A rapidly developing railway network has the potential to transform movement around Saudi Arabia, resulting in less road congestion, an improved travel experience for millions of pilgrims and faster delivery of industrial freight. According to a report by Terrapinn Middle East for the Middle East Rail 2017 event, it is estimated that the Kingdom accounts for $130bn of the $240bn worth of spending planned for rail infrastructure projects across the GCC.
The first passenger services on the North-South railway line began in Spring 2017, and the first quarter of 2018 is expected to see the first high-speed service carry pilgrims on the 444-km Haramain Express connecting Medina, Makkah and Jeddah. A year later, in 2019, the first trains are expected to be running on Riyadh’s $22.5bn, 179-km metro system. While these services will bring new travel options for commuters, business travellers and tourists, it is the heavy-lifting capability that rail offers to Saudi Arabia’s industries that gives it the potential to make a significant contribution to the Saudi Vision 2030 objective of creating a “logistics platform across three continents”.
However, there are significant engineering and financing challenges in laying thousands of kilometres of track across the Arabian Peninsula. The government is hoping to avoid some of the financial obstacles by encouraging a 10-fold increase in private sector involvement in the country’s railways over a period of five years. In the short-term National Transformation Programme (NTP), a key performance indicator for the Ministry of Transport is to ensure that private financing and operation of rail increases from 5% in 2016 to 50% by 2020.
The Network
For more than half a century there was only one rail route in Saudi Arabia, running from the central capital city Riyadh to Dammam in the Eastern Province. The route – which opened in 1951 to serve the operations of energy giant Saudi Aramco – runs freight from King Abdulaziz Port in Dammam to the Riyadh dry dock, but also offers passenger services. Since 2000 four long-distance rail projects have been conceived, in addition to urban metro schemes. The four projects encompass a North-South line running from the border with Jordan to the capital, but with a branch connecting to a new Gulf port at Ras Al Khair; the Haramain Express high-speed rail link connecting Makkah, Medina and Jeddah; a land bridge from Jeddah to Riyadh, connecting to the Dammam line and so creating a coast-to-coast rail corridor; and the GCC Network line, a coastal route also running north to south from Kuwait to the UAE border at Al Batha, where it is due to meet a line to be constructed by Etihad Rail in the second phase of the UAE’s GCC rail network project.
North-South
The country’s first railway line from Riyadh to Dammam is managed by the Saudi Railways Organisation (SRO), but in 2006 another industry body, Saudi Railways Company (SAR), was formed by the Public Investment Fund. SAR was tasked with building and operating a new branch of the rail network to serve the north of the country. In May 2011 SAR began operating its freight service, transporting raw phosphates 1400 km from the Hazm Al Jameed mines in the north to the processing and export sites run by Ma’aden at Ras Al Khair on the Arabian Gulf. In 2014 SAR also began transporting bauxite along the same route to new aluminium smelting facilities. According to SAR, its freight trains consist of three locomotives and 160 cars with a capacity of 100 tonnes. It would take 640 trucks to carry the equivalent load, with a 70% higher fuel bill.
SAR is playing a crucial role in industry infrastructure in the north and east of the country, with many of the products it hauls later exported abroad. According to the Saudi Ports Authority, the port at Ras Al Khair exported just under 2.5m tonnes of solid bulk cargo and over 980,000 tonnes of liquid bulk cargo in 2016. SAR’s freight trains service nine stations: six in cities along the route and three located at industrial centres. In November 2016 SAR took delivery of approximately 1200 tank cars, which were designed to carry corrosives and molten material. Supplied by US manufacturer Greenbrier Transport, more than 600 of the cars transport phosphoric acid and 562 carry molten sulphur. SAR also began transporting general freight in 2017. It expected to carry 125,000 containers in its first year and grow to 1.1m twenty-foot equivalent units by 2030. By this stage, an expanded rail freight network will have been built to connect Ras Al Khair, Jubail and Dammam.
In April 2017 SAR began its first passenger services on the 1242-km line from Riyadh – where its station is adjacent to King Khalid International Airport – to Al Qurrayat on the border with Jordan. Daily services have a capacity of 444 passengers with a journey time of two and a half hours. Services also extended to Hail in 2017. The introduction of a bi-nightly sleeper route from Al Qurrayat to Hail and Al Jouf will come in 2018, with the train then proceeding south to Al Qassim and Riyadh, carrying 377 passengers per trip.
Pilgrim Line
The other inter-city rail service in the Kingdom is the Haramain Express that links Medina, Makkah and Jeddah. The service is expected to have the capacity to carry 165,000 passengers daily when it becomes fully operational in March 2018, helping to relieve traffic congestion and enhance the travel experience of millions of pilgrims each year.
The 444-km line has been built by the Al Shoula consortium, composed of two Saudi companies and 12 firms from Spain. The $7.1bn contract was awarded in 2011. Following disputes between the SRO and the consortium over delays and costs, the Railway Gazette reported in November 2016 that the final completion date was agreed upon when issues were resolved by an independent arbitrator.
Land Bridge
Jeddah is set to benefit from another of the four main projects due to be developed: the Saudi land bridge, a rail line that would link it to Riyadh and the Gulf coast. According to 2016 data from the General Authority for Statistics, Jeddah Islamic Port (JIP) on the Red Sea handled 35.3% of all imports into the Kingdom that year, and serves as the gateway to trade with Europe and North Africa. Thus, more than one-third of the Kingdom’s freight has no other option at present but to use road haulage to reach cities in the interior. In this way, the railway has the potential to play a major role in Saudi Arabia’s economy. The line may also drastically reduce shipping times and costs to certain Gulf destinations. Industry media estimates that rail freight could reach Dammam from JIP in just 18 hours instead of five to seven days by sea.
While the benefits of the project have generated great interest, delivery has been delayed. A Saudi-Australian consortium was offered the project on a build-operate-transfer (BOT) basis in 2008, but there were disagreements over the financial terms. In June 2017 Rumaih Al Rumaih, the head of SRO and president of the Public Transport Authority, told media that the 950-km land bridge between Jeddah and Riyadh would most likely be built on a BOT model, while confirming that a detailed design for the scheme had been completed. Al Rumaih indicated a public-private partnership approach was also favoured for other major projects, such as the planned metro systems in Makkah, Medina and Dammam.
East Coast Line
Saudi Arabia’s component of the 2177-km GCC rail network is set to be shorter than the Jeddah-Riyadh land bridge, at 663 km. The network has the potential to boost industry and trade, as well as tourism, but in early 2017 the completion date was pushed back to 2021. Each of the GCC member states is weighing the benefits of increasing connectivity and commerce against the construction costs at a time of relatively low oil prices and fiscal pressures.
Etihad Rail of the UAE has completed the first stage of its rail network, a 264-km line carrying granulated sulphur from its Shah and Habshan gas fields to the port at Ruwais. However, the second 628-km phase that would link, among other nodes, the port at Jebel Ali with the Saudi border at Al Batha, has been delayed. Yet, there are firm economic incentives for Saudi Arabia to facilitate trade across this border. In 2016 the Kingdom’s exports to other GCC countries were worth more than SR80bn ($21.3bn), SR45bn ($12bn) of which went to the UAE. Conversely, the GCC countries as a whole supplied 7.8% of Saudi Arabia’s imports, with the UAE on its own accounting for 5.4% of the total, making it the Kingdom’s fourth-most significant source of imports.
When Saudi Arabia, the UAE and Oman have each completed their sections of the network, a route to the Indian Ocean at Duqm will give Saudi traders an alternative staging post. The GCC line will also connect the Kingdom to Kuwait to the north, and Bahrain and Qatar to the East. A second causeway between Bahrain and Saudi Arabia would carry the railway in addition to road vehicles. The countries have agreed to a feasibility study on the proposed causeway.
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