Saudis sign rail contract for Ma'aden project

04 April 2007 16:07  [Source: ICIS news]

LONDON (ICIS news)--Saudi finance minister Ibrahim Al-Assaf has signed contracts with three consortia on 3 April to build a riyals (SR) 7bn ($1.87bn) railway linking phosphate deposits in the northwest of the kingdom with a massive fertilizer project on the Arabian Gulf, Saudi sources confirmed on Wednesday.

 

The railway is a key element in plans to develop non-oil mineral resources in Saudi Arabia.

 

Saudi Arabian Mining Co (Ma'aden) is building a $3.4bn phosphate fertilizer complex at Ras Al-Zour on the Gulf coast that is scheduled for completion in 2010.

 

It will have a capacity to produce 3m tonnes of DAP.

 

The railway, which will run for 1,765km, is scheduled for completion in 42 months, according to Saudi sources.

 

Ma'aden will pay a user-fee for the railway but is not involved in its financing.

 

The Saudi Public Investment Fund has set up a holding company, Saudi Company for Railways (Saar), to implement the project. It will fund the railway through a 65:35 debt:equity split, with part of the equity raised through an initial public offering.

 

The Saudis have signed three contracts for separate sections of the railway.

 

A 750km sector from the phosphate mine at Al-Jalamid will be built by a consortium comprising Barclay Mowlem Co of Australia, Mitsui & Co of Japan and Al-Rasheed Co of Saudi Arabia.

 

A 440km section will be built by the Saudi Al-Suwaikat Group and the final 576km stretch to Ras Al-Zour was awarded to the Binladen Group in association with two German firms and Mohammed Al-Swailem Co.

 

($1=SAR3.75)

By: Stephen Mitchell
+44 20 8652 3214

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