Saudi Arabia to build a metro rail network in Riyadh
The Dubai Metro rail system, pictured here, was the first in the Gulf Arab region. Operations began in 2009.

Saudi Arabia has awarded multi-billion dollar contracts to three multi-national consortia, made up of US, Asian and European companies, in order to design and construct the first commuter-rail network in capital Riyadh.

The $22.5bn (£14.3bn , €16.6bn) Riyadh metro rail system will involve six railway lines extending 176 kilometres, making it the world's largest public transport system under development.

Saudi officials confirmed that US construction major Bechtel, which heads a group that won a $9.45bn order to build two lines, will partner with Germany's Siemens Aktiengesellschaft and US-based Aecom.

A second consortium of Spain's Fomento de Construcciones y Contratas, France's Alstom Transport and South Korea's Samsung C&T Corp won a $7.82bn order for three lines.

A third consortium of Italy's Ansaldo STS, Canada's Bombardier and India's Larsen &Toubro won a $5.21bn order.

Construction is expected to commence in early 2014 and metro rail services are expected to be operational in 2019, say media reports.

Middle East Providing Growth

Construction companies are likely to profit from these billion-dollar contracts. Some of them are struggling as sluggish economic growth in their home market and the austerity drive across Europe has affected business.

The Riyadh metro project "will be a major driver of employment and economic development," said Ibrahim Bin Muhammad Al Sultan, head of the government body overseeing the project.

"It will also help to reduce traffic congestion and improve air quality."

Oil-rich Saudi Arabia is investing big money into developing infrastructure to improve living standards and ease social discontent following the 2011 uprisings elsewhere in the region.

Last August the government approved a $16.5bn plan to modernise the public transport system in the holy city of Mecca, which will get a bus network and a commuter-rail network. Among the several railroad projects under construction is a 2,750 km passenger and freight line running from Riyadh to Al Haditha, near the northern border with Jordan.

These projects will help the top exporter of oil reduce its dependency on the commodity, as it attempts to diversify its economy.

The Gulf Arab region's first commuter-rail system began operations in Dubai in 2009.

However, media reports said that construction costs escalated by 80% to $7.62bn, after the government decided to extend the railway line by over four kilometres, add stations and improve interior design.