Saudi Arabia signed a contract worth 30.8 billion riyals ($8.2 billion) on Saturday with a Spanish consortium to build a high-speed railway connecting Islam's holiest cities, Mecca and Medina, with the port city of Jeddah.
Saudi Finance Minister Ibrahim Alassaf and Transportation Minister Jobarah al-Suraisry signed the agreement with Spanish Foreign Minister Jose Manuel Garcia-Margallo and Public Works Minister Ana Pastor.
Al-Shoula consortium, which comprises Spanish companies including ADIF, RENFE and Talgo, won the project last year after a long bidding process in which it competed with a French-led group.
The contract is for the second phase of the project involving track laying, electrification, operations and maintenance.
The world's top oil exporter is rapidly expanding its rail network, laying lines to its northern cities and phosphate mines, and connecting its east and west coasts in addition to the Mecca-Medina line.
The new rail link is expected to improve transport connections during the annual haj pilgrimage. ($1 = 3.7503 Saudi riyals) (Reporting by Angus McDowall)
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