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Sun 4 Aug 2013 01:57 PM

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Saudi Arabia to spend $800m on land for Riyadh metro

Official in charge of project says compensation will be paid to acquire land needed for metro

Saudi Arabia to spend $800m on land for Riyadh metro
A view of the newly-opened Holy Sites metro light rail in the western Saudi city of Mecca on November 2, 2010. The Chinese-built monorail project, will link Mecca with the holy sites of Mina, Arafat and Muzdalifah, and will operate for the first time during the Hajj this month at 35 percent capacity to ferry Saudi nationals who will take part in the upcoming annual Muslim pilgrimage. (AFP/Getty Images)

Saudi Arabia plans to spend about SR3bn ($800m) acquiring land
in Riyadh to build the capital's first metro rail system, the official in charge
of the project told Reuters.

"This is already budgeted and we are talking about 3 billion riyals
compensation for the land to be acquired," said Ibrahim Bin Muhammad Al Sultan,
president of the Arriyadh Development Authority, the state body handling the

"The land is already chosen and the teams already started the process three
months ago."

Last week the government awarded $22.5bn in contracts to three
foreign-led consortia for the design and construction of the system. The project
will involve six rail lines extending 176km and carrying
electric, driverless trains.

Design work will start immediately and construction will begin in the first
quarter of 2014, the government said. The project is expected to be completed in

Al Sultan said land would be acquired for the metro in 35 locations but he
did not expect the purchases to disrupt Riyadh's real estate market.

"We are keeping the process of acquiring all land needed for the project to a
minimum, so that it will not affect the huge market of Riyadh," he said.

Saudi officials have said the project is the world's largest public transport
system currently under development.

Asked how the Riyadh metro would be financed, and whether the authority might
issue sukuk (Islamic bonds) to fund it, Al Sultan noted that when King Abdullah
announced the government's budget surplus last year, he allocated 200 billion
riyals of it for public transport systems in general.

This amount is already available at the central bank, Al Sultan said without
elaborating on financing options.

The project will require tens of thousands of workers, private sector
companies have estimated. Assembling this labour force to complete the project
on time may be a challenge, because the country has been tightening controls on
its large population of foreign workers in an effort to reduce unemployment
among Saudi citizens.

Al Sultan said that in the construction phase, Saudi citizens would
participate via management and other positions, but operating the metro would be
more important in terms of creating jobs for Saudis. Up to 90 percent of the
people running the metro will be Saudi nationals, he said.

Before construction starts there will be eight months for government agencies
to coordinate on obtaining the necessary foreign workers, he added.

The project will have priority in obtaining visas for workers, but exceptions
to Saudi Arabia's system of corporate quotas for foreign workers will not be
made, Al Sultan said.

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Shafiqur Rahman 6 years ago

Metro project is good decision by government. Saudi Arabia need
metro service (bullet train service, which is more faster) with all main cities and connecting with all main provinces.
it will save traffic jam in the road, if luxurious service people will move to metro service. Also it will help to create new job for nation and experts.