Asciano, the ports and rail owner spun-out of Toll Holdings, and its seven Saudi Arabian partners who make up the Tarabot consortium have been selected as the preferred bidder to deliver the Saudi Landbridge project that will connect the Saudi city of Riyadh with the major port cities of Jeddah and Dammam with the construction of more than 1,000 kilometers of rail track. Asciano expects to generate a “very attractive'' capital return on a $7 billion rail infrastructure project in Saudi Arabia it will develop with a consortium of partners. The project partners will also upgrade the existing network and manage the rail haulage of containerized and bulk freight across the entire network. “The project is extremely attractive to Asciano as it will deliver high returns from a growing freight market with limited capital investment required by Asciano,'' managing director Mark Rowsthorn said in a statement. “Asciano expects to generate a very attractive return on capital employed, and substantially higher than we would earn if we were simply an equity investor.'' Asciano said its maximum capital commitment was expected to be about $100 million. The project has been structured as a 50-year concession to build, own and operate the network, with the consortium owning 80 percent of the concession company and Saudi Arabia, the remaining 20 percent. Asciano expects to hold a five per cent equity stake in the consortium, subject to final arrangements. The company's rail subsidiary, Pacific National, will provide a number of services including seconding staff to the operations and maintenance company, Asciano said. " The ability to leverage our operating capabilities into new and lucrative opportunities is a key competitive strength and strategic objective of Asciano,'' Rowsthorn said. The group expects to reach financial close within 12 months. __
