3. 3
1
Presentation
Objective
• Provide an overview of the current progress for both Path 1 and
Path 2 of the Landbridge Development roadmap
• Identify potential challenges or gaps in readiness that may impact
project success
• Highlight the necessary support needed to address these
challenges before the project commences
5. 5
Focus of Development
Project Overview
• Saudi Railway Company is undertaking the Saudi Landbridge project connecting
Jubail to Yanbu.
• The project involves the construction of a railway line of approximately 2,500 km
out of which upgrading of approximately 200 km through 6 links.
• The project is also complimented by the development of 7 Logistics Centers
along the network
Key Project Components
Rail Network
Signalling
&Telecom
Rail Infrastructure
Logistic Centers
Logistics Centers
Freight Passenger
Rolling Stock
Stations Depots
Project Background
Introduction
6. 6
Key Directions and Decisions
As per the direction received from the High Commission of Transports & Logistics “HCTL” on February 4th 2022, extensive collaboration was
done between SAR, PIF & TGA to finalize the best funding approach to the Saudi Landbridge.
Directions
/
Key
Changes
• Feb 4th, 2022, SAR received an official direction from the HCTL, to coordinate with the Public Investment Fund (PIF) to fund the Saudi Landbridge Railway
Network (as 2nd Path for funding).
• April 20th, 2022, HRH direction in the 5th HCTL meeting was “to present the progress of the 2nd path of Landbridge project in PIF exceptional board meeting
to get the required internal approvals and the required directions to proceed forward.”
• June 8th, 2022, A Royal Decree was issued to establish a ministerial committee for the negotiation with the SCLC and China Republic to fund the project
(Path 1).
• Q1 2023, Ministerial Committee negotiation period was extended till 29 June 2023
• May 2023, Anchor+ 3rd Founding Board approved the Financing structure and governance, and postpone the decision on Riyadh north alignment to the 4th
FB. (Directions and resolutions pending to be shared with SAR)
Timeline
HCTL #5
Framework
Agreement
results presented
Path 2
Path 1
PIF BoD
directed to
integrate Path 2
study under
Anchor+
Anchor+ FB
3rd meeting
Path 2 funding
initial outcomes
Anchor + 2nd FB
Meeting
Extraordinary
Landbridge
HCTL
meetings
HCTL #5
Path 2 created
(PIF to fund the
project with a 5%
IRR)
Jan 2022
Negotiation of EPC &
financing structure and
deal terms
Detaile
d
studies
TGA-SCLC
Framework
Agreement
Oct 2018
TGA-SCLC
MoU
HCTL #5
Framework
Agreement
results presented
Ministerial
Committee
Formed
Oct 2018 Dec 2019 2020-2021 Jan 2022 June 2022 Ongoing
Jan – Apr
2022
Apr 2022 Q4 2022 Q2 2023
Introduction
Ongoing
7. 7
Funding source & Financing structure (Path 1)
Funding source dependent on the G2G agreement for the EPC Financing; Project Management and Land acquisition fees to be funded by MoF
* Note: Based on Phase 1 Project Cost Funding %.
15% of EPC
(~SAR 9 Bn*)
85% of EPC
(~SAR 56 Bn*)
✚
Under G2G negotiation
Financing for Project Management
Financing for Construction Contract (Single)
Introduction
Landbridge Delivery SPV
✚ ✚
8. 8
Funding source & Financing structure (Path 2)
Funding source is the mandate of PIF, Land acquisition fee to be funded by MoF
PIF proposal
50% of EPC
(~SAR 32 Bn*)
50% of EPC
(~SAR 32 Bn*)
Financing for Construction Contracts (Multiple)
Financing for Project Management
✚
✚
Introduction
* Based on 2021 estimate updated 2022 (PwC & HDR estimate (+/-))
Landbridge Delivery SPV
✚ ✚
12. Readiness Aspects
Readiness is a crucial aspect of the project, as it determines the level of preparedness and the likelihood of success. In order to assess the project
readiness, several key aspects were considered essential :
Human capital (HC) pertains to the skills,
knowledge, and expertise of the individuals
who are involved or needed in the project.
the PMC has a crucial role in offering expert
guidance and support throughout the project
lifecycle.
This aspect encompasses the project's overall
organization, including:
• establishment of the SPV for project
implementation,
• the governance structure,
• the engagement of external advisors.
readiness involves:
• Defining the project's final alignment and
Right of Way (RoW) requirements.
• Initiating the land acquisition process.
• Finalizing the land acquisition process
Involves securing the necessary funding for the
project
readiness involves:
evaluating the completeness and accuracy of
key documents, such as:
• contracts,
• technical tender documents,
• other pertinent documentation.
Key
Readiness
Aspects
Human
Capital
Project
Documentation
Project Readiness
13. Identified potential challenges or gaps in readiness
Project Readiness
Readiness Aspect Challenges Solutions
Project Structure
• Strategic direction might impact the Project Structure (Path 1 Vs Path 2)
• Governance structure and operating model might vary depending on path
selection
• Develop the Detailed Design for the SPV to
provide flexibility to adapt both paths.
Human Capital
• Project team size is heavily dependent on path selection.
• Human capital availability limitation
• Impact on SAR’s other Business Units (competing for resources)
• Utilization of current SAR Mega projects BU team
• Involvement of external advisors’ resources
• Interim utilization of SAR’s other BU’s services.
Project Management Consultant
(PMC)
• The Award of the PMC Contract
• Mobilization and Onboarding of the PMC staff
• Bids validity was extended for a total 9 months (expiring July), and another
extension is highly expected (which might face resistance from Bidders)
• Secure budget.
• Board of Directors approval to award
• PIF approval to award the PMC
• Overlap between LB Advisors (PwC) and the
PMC.
• Land Acquisition
• The current designs are at Concept or Preliminary maturity level.
• Right of Way requirements, taking info-account utility crossings, are not
confirmed.
• As per regulation, the land Acquisition process can’t start without the final
design
• Collect lands use data from several Gov sources
(MOMRA, MEWA, SPGA)
• Form Landbridge Land Committee by Project
Owner (MoTLS).
• Develop Final Designs by the EPC Contractor
(Path 1), or the Lead Designer and/or Design
Build Contractors (Path 2)
• Project Documentation
• Develop tender packages to bring Path 2 to the same level as Path 1.
• Develop Contracts forms for different packages.
• Appoint the PMC to develop the Technical
Tender Packages and contracts forms for
individual packages according to Path 2
Financial
• Extend the LB current advisory engagement period to continue to support the
ministerial committee, SCLC negotiation and provide the Overlap between LB
Advisors (PwC) and the PMC.
• Secure funds from NIDLP to enter a new
Contract with the current LB Advisors.
• PMC funding is not secured
Deep Dive
16. 16
Development & Operation
Governance for path 2 - as proposed to Anchor+ FB #3
Source : PIF- Anchor+ 3rd FB
Proposed Governance for the Landbridge Landbridge Development SPVs
Landbridge Infrastructure SPV
• Dedicated for rail infrastructure
Capex (new and upgrades)
• Collects track access charges from
the Landbridge Operations SPV
Landbridge Operations SPV
• Collects revenue and subsidies
for Landbridge rail operations
• Pays an operational lease for
rolling stock
• Ring-fences cash flows from
SAR's financial statements
Governance
17. 17
Alignment with Anchor +
SAR is in principle aligned with the decisions taken by Anchor FB in its 3rd meeting
SAR has 4 key remarks on Anchor FB#3 decisions that have implications on SAR:
Landbridge Infrastructure SPV responsible only for funding, but
not for development – this will instead be responsibility of SAR
Landbridge Operations SPV to operate Landbridge rolling stock
and to pay access charges to infrastructure SPV
Rolling stock leasing company (”ROSCO”) will be established and
fully owned by PIF, not by SAR
Logistics Centers removed from SAR scope – all dry ports (incl.
Riyadh Dry Port) transferred from SAR to Anchor NewCo
Anchor NewCo to provide 3PL services (incl. services adjacent
to dry ports)
2
1
4
3
Decisions taken in Anchor FB#3
SAR to continue with planned establishment of the Landbridge
Development SPV, which should be 100% owned by SAR
Risks of integration and duplication of capabilities between Landbridge
Ops SPV and the existing FreightCo and PaxCo in SAR
SAR should be involved in RosCo design & governance (e.g. Board
/ExCom seat), especially if RosCo will take over SAR’s existing ROS
SAR financial viability will be impacted, as it can no longer operate dry
ports and provide rail-adjacent logistics services
SAR should be involved in Anchor NewCo governance (e.g. ExCom
seat) to ensure logistics centers direction aligns with its needs
Implication on SAR and recommendations
SAR will further study these implications in its “2030 Strategy Refresh”” (prior to 2023) and propose any mitigation measures
Governance
18. 18
Development SPV
Project start
Feb-20
~3-4 months
SPV ready for establishment
~3-4 months
Preliminary Design
• Design principles, mandate and
functions
• Governance & DoA
• Org Chart, HC and Operating
Budget
• Risks and mitigations
Detailed Design & Establishment
Legal support with SPV incorporation
Drafting of Articles of Association
Legal options for incorporation
Approved by SAR BoD
4 weeks ~8-10 years
2
1
SPV in Operation
Financials
Strategic advisor Legal advisor
Completed Financial Advisor
Governance
In line with Anchor + FB decisions, SAR BoD has approved the following (BoD: 5/4/2023/6 on 21 May 2023):
• Establishing a limited liability subsidiary “Special Purpose Vehicle” owned by Saudi Railway “SAR” under the name of “Land Bridge Development
Company”
• Allocate a budget of SAR 20 million for the establishment of the SPV and start the detailed design process for it
• Approve the governance proposal of the Board of Directors for the SPV as presented to the Board.
19. 5
Next
Steps
• Secure Budget to award the PMC Contract
• Allocate the 20 million to proceed with the SPV
Detailed Design & Establishment
• Secure approval and budget for the LB Advisors’
engagement (Ministerial Committee and negotiation
support) – NIDLP-
20. 6
Key Asks
• Approach PIF to proceed with the PMC award ENDORSE
• Allocate the Budget to award the PMC
Contract by MoF or PIF
GUIDANCE
• MoTLS to formulate Landbridge Land
Committee
APPROVAL
• Support in expediting NIDLP approval to fund
the LB Advisors’ initiative (to support the
ministerial committee and SCLC negotiation)
SUPPORT
Key Asks of HE
the Chairman
26. 26
Initial Funding Requirements
Path 1 Path 2
65.6 bn *(as of 2021) CAPEX 61.2 bn **(as of 2022)
4% of Direct EPC (~1.959 bn)
Professional Fees
(e.g. PMC, CSC) 7% of Direct CAPEX (~3.429 bn)
8 bn*** Land Acquisition 8 bn***
1.6 bn SPV 1.6 bn
77.1 bn Total 74.2 bn
Project Implementation Strategy
* Under negotiation with the SCLC, ** Based on 2021 estimate updated 2022 (PwC & HDR estimate (+/-)); *** SCLC/TGA estimate
27. 27
Project Implementation Approach (Path 1)
Project Management Consultant (PMC)
EoY-2 of EPC
June 2022
Royal Decree to form
Ministerial Committee for
Negotiation
Start of Construction
Construction
Mar 2022
PMC Floated
to the Market
EoY-1 of EPC
Fixed RoW (Design)
• One Turnkey FIDIC Silver book type
(Engineering, Procurement, Construction
(EPC)) contract.
• One Contract for the Project Management
Consultancy (PMC)
• One Contract for Construction supervision
Consultancy (CSC)
The project is delivered by one EPC Contractor.
Phasing Approach Contracting Strategy
The EPC Contract was developed assuming 7
Construction Work Packages for proper construction
monitoring and management
Packaging Approach
Project Implementation Strategy
Design RoW & Land Acquisition
EPC Negotiation Stage
Financing Negotiation Stage
The execution approach concerning the participation of the Saudi-Chinese Landbridge Consortium (SCLC) adheres to the Framework Agreement established
between TGA and the SCLC.
Construction Supervision Consultant (CSC)
7 + 2 Years
Full Operation
T O D A Y
PMC Award
PMC Tendering
28. T O D A Y
28
Project Implementation Approach (Path 2)
SAR is dedicated to carrying out the Landbridge project and has conducted numerous in-depth studies with the assistance of external advisors, leading to
various actions being taken and strategies being developed
Riyadh Bypass
Feb 2022
HCTL direction
“PIF to fund
SLP”
Implementation Strategy
Concept Design Preliminary Design*
The project is to enter operation into different
phases,
Phase 1: Upgrade links
Phase 2: Jeddah – Yanbu
Phase 3: Riyadh – Riyadh
Phase 4 : Riyadh - Jeddah
12 Civil and Track Packages
1 Signaling & Telecommunication Package
3 Stations & 1 Depot Package
• Several Design-Build FIDIC Yellow book
type (DB) contracts.
• One Contract for the Project
Management Consultancy (PMC)
• One Contract for Construction
supervision Consultancy (CSC)
Mar 2022
PMC Floated
to the Market
* On hold: as the main assumption of Riyadh bypass, 2nd RR is Sheikh Jaber is under RCRC assessment
BU established
Project Implementation Strategy
Project Management Consultant (PMC)
Phasing Approach Contracting Strategy
Packaging Approach
Design Build Contractors
Construction Supervision Consultant (CSC)
PMC Award
7 + 2 years
Full Operation
PMC Tendering
EoY-1 (2024)
First Package to be floated
Construction
Design RoW & Land Acquisition
EoY-2
Start of Construction
29. 29
Works Packages Readiness (Path 2)
Railway Infrastructure Scope of Work Key Challenges CD PD DD
L1.
Jubail InternalNetwork
CTW130 Upgrade
Doubling of CTW120/130 junction (0.6 km)
Doubling of CTW130 central section (7.9 km)
1 new passing loop on JCP branch (1.6 km)
• Work in an urban area
• Work around the operational track
100% 80% 0%
L2.
Dammam-Jubail
CTW120 Upgrade
Doubling of DammamJunction (9.2 km)
Modification of 6 passing loops from 4 km to
4.5 km
Doubling fromJubail LC to CTW130
junction (10.9 km)
• Works adjacent to the existing live operational rail line.
• Integration of systems.
100% 70% 0%
L3.
Riyadh – Dammam
(SRO Upgrade)
6 new passing loops (63 km)
Doubling at Hofuf and Hofuf bypass towards
Riyadh (24.2 km)
Grade separation of level crossings,
upgrade to ERTMS level 2 and Track
upgrade for increased axle load.
• Works adjacent to the existing live operational rail line.
• Integration of systems
100% 65% 0%
L4A.
North Riyadh
CTW400 Upgrade
Doubling of existing line (50 km) • Works adjacent to the existing live operational rail line.
• Integration of systems
80% 20% 0%
Project Implementation Strategy
30. 30
Works Packages Readiness (Path 2)
Railway Infrastructure Scope of Work Key Challenges CD PD DD
L4B.
Riyadh Bypass
New double-track (35 km)
• Urban setting utility and road diversions attract time & cost risks.
• Alignment with RCRC and other stakeholders.
100% 85% 0%
L5BC.
Jeddah – Riyadh
New double track (920 km)
14 double passing loops (63 km)
• Logistics within remote rural location.
• Greenfield mountainous, hilly terrain with wadi crossings.
100% 90% 85%
L5A.
Jeddah – KAP
New single track (146.1 km)
4 passing loops (22.3 km) and doubling at the
junctions (36.8 km)
• Variable geotechnical conditions.
• Subsurface utilities/relocations, road diversions and stakeholder
integration within urban areas.
100% 30% 0%
L6.
KAP – Yanbu
New single track (171.7 km)
6 passing loops (31.6 km) and doubling at the
junctions (9.6 km)
• Variable geotechnical conditions.
• Subsurface utilities/relocations, road diversions and stakeholder
integration within urban areas.
100% 30% 0%
Project Implementation Strategy
31. 31
Works Packages Readiness (Path 2)
Railway Infrastructure Scope of Work Key Challenges CD PD DD
S&T S&T for entire Landbridge
• Linkage of Landbridge S&T with existing SAR S&T and Operations Control
Centers.
• Transition from GSM-R technology to FRMCS technology
80% 0% 0%
Jeddah Depot MaintenanceDepot
• Power, water, industrial and sanitary sewerage needs/connections to be
designed for Jeddah Depot.
• Further study required for operation and maintenance requirements,
considering geographical distance between eastern and western lines, to
confirm type of maintenance required, provision of number and sizing of
depots. Eastern lines do not have access to an exclusive depot.
100% 50% 0%
Passenger Stations
- 2 Passenger stations
(Al Duwadimi, Al Muwayh)
- 1 Interchange Stn
(Al Jumum)
• Passenger station sizing and location needs to be re analyzed as part of
the updated Operations Plan based on the revised demand numbers.
• Bahra interchange station will require consultation with HHR
100% 50% 0%
Project Implementation Strategy
32. 32
Deadline for
Clarifications
Request
Letter of Invitation
Issue Bid
Documents
Project Overview
Meeting
Evaluation Stage
Negotiation Stage
Letter of Award of
Contract **
March 15, 2022
March 31, 2022
Today
September 14, 2022
Session with SAR
Leadership
July 14, 2022 March 6, 2023
Contract Sign Off **
May 31, 2023 *
Q 2, 2023
Q 3, 2023
Project Management Consultant (PMC) Tendering Timeline
* Subject to funding path selection (G2G Vs PIF)
* * Subject to PIF approval
Deadline for
Proposal
Submittal
Project Implementation Strategy
33. Project Management Consultant (PMC) Engagement Plan
Project Implementation Strategy
Tendering of
Work Packages
(WP)
Mobilization & Early Setup
PMC Services Roadmap
On-going project
management
services
Phase 1 Phase 2 Phase 3
1 Month 3 Months 6 Months
• Mobilize Fast Start team
• Establish SAR Priorities
• PMC office set up
• Finalize deployment plan and Other plans:
• Communication Management Plan
• Document Management Plan
• EDMS Implementation Plan
• Develop Plans:
• Mobilization Plan
• Project Management Plan
• QHSSE Management Plan
• Design Management Plan
• Management of Change (MoC) Procedure
• Claims Management Plan
• Project Controls Procedure
• Cost Management
• IT and Information Management Plan
• Procurement Plan
• Detailed Cost Plans
• Develop Master Schedule
• Design Review of Preliminary Design
• Value Engineering
• Prepare Tender Documentation
• Manage Schedule
• Project Control
• Stakeholder Engagement and Management
• Monitor and report project progress
34. 34
Project Management Consultant (PMC) Engagement Plan
Project Implementation Strategy
34
20
Days
Pre-Qualification
15
Days
Assess Pre-
Qualification
120
Days
RFP Bidding Period Technical
Workshops, Clarifications,
Addendums
90
Days
Assess RFP
Offers, Due
Diligence
30
Days
Approval
Process
10
Days
Issue Letter
Award
15
Days
Invite for
JOPEX
Procurement Process – Typical Total Duration
300 workdays
Tendering of
Work Packages
(WP)
Mobilization & Early Setup
PMC Services Roadmap
On-going project
management
services
Phase 1 Phase 2 Phase 3
*subject to variation of durations reflecting the characteristics of the specific line packages and contracts*
35. 35
Line Corridor Length
Track
Length
Upgrade
L1
Jubail Internal Network
(CTW130) Upgrade
30 Km 10 km
L2
Jubail – Dammam
(CTW120) Upgrade
106 Km 35 km
L3 Riyadh – Dammam (SRO Upgrade) 449 Km 87 km
L4A CTW400 Upgrade 50 Km 67 km
Greenfield
L4B Riyadh Bypass 35 Km 71 km
L5BC Jeddah – Riyadh 920 Km 1,978 km
L5A Jeddah – KAP 146 Km 205 km
L6 KAP – Yanbu 172 Km 212 km
S&T Signaling and Telecoms - -
S&D 3 Stations & 1 Depot - -
Total Length 2,665 km
Project Overview
Introduction
36. Scope of Work for SPV Detailed Design phase
Organization and Strategic design
Strategic PMO
• Develop stakeholder engagement plan and manage interfaces with key stakeholders (e.g., SAR, PIF)
• Manage and integrate input from other advisors (i.e., Legal, Financial, HR)
• Oversee and support procurement and onboarding for PMC, and support SPV staff hiring/secondment
• Review and provide input into program control baseline & reporting framework, developed by the PMC
• Develop implementation roadmap to SPV operations phase, incl. knowledge transfer
Financial advisory Legal advisory
• Confirm the development perimeter / mandate of
SPV, aligned with PIF
• Review impact of SAR Policies on SPV set-up
• Design detailed Org Structure
• Define and activate Int & Ext governance
• Develop job descriptions
• Conduct job evaluation and determine comp &
benefit levels (by sub-contracted HR advisory, in
alignment with SAR HR)
• Develop hiring/ secondment plan
• Outline key processes, design RACI
• Develop IT and Digital needs roadmap
• Define Shared Services operating model
• Refine, validate 24 mos operating budget
• Develop financial model & scenarios for the SPV,
incl. revenues, CAPEX, OPEX and funding
• Structure and define
requirements of Project
Development Agreements
– Structure and requirements of
project agreement, regulating SPV
and SAR relationship, roles &
responsibilities
– Business requirements for funding
agreement b/w the SPV and PIF
– Structure and requirements for
land mgmt. agreement between
the SPV and MoF
• Framework for Interface
Development Plans with top 10
stakeholders
• Identify risks of SPV
establishment & ops. and build
mitigation plans
• Develop necessary
accounting processes and
procedures
• Develop a chart of
accounts encompassing all
necessary items required
for set-up of SPV
• Support definition of roles
and job descriptions for
accounting and financial
roles
• Develop detailed legal and
regulatory framework for the
SPV, ensuring compliance
with existing legal and
regulatory requirements
• Outline process for obtaining
any required approvals,
permits, or licenses for the
establishment and operation
of the SPV
• Draft articles of association
and other necessary legal
documents for SPV
establishment
Strategic advisor Legal advisor Financial Advisor
Governance
