SAUDI ARABIA: Saudi announces multi-billion dollar public transport project in Riyadh

Record ID: 189223

  • Title: SAUDI ARABIA: Saudi announces multi-billion dollar public transport project in Riyadh
  • Date: 30th July 2013
  • Summary: RIYADH, SAUDI ARABIA (JULY 25, 2013) (REUTERS) VARIOUS OF TRAFFIC ON STREET RIYADH, SAUDI ARABIA (JULY 28, 2013) (REUTERS) LOGO OF RIYADH METRO AND LOGO OF HIGH COMMISSION FOR THE DEVELOPMENT OF RIYADH VARIOUS OF PRINCE OF RIYADH, PRINCE KHALED BIN BANDAR BIN ABDULAZIZ , SHAKING HANDS WITH RIYADH METRO CONTRACTORS AT THE LAUNCH OF RIYADH METRO PROJECT CAMERA OPERATOR PRINCE KHALED BIN BANDAR BIN ABDULAZIZ, AT PODIUM OFFICIALS LISTENING SAUDI OFFICIALS LISTENING TO ANNOUNCEMENT (SOUNDBITE) PRINCE OF RIYADH, PRINCE KHALED BIN BANDAR BIN ABDULAZIZ, SAYING: ''Riyadh's population was projected to grow from 6 million to over 8.5 million in the next 10 years, making the metro vital to ease congestion and pollution in the capital which covers an area of 6000 square kilometres, and the increasing of the number of vehicles which have reached more than 1.5 million vehicles this year.'' OFFICIALS APPLAUDING WIDE OF PRINCE OF RIYADH AND RIYADH METRO CONTRACTORS SEATED TO SIGN METRO CONTRACT VARIOUS OF THE SIGNING OF THE CONTRACT CAMERA OPERATOR VARIOUS OF PRESS CONFERENCE, WITH IBRAHIM AL SULTAN SEATED AT TABLE RIYADH METRO LOGO RIYADH, SAUDI ARABIA (JULY 25, 2013) (REUTERS) TRAFFIC (SOUNDBITE) (Arabic) RESIDENT, KHALED AL-ONAIZI ,SAYING: ''I leave early, around an hour and a half before work starts to go to work on time in such congestion.'' TRAFFIC MINIBUSES AT THE SIDE OF THE ROAD VARIOUS OF MINIBUSES (SOUNDBITE) (Arabic) BUS DRIVER, AYASH AHMED, SAYING: ''The metro project will help ease congestion, but it will impact the bus service. People will take the metro and no longer use the buses.'' MORE OF BUSES
  • Embargoed: 14th August 2013 13:00
  • Keywords:
  • Location: Saudi Arabia
  • Country: Saudi Arabia
  • Topics: General,Politics,Transport
  • Reuters ID: LVABNB7WWHJGFOP7LJZQPGMEWPQN
  • Story Text: The congested streets of the Saudi capital, Riyadh, could soon be easing, as the oil rich state announced plans to update the city's public transport system.
    A $22.5 billion plan to build Riyadh's first metro rail system aims to achieve more than improving the quality of life in the congested Saudi capital - it is part of an ambitious effort to shift the country's economy beyond oil.
    The government awarded contracts for the system to three foreign-led consortia on Sunday (July 28).
    Six rail lines carrying electric, driverless trains and extending 176 kilometres (110 miles) are to be completed in 2019.
    Speaking at the signing ceremony in Riyadh, Saudi prince Khaled Bin Bandar Bin Abdulaziz, said the project will cater for the city's growing population.
    ''Riyadh's population was projected to grow from 6 million to over 8.5 million in the next 10 years, making the metro vital to ease congestion and pollution in the capital which covers an area of 6000 square kilometres, and the increasing of the number of vehicles which have reached more than 1.5 million vehicles this year,'' he said.
    Ibrahim al-Sultan, head of the government body which supervises the project, estimated that each riyal spent on it would generate an indirect economic return of 3 riyals.
    The metro systems may also help Saudi Arabia manage its oil resources more efficiently - only about two percent of Riyadh's six million population currently use public transport, leaving most of the rest dependent on gasoline-guzzling cars.
    Growth in domestic oil consumption, as the country's young population expands, has been outpacing rises in oil production capacity.
    So over the next decade or two, Saudi Arabia could be forced to cut back its oil exports, the metro systems will buy it time before it faces such a crunch.
    The Riyadh metro is projected to carry 1.16 million passengers daily when launched, increasing to nearly 3.6 million within 10 years - a significant fraction of the all trips in the country, which currently has a population of about 28 million.
    Saudi Arabia now uses about 500,000 barrels per day of oil in the form of gasoline, and exports under 8 million bpd.
    While the metros are unlikely to persuade some Saudis to abandon their love for the automobile, others may welcome the chance to escape severe traffic congestion in the big cities.
    ''I leave early, around an hour and a half before work starts to go to work on time in such congestion,'' said Saudi citizen Khaled Al-Onaizi, who battles the city's traffic daily.
    But others aren't so keen on the idea of a metro line being built.
    Some locals, like bus driver Ayash Ahmed, fear it could make his job redundant.
    ''The metro project will help ease congestion, but it will impact the bus service. People will take the metro and no longer use the buses,'' said Ahmed.
    Despite the country's oil wealth, analysts estimate millions of people live near the poverty line, and they will have a financial incentive to use the systems.
    The metros may also have a social impact by making it easier for women to move around, in a country where they are still not allowed to drive.
    The carriages will be divided into three sections: first, family and single class.
    The government has not said how it will fund the Riyadh metro project, although bankers have been speculating about possible issues of sukuk (Islamic bonds) which could help to deepen the country's market in state-backed debt.
    After more than two years of high oil prices, financing is not expected to be a problem; the government's budget surplus in 2012 alone was 386.5 billion riyals ($103 billion).
    But assembling the 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.
    Similar projects are underway in other top Saudi cities. Last August the government approved a $16.5 billion plan to modernise the transport system in Mecca, including construction of a metro, and Jeddah is preparing plans to build a metro that would cost around $9.3 billion.
    The projects are part of an effort to improve social welfare for millions of poorer Saudis in the wake of the 2011 Arab Spring uprisings elsewhere in the region.
    Saudi Arabia escaped serious unrest but it aims to ensure social peace by ramping up spending on hospitals, schools and other infrastructure.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2013. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register