Infrastructure News

08/28/2018

Government of Jordan planning US$4.2 billion rail concession

The Ministry of Transport of the government of Jordan is reportedly planning to contract Chinese company Touchstone to deliver a US$4.23 billion rail project through a build-operate-transfer (BOT) or build-own-operate-transfer (BOOT) agreement.

The project will connect the major cities, industrial zones and logistical hubs in the country to port city Aqaba and the borders with Syria, Iraq and Saudi Arabia. Construction is projected to take four years.

The Ministry conducted a feasibility study of the project in 2010 and in 2015 worked to implement it through a publicly procured construction contract and private operator. China Civil Engineering Construction Corporation was tapped to operate the railway, but the government failed to secure sufficient financing for construction.

The shift to a concession model has been attributed to the success of the Queen Alia International Airport project. A 25-year concession agreement to operate the airport, rehabilitate its facilities and construct a new passenger terminal was awarded in 2007 to Airport International Group, which is now majority-owned by Groupe ADP.

The railway will primarily transport freight. A representative of the Ministry of Transport has stated that a passenger railway would require government subsidies, which it currently cannot afford.

The project could potentially connect Jordan to the New Silk Road, a railway network being developed by various Chinese companies linking Beijing to Istanbul via Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Iran, and on to Europe, as part of the Chinese government's "One Belt, One Road" initiative.

A representative of the Ministry has stated that the project is not explicitly part of the initiative. However, the planned rail connections to the borders of Iraq and Syria will link to Iran, which is part of the Chinese project. This also means that the railway will give Jordanian businesses greater access to European and central Asian markets.