Briefing: Structuring private sector participation in the Dammam, Saudi Arabia, public transport project

摘要

The Dammam metropolitan area is the largest conurbation in the Eastern Province of the Kingdom of Saudi Arabia. Its population exceeds 4 million, and this is expected to increase significantly between now and 2030. Private cars and taxis are the main modes of transport. This leads to congestion, and the costs and pollution resulting from this congestion make it necessary to develop more sustainable transport solutions. In 2014, the Ministry of Transport carried out a feasibility study for a new integrated public transport system. The collapse of the oil price in 2014 prompted decision makers to rethink the procurement plan for the project. Prince Muhammad bin Salman urged his government to adopt public-private partnerships (PPPs). The decision to start a PPP should be a strategic one, depending on the goals that the government wishes to achieve. The project poses some specific challenges. Public transport is virtually non-existent in Saudi Arabia, resulting in uncertainty in ridership predictions. Allocation of the risk of ridership revenues is one of the distinctive attributes in the procurement options for transportation projects. A PPP is considered a promising option for implementation of the project in Dammam. Strategic goals will have to be set before structuring the PPP.