The Government of Saudi Arabia has announced this Monday that will not reopen the high-speed line linking the holy cities of Mecca and Medina until next month of September, which is a new blow for the manager of the line, the Spanish Renfe.
The Alawite kingdom decided to close the line last March 20 as one more among the measures taken by the Executive of the country to stop the expansion of the coronavirus. The Government closed airports and railway lines, which did not prevent the high-speed line built by the consortium of Spanish companies – led by Renfe with 27% – for more than 6,000 million euros.
Despite the measures to reopen and return to activity that most governments are taking, in the case of Saudi Arabia it will be delayed to September, according to the note on Monday. The management of the line «will announce to its clients next August the opening dates of the reservations, with the availability of reservations and purchase of tickets through the website of the train, which includes all train destinations from September »the statement said. According to the announcement, the local government is going to take advantage of the stoppage from June to September to expand the capacity of the trains.
With this new delay, the line will be closed this 2020 a little over five months, which is added to the stoppage of last year due to a fire at the station in Jeddah at the end of September, in which a dozen people were injured. On that occasion, the incident – which was not the responsibility of Renfe or the Spanish consortium that built the line – kept the operation of the project closed for two months, until December 11.
The delay in opening the line is a new setback for Renfe in this project. Until December 2018, the Spanish operator accumulates losses of 146 million euros. According to the Treasury, and as reflected in the 2018 Renfe Report, the railway operator adds those 146 million losses in the phase prior to the operation of the line, that is, from 2012 to 2018.
Is about extra costs, unforeseen and “Other unmet needs”, according to the Treasury, which has generated operating losses of 146 million to Renfe in the phase prior to the operation of the line. Renfe is the company with the most weight -27% – in the consortium that won this contest and has built the project.
To these losses must be added those of the exploitation phase. At first, at the beginning of the project, the consultancy of the former socialist defense minister Julián García Vargas estimated the line’s traffic forecast at 60 million passengers a year. The number of necessary trains – which Renfe bought from Talgo – and the number of workshops on the line were also calculated on this number of passengers.
However, those forecasts have turned out to be inflated and Renfe has made a new traffic forecast, which reduces some six million passengers per year.
Even so, the operator highlights in its 2018 accounts that it does not expect changes in the profitability of the project because the period of operation of the line had been extended from the initial seven years to twelve, to which it adds a reduction in operating costs . However, now the line is going to be closed for practically half a year, in addition to the two months of 2019, just when it was expanding hours and frequencies.
The good news for Renfe comes from the United States, where it has won the competition to develop the first high-speed train in the United States, which will link Houston and Dallas, and which is closing the contract with the private consortium Texas Central.
The Italian construction company Salini Impregilo will be in charge of building the infrastructure that it plans to have ready in six years. Later Renfe will be in charge of its maintenance and of operating the trains between both Texan cities from 2026 to 2042.
In the design and construction phase (until 2026), the Spanish company will obtain $ 311 million in infrastructure supervision and consulting, and during the years of operation and maintenance (between 2026 and 2042) the expected revenue totals 5,611 million Dollars. Total, Renfe foresees a turnover until 2042 of 6,000 million dollars – about 5,500 million euros.
The high-speed train between Houston and Dallas, the first in the United States, will connect these two cities, 386 kilometers away, in less than 90 minutes.