DUBAI, May 7 (Reuters) - Jeddah’s government has held initial talks with banks to help secure funding for a multi-billion dollar public transport network in the city, Saudi Arabia’s commercial capital, say banking sources.
Jeddah Metro Company, a transport company owned by the government, is expected to make a formal invitation in the coming weeks to banks and other companies to register their interest in acting as a financial adviser for the project, which includes a metro, light rail, tram, rail, local bus, marine transportation and a 2 km-long bridge, say the sources.
Jeddah Development & Urban Regeneration Company, which owns Jeddah Metro Company, did not immediately respond to a Reuters request for comment.
In 2013, the Saudi government approved a budget of 45 billion riyals ($12 billion) for the project over seven years. Officials have since said the cost might change because of adjustments to the plan, without giving a new figure.
Saudi Arabia is cancelling or delaying many infrastructure projects as a result of lower oil prices but is proceeding with those it deems of strategic importance.
The government is on a drive to engage the private sector in sectors of the economy including transport, healthcare and industry to ease pressure on state finances.
The sources said the project, which spans more than 800 km (500 miles), would likely be developed under a build-operate-transfer contract, which usually involves private investors financing and building projects and operating them for a period of time, before eventually transferring ownership to the government.
French engineering and consulting firm SYSTRA was previously hired to design the public transportation programme for Jeddah, the kingdom’s second largest city.
According to SYSTRA’s website, the first part of the transport network could begin operations in 2020.
$1 = 3.7502 riyals Editing by Ros Russell