Spanish Firms Deal with Saudi Arabian Mecca-Medina Rail Contract

Al Shoula consortium comprising 12 Spanish companies including OHL and Indra as well as two Saudi firms had become embroiled in a dispute over payments with the Saudi government.

November 20, 2016 9:41 am

A Spanish consortium which is building a high-speed rail link between Mecca and Medina has reached a preliminary deal with Saudi Arabia to finalise the works after a series of delays and setbacks, Spain’s public works ministry said on Friday.

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The Al Shoula consortium comprising 12 Spanish companies including OHL and Indra as well as two Saudi firms had become embroiled in a dispute over payments with the Saudi government.

The consortium’s contract to construct and maintain the Haramain railway is valued at 6.7 billion euros ($7.11 billion).
[quote font_size=”18″ arrow=”yes”]”This preliminary deal resolves the problems that arose on both sides during the process, clearing the way for the works to be finalised,”[/quote]

the Spanish government said in a statement.

The Saudi government still has to ratify the agreement, a spokesman for the consortium said, but it would extend the construction period until March 2018, 14 months later than originally planned.

Under the agreement the state-owned Saudi Railways Organization is to pay the consortium 150 million euros in compensation for additional costs on the project.