The $23 billion Riyadh Metro will be completed on schedule in 2019 and its budget is ring-fenced, a senior official said on Wednesday, quashing speculation the project could be scaled back or delayed following a slump in Saudi Arabia's oil revenues.
Since late last year, the government has clamped down on spending to curb an annual budget deficit of about $100 billion, slowing or suspending work on some projects. In some instances, contractors and their employees have not been paid.
Yet the 176-kilometre (110 miles) Riyadh Metro is unaffected, said Alwalid Alekrish, Director of Construction Development Projects and Project Director of the Riyadh Metro, Arriyadh Development Authority (ADA).
"A lot of people are asking are we going to cut the project back, take something out," Alekrish told Reuters when asked if the oil price drop had affected the metro.
"Up to now, we're working as we have since the beginning. Our payments are being done in the contractual period. It's business as usual for us."
He predicted all six lines and 85 stations would be operational as planned in 2019. These will be served by electric, driverless trains in what officials describe as the world's largest public transport system currently under development.
"We're very confident that is still the date," Alekrish said in an interview. "That's the contractual target. We have not had any instruction to do any sort of reduction."
In mid-2013, three multibillion dollar construction contracts were awarded to consortiums headed by US construction giant Bechtel Corp, Spain's Fomento de Construcciones y Contratas and Italy's Ansaldo STS respectively. Work began the following year.
The metro is being paid for directly from ring-fenced government funds and as such there is no specific debt or borrowings associated with the project, he said.
ADA is in charge of construction, but will launch a tender in the next few months to operate and manage the metro once completed, Alekrish said, predicting this would likely be awarded in mid-2017.
The metro budget is unchanged, but as a design-and-build project some aspects have yet to be decided such as the interiors of the stations, for example.
"You always develop your design as you go along - we're just starting to talk about materials, finishes and so forth," added Alekrish. "We might think if we're going to cut prices we might change materials, reduce specifications, but up to now that's not the case."
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.