For duck’s sake
In 2011, the Saudi government awarded the contract for the country’s Haramain High Speed Rail Project to a consortium of twelve Spanish companies and two local partners, with a budget of €6.7 billion, El País in English reported. But the deal, which includes supplying 35 trains and operating a line across the desert for 12 years, now appears to be beset with contractual and engineering difficulties.
[“Saudis kick up storm over Spanish group’s high-speed desert rail project”, Luis Gómez / Rafael Méndez, El País, 6 Feb 2015]
[…] “In Saudi Arabia, any major business deal is done through relationships. If you don’t know somebody high up, it’s not going to work,” says an expert who works in a Spanish business school. “The first thing is to find a powerful lobby. It is clear that the former king, Juan Carlos, played a big role in this, and that his long-standing friendship with the Saudi royal family was fundamental. These relationships have to be maintained: you have to have tea with them every now and then.” Juan Carlos traveled to Saudi Arabia at the end of January.
Even if the route is open by December 2016 – the Saudis are pressing for it to be ready by the summer of that year – Spain’s problems will only be starting. The consortium has agreed to manage a line for 12 years that is due to handle around 60 million passengers annually. Spain’s own national AVE network carried a record 29.6 million people in 2014. “We’re talking about a train every four minutes. Like in Japan! And we’ll have to manage separate carriages for men and women. Agreeing to manage a route for 12 years is a huge risk for public companies like Adif and Renfe,” says one board member, pointing out that private companies involved in the construction will make their money, but that turning a profit from operating the line, which will fall to Renfe and Adif, will be a much more difficult enterprise.
“This marvelous project could end up being a white elephant,” says one former engineer on the project already quoted, explaining that when the kings of Siam were unhappy with one of their subjects, they would send him a white elephant, a sacred animal. The recipient would then be obliged to look after it, and allow anybody who wanted to venerate it to do so. They often ended up broke.