Bid for $17bn Makkah Metro may be awarded in 2018

The metro forms part of the $17bn (SR62bn) Makkah Public Transport Program (MPTP), which is projected to include six lines and 88 stations covering 182km (113m).

Irshad Salim — Buoyed by encouraging responses toward public-private partnerships — key driver of Saudi Vision 2030 for non-oil economy and tourism, the bid for Phase 2 of Makkah’s first rail system may be awarded by next year.

According to Benjamin Highfield, executive vice president of HKA, the construction claims group of Hill International, government officials are currently in talks to secure funding for the project after earlier reports said it may have been shelved due to budgetary strains.

“[Saudi Arabia] has moved a long way to procuring this job [by actively seeking] a contractor or consortium and is currently looking at financing methods,” he told Construction Week.

No appointments have been made however, as right now the Saudi government is looking at ways of “financing these projects outside of the traditional process”.

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Financing could also be raised through the privatization of Saudi Aramco, the first trillion dollar privatization, added Highfield.

“Saudi is the engine of the GCC because of its high population and GDP,” he said. “By just those two statistics, it is always going to be the focal point of socioeconomic performance of GCC.

‘Saudi is also an interesting case. If you go back a couple of months ago, it was going through a process of shelving projects including the Makkah metro and Jeddah metro.

“But that appetite seemed to have changed dramatically as we are now finding Saudi engaging in dialogue to bring those jobs to life, particularly the Makkah metro,” he added.

The Kingdom’s Vision 2030 and the National Transformation Plan (NTP 2020) launched last year aim to create enabling environment for non-oil economy with public-private partnerships and localization as major attributes.

These features are said to be drawing attention of worldwide players — including transportation, from countries such as Turkey, Korea, India, China, Malaysia — to name a few.

Highfield worked on Phase 1 of the project under Hill International in coordination with China Railway Construction Corporation in 2011 – 2012, where 17km of the project was constructed using a traditional procurement method. It’s operation & maintenance may be laid out in public-partnership eventually according to sources.

MMRTC contracted Prasarana Malaysia to provide consultancy services during Phase 1, which covers the construction of two metro lines totaling 45km and 22 stations by 2019.

The metro forms part of the $17bn (SR62bn) Makkah Public Transport Program (MPTP), which is projected to include six lines and 88 stations covering 182km.

“I think [the Mecca metro] will go ahead because that particular project is of huge political significance,” he said.

In May, it was reported that the Government of Jeddah was also looking to secure funding for a multi-billion dollar public transport network.

Sources at the time said that the project will include a metro, light rail, tram, rail, local bus, marine transportation and a 2 km-long bridge, spanning more than 800km (500 miles).

Tendering (bidding) for the first phase of the Jeddah metro project was due to start in 2015, but was delayed due to tightening budgets in the kingdom as a result of low oil prices. It is now being considered for public-private partnership. Meanwhile, the $22.5bn Riyadh Metro project is on track with launch next year.

According to the Middle East Economic Digest (MEED), Saudi Arabia remains the market with the greatest potential for the region’s construction industry, with more than US$250 billion worth of projects in the pipeline.

The kingdom has almost as much work in the pre-execution phase as the GCC’s second and third-biggest markets combined: the UAE has $184bn of work in the pipeline while Qatar has $69bn.

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