Closing of security package for Stadler project in Saudi Arabia

In the first quarter of 2024, Stadler concluded a delivery and maintenance contract with Saudi Railways (SAR). For Stadler, this is an important milestone, as SAR’s order marks the first for Stadler in both Saudi Arabia and the wider Gulf region. Following this, AIL has been asked by Stadler to structure a security package to mitigate certain political and commercial risks in connection with this project.

SAR launched a tender in mid-2022 for the delivery of 10 trainsets, spare parts and special tools, with an option for an additional 10 trainsets to increase the passenger capacity between the two biggest cities in the country, Riyadh and Dammam. In the context of the railway vision 2030, Saudi Arabia has ambitious plans for the development of its rail infrastructure over the next decade. The country is aiming to connect the Red Sea and Arabian Gulf ports as well as establish an 8’000 km rail system throughout the country including raising the annual transport capacity for passengers to over 3 million.

In addition to the trains, Stadler will provide full maintenance support and spare parts for a period of 10 years. After the award of the project to Stadler and negotiations during the second half of 2023, both the delivery and the maintenance contracts were signed by Stadler and SAR in the first quarter of 2024, in the presence of a high-level delegation from Switzerland, in particular the Swiss Federal Councillor Mr. Guy Parmelin.

The trains to be produced consist of two diesel-electric power heads and five intermediate coaches, with a length of 175m and approx. 320 seats. Maximal speed is approx. 200 km/h. With the option, SAR reserves the possibility to purchase 10 additional identical trains.

Considering the relatively long production and delivery period, with delivery of the trainsets ending in year 2029 and potentially later if SAR exercises the option for the additional 10 trains, a sound security concept was essential for Stadler to mitigate the main political and commercial risks over the entire production and delivery period. Based on the support of the Swiss Export Risk Insurance (SERV), AIL structured and implemented a tailor-made security package for the benefit of Stadler covering certain pre-shipment and payment risks during the production and delivery phase.