The Diplomat in Spain

A section of the High Speed railway which will link Medina and Mecca./ Picture: Courtsy of ADIF. 

Eva Cantón. Madrid

Saudi Arabia, first oil exporter in the world and the biggest economy of the countries integrating the Gulf Cooperation Council (GCC), is the next destination for the King Juan Carlos in the tour of the countries of the region he started last April to make way for the Spanish companies in these markets.

His presence will mean a guarantee for the Saudi authorities in the support of the Head of State to the Spanish consortium in charge of the works of the AVE (High Speed Train) connecting Medina with Mecca, a large-scale project granted in 2011 valued at almost 7,000 million euros where the King played a relevant role.

Works are not keeping the expected pace due to a delay in the execution of the first phase, in hands of a consortium led by China Railway, but Spanish diplomatic sources say that the issue has already been channelled by both Administrations.

In fact, the minister of Public Works, Ana Pastor, travelled last February to Riyadh to supervise the works on the ground and to try to calm things down. Therefore, it is now expected that the King’s visit supports the recovered climate of confidence.

Not only the so called AVE of the dessert is at risk, but also the entire network of SMEs of the building sector that could access the Saudi market by the hand of big firms if the works reach a good conclusion in the planned calendar: December 2016.

Although the high temperatures will prevent the King from seeing the course of the works, the companies participating in the project will inform about its progress in presence of the vice heir to the Saudi throne, the prince Muqrim, in the Royal Palace of Jeddah.

Twelve Spanish companies –three of them public and nine of them private– are the ones responsible for the design, the construction, the operation and the maintenance of a railway line of 450 kilometres and of the trains providing the service to 160,000 travellers a day for twelve years.

The business opportunities in Saudi Arabia mean almost 400,000 million dollars of public investment that this monarchy of the Gulf plans to allocate until 2015 to sectors such as Health, Education and Infrastructures, a chapter where the railway lines crossing the country will take 100,000 million.

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It is a key factor minimizing the impact that resuming business relations with Iran will have

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Therefore, another aspect of the visit of the King Juan Carlos to Jeddah will be minimizing the impact that resuming contact with Iran as an oil supplier will have now that the international community is speeding up the thaw phase with Teheran.

Spain, that bought almost 52 million tons of oil a year to Iran, looked for other countries to supply it, after the European sanctions, and Saudi Arabia started to supply 14 per cent of the total. This generated greater sympathy towards Spanish companies to take responsibility for their big infrastructure projects.

Spanish exports tripled in 2013, reaching 103 million euros and, apart from the AVE Medina-Mecca, they had other orders such as the one for FCC to build three metro lines in the Saudi capital, valued at 6,000 million euros. The sight of the fear that resuming relations with Iran, traditional enemy to Saudi Arabia, messes this good tune up will not be lost.

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Almost thirty businessmen and three minister will be accompanying the monarch

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A prove of the interest that this third stage in the King’s tour of the Persian Gulf has, after visiting the Arab Emirates, Kuwait, Oman and Bahrain, is that almost thirty businessmen will be accompanying the official delegation made up of the holders of Public Works, Defence and Industry, as well as the secretary of the State of Foreign Affairs; the one of Commerce and the general secretary of Transport.

Accompanying the King there will be representatives of the CEOE, of the High Council of Chambers of Spain, Abengoa, Acciona, ACS, Adif, Agrosevilla, Airbus, Consortium of Renewable Energies, Copasa, Esade, FCC, Ferrovial, Gestamp, Getinsa, Idom, Ineco, Indra, Isolux, Mondragón Educación, Navantia, OHL, Renfe, Sacyr, Sener, Técnicas Reunidas, Talgo, Telvent, Typsa, Tragsa and Urovesa.