asciano consortium preferred bidder for saudi

Sydney - Monday - April 21: (RWE Aust Business News) - The
Tarabot consortium, comprising Asciano (ASX:AIO) and its seven Saudi
Arabian partners, has been selected as the preferred bidder to deliver
the $7 billion Saudi Landbridge project.
The Saudi Landbridge will connect Riyadh, the largest city and
capital of the Kingdom of Saudi Arabia, with the major port cities of
Jeddah and Dammam.
The project involves the management and upgrade of the existing
network between Riyadh and Dammam together with the construction of more
than 1,000km of rail track, and the rail haulage of containerised and
bulk freight across the entire network.
"The project is extremely attractive to Asciano as it will
deliver high returns from a growing freight market with limited capital
investment required by Asciano," managing director Mark Rowsthorn said.
The project is structured as a 50-year concession to build, own,
operate and transfer the network, with the Tarabot consortium owning 80pc
of the concession company and the Kingdom of Saudi Arabia holding the
remaining 20pc.
Subject to finalising consortium arrangements prior to financial
close, Asciano expects to hold a 5pc equity stake in the Tarabot
consortium vehicle.
In addition, Asciano will be a significant shareholder in the
operations and maintenance company as contractor to the concession
company.
Asciano's rail subsidiary Pacific National will provide a number
of services including the secondment of staff to the operations and
maintenance company, which will provide all rail services and manage and
maintain the track network.
Asciano is in ongoing discussions with its consortium partners
regarding the financing of the concession company and the Tarabot
consortium vehicle.
Asciano's maximum capital commitment is expected to be
approximately $US100m.
"Asciano will earn multiple revenue streams as a result of its
investment in the consortium vehicle, its ownership stake in the
operations and maintenance company, and the unique operating capability
of Pacific National," Mr Rowsthorn said.
"Consequently, Asciano expects to generate a very attractive
return on capital employed, and substantially higher than we would earn
if we were simply an equity investor. The ability to leverage our
operating capabilities into new and lucrative opportunities is a key
competitive strength and strategic objective of Asciano."
Construction will begin after financial close, expected in 12
months.