway industry,” the CEO SAR Bashar bin Khalid Al-Malik said.

Al-Malik is encouraging the private sector to invest in such unique opportunities as basic partners in a vital and promising sector, and it has reiterated that “localising the railway industry is no longer an option, but rather a strategic objective that we work on to achieve.”

Since the establishment of SAR, its priorities were to increase the local content and develop the national industrial capabilities by encouraging international manufacturers for partnership and knowledge transfer for a number of our local plants. This contributed to an increase in the local content of SAR by more than 41% of the SAR’s total revenues, with a value of more than SAR 1.5 billion (USD 399.4 million). These policies provided a further growth of factories that explored the railways or its complement industries’ unique opportunities to develop their business in line with the increasing demand locally and regionally.

Recently, SAR has launched EOI for the design, manufacture and deliver new intercity trains expected to enter passenger services in 2025 on Riyadh – Dammam railway line. It is expected that the company will also order new trains for the Riyadh – Hail line on the North – South axis to increase transport capacity and quality.

In March, the company awarded CAF a five-year maintenance contract for the 18 push-pull trains manufactured by CAF.

In 2020, SAR signed a 25-year agreement with Sadara Chemical Company to transport liquid, solid products and containers to King Fahd Industrial Port and to Jubail Commercial Port.




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