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Serco secures first major rail contract in Saudi Arabia

Date: 23 Feb 2015

Serco Group plc, the international service company, announces that a Serco-led consortium has today signed a contract with the Saudi Railway Company (SAR) to be its partner, providing management and technical support for operations on the North South Railway (NSR).  The contract, which starts immediately, has a total value to Serco of approximately £120m over five years and is Serco's first major rail contract in Saudi Arabia.

SAR is a government-owned company established in 2006 by Public Investment Fund (PIF), the investment arm of the Saudi Arabian Ministry of Finance.  PIF assigned SAR to develop and operate railway services comprising passenger, general freight and heavy haul.  The North South Railway, at over 2,750 kilometres in length, is one of the largest rail projects currently being developed worldwide. The overall rail network that SAR is responsible for constructing and operating is more than 4,500 kilometres.

Under the partnership arrangement, Serco will operate as prime contractor and will provide technical support for passenger operations.  Other consortium members include Freightliner Group, who will take lead responsibility for providing freight expertise and support, and Network Rail Consulting, who will provide infrastructure technical support. The consortium will use its international expertise in rail operations to develop and implement operating procedures and systems, provide management and technical assistance, and deliver training and expertise to support the development of capabilities within SAR and its personnel.

Dr Rumaih al Rumaih, CEO of the Saudi Railway Company (SAR), said: "In order to manage this new network, SAR went out to tender and invited a number of companies, based on their international experience in rail operations and infrastructure management, in order to support us.  SAR's vision is to implement world-class railway practices and deliver the highest standard of technical, commercial and operational service excellence to all SAR customers, as well as to ensure the transfer of technical and operating knowledge and skills, including training, to provide long-term employment opportunities for Saudis, to operate the rail network and develop the railway industry in Saudi Arabia.

"After an extensive exercise supported by international business consultants AT Kearney, a UK consortium consisting of Serco Group plc, Network Rail Consulting and Freightliner Group successfully won the tender process against strong international competition, and we look forward to working with them to achieve SAR's strategic plans in a five-year commercial partnership."

David Greer, Chief Executive Officer of Serco Middle East, said: "Serco has many successful years of managing and providing operational support for high performing rail services internationally; in the Middle East, Australia and in the UK.  We look forward to using these capabilities and experience, working with our consortium partners, to support the Saudi Railway Company in ensuring safe, effective and reliable services on the North South Railway in Saudi Arabia. This new contract is our first major transport win in Saudi Arabia, a country which is central to our growth plans in the Middle East."

Rupert Soames, Serco Group Chief Executive Officer, said: "I am delighted that Serco have won this important contract, which is completely aligned with our strategy of building an international public service business specialising in Transport, Justice & Immigration, Defence, Citizen Services and Healthcare. It also reinforces the success we have had in other rail projects in Dubai and Qatar, and positions us as the leading operator in rail in the Middle East."

Ends

For further information please contact Serco:

Stuart Ford, Head of Investor Relations T +44 (0) 1256 386 227

Marcus De Ville, Head of Media Relations T +44 (0) 1256 386 226

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Last Updated: 29 May 2015