Russian bidders join race for royal projects

Russian bidders join race for royal projects

Saudi Arabia, named as the partner nation for "Innoprom-2025" this year, is keen to develop partnerships with Russia in a range of industries.

Given the circumstances, the Natsproektstroy group of companies is negotiating to participate in rail infrastructure initiatives on the territory of Saudi Arabia. Thanks in part to government support, Russian players are able to compete on equal terms against major global competitors operating in the Kingdom.

The Landbridge Project

Dmitry Bolotsky, Deputy General Director for Commerce at National Project Construction explained that the Natsproektstroy group of companies is currently in talks with Saudi government agencies, including the Ministry of Investment (MISA), and leading private firms specializing in infrastructure development. According to him, the discussions are intended "to create highly effective models for cooperation and project delivery in Saudi Arabia."

Dmitry Bolotsky pointed out that Saudi Arabia’s Vision 2030 National Development Program provides opportunities for the Natsproektstroy group of companies to contribute their expertise and technologies. This is especially relevant for large-scale projects like the Saudi Landbridge and the Trans-Arabian Railway.

Spanning 950 kilometers, the Saudi Landbridge (or "Land Bridge") railway will link Jeddah, located on the Red Sea coast, to Saudi Arabia’s capital city, Riyadh. From there, the new railway will connect to the existing line heading to the Persian Gulf port of Dammam, which is also set to be upgraded as a component of the overall project. With a preliminary budget of $7 billion, the project took a step forward in early April when Saudi Arabia Railways (SAR) announced a tender for the design phase of the Saudi Landbridge.

Trans-Arabian Railway

The Gulf Railway (Trans-Arabian Railway) stretches 2,177 km and aims to connect all six countries of the Gulf Cooperation Council—Saudi Arabia, the UAE, Oman, Bahrain, Kuwait, and Qatar. Discussions about the project have been ongoing for more than 10 years.

In 2017, Russia’s Ministry of Industry and Trade stated that Russian companies, most notably JSCo Russian Railways, were interested in participating in the construction of the Trans-Arabian Railway.

Eldaniz Guseynov, an independent research associate at the Heydar Aliyev Center for Eurasian Studies at Ibn Haldun University (Istanbul), noted that in Saudi Arabia’s railway construction sector, the Natsproektstroy group of companies, as well as any other potential Russian entrants, will face strong competition from leading international companies with a longstanding presence in the region. These major players include the French companies SYSTRA and TSO, as well as the Italian firm Webuild. The new tenders have also attracted strong participation from Chinese and Turkish companies. 

Consortium Model

At the same time, the expert notes a key feature of the Saudi market, namely the consortium model: large projects assemble teams from companies of different countries and specializations, enabling shared technical risks, financial responsibilities, and expertise.

Under these circumstances, Russian participants build their competitiveness by offering comprehensive packages that include technological solutions, financing via the Russian Direct Investment Fund (RDIF), and collaboration with both local and international partners.

According to Eldaniz Guseinov, Russia and the Arab states of the Persian Gulf have ambitious plans to strengthen cooperation, but the primary obstacle remains insufficient infrastructure. Notably, Saudi Arabia has already become a member of the North-South International Transport Corridor (ITC), and the first freight train from Russia’s Chelyabinsk region reached the kingdom via the ITC’s eastern route through Iran’s port of Bandar Abbas as early as the end of 2023.

The partnership between Russia and Saudi Arabia received fresh momentum in October 2019, when—during President Vladimir Putin’s visit to the Kingdom—a comprehensive cooperation agreement was signed involving the Russian Direct Investment Fund (RDIF), Russian Railways (RZD), and Saudi Arabian Railways (SAR). The document provides for the joint expansion of the SAR network and participation in the projects of the Vision 2030 Program, including possible deliveries of Russian security systems and the transfer of infrastructure management technologies.

The analyst notes that, while there is currently no formal documentation for extending the North-South Transport Corridor via Bahrain and Saudi Arabia to ports on the Red Sea or onward to Africa, the ambitious regional infrastructure upgrades have brought this option into practical consideration.

Dmitry Koptev