Railway firms quit bidding for Saudi job

PUBLISHED : Tuesday, 13 July, 2010, 12:00am
UPDATED : Tuesday, 13 July, 2010, 12:00am

Several mainland companies have pulled out of the bidding for multibillion-dollar contracts to build a high-speed railway between Mecca and Medina, two of the holiest cities in Saudi Arabia.

No explanations were given, but industry executives cite the high cost of business in Saudi Arabia and the difficult working conditions.

The 444-kilometre Haramain high-speed rail link between Mecca and Medina is being designed to run trains at 360 kilometres per hour and is projected to begin operating by the end of 2012. The railway is expected to ease travel congestion for millions of pilgrims during the annual Muslim haj pilgrimage.

A state-owned railway firm, China Railway No 17, is no longer bidding for Phase 1, Part 2 of the Haramain project, although it was part of a consortium that pre-qualified to bid for it, according to the website of the Saudi Railways Organisation, which is in charge of the project.

Only two mainland companies, China Railway Erhyuan Engineering Group and China Railway Erju Group Corp, were among the six groups of firms that submitted bids by the deadline of July 10, a Saudi Railways spokesman said. The phase involves the building of four railway stations in Mecca, Medina, Jeddah and King Abdullah Economic City.

For Phase 2 of the Haramain project, a group led by China South Locomotive & Rolling Stock Corp failed to submit a bid by the July 3 deadline, though it was pre-qualified to do so, according to the website.

The consortium consisted mostly of state-owned enterprises, including China Railway Construction Corp, China Railway Signal & Communication Corp and the Beijing Railway Administration.

Both China South Locomotive and China Railway Construction Corp are listed in Shanghai and Hong Kong.

Phase 2 involves the construction of track, signalling, telecommunications and operational control centres, as well as the procurement and maintenance of trains.