Greenbrier, Saudi Railway to form joint venture
Together, Greenbrier and SAR will establish a new multi-modal business centered on creating and maximizing existing and new rail routes for freight movement.
The Greenbrier Cos., Inc., Lake Oswego, Ore., and Saudi Railway Co. (SAR), Saudi Arabia, signed an agreement under which the parties will invest and generate $270 million investments in the Saudi rail industry. Greenbrier and SAR intend to establish a joint venture company in Saudi Arabia to execute railway projects and supply railcars for growth of the Saudi freight rail market.
Together, Greenbrier and SAR will establish a new multi-modal business centered on creating and maximizing existing and new rail routes for freight movement throughout the Kingdom, and ultimately, the Gulf Cooperation Council (GCC) region. The JV will invest in assets and infrastructure required to expand profitable rail service offerings to the Saudi market. Greenbrier will provide up to $100 million in new railcars, lift equipment and other terminal investment necessary to place railcars in revenue service, and will operate intermodal and other freight terminals. Meanwhile, SAR will provide the locomotives, rail access and service schedules to facilitate line haul services.
Greenbrier will also facilitate raising an additional $170 million in collaboration with SAR and international public and private investment communities. The JV will operate similar to the model of TTX in North America on car supply, and can expand to serve GCC nations. Greenbrier will have a first right to manufacture and provide railcars for the JV's railcar pool and establish a Saudi-based manufacturing/assembly presence.
The JV will also promote supply chain efficiencies by increasing local content, reducing the capital burden on SAR, lowering SAR's operating costs and improving the railroad's competitiveness with highway transport.
"The JV will benefit the people of Saudi Arabia by enhancing the capacity and efficiency of freight and logistics systems in the Kingdom while contributing to local job growth, economic development and national defense mobility,” says William Furman, chairman, president and CEO of Greenbrier. “As the Kingdom advances economic diversification to improve the life of its people, it will significantly grow its transportation infrastructure. We are pleased to partner with SAR as it addresses these needs in its rail network. We view this as a core part of our mission in every geography where we operate."