Saudi Arabia aims to build buses, operate toll roads: transport minister

By Andrew Torchia

JEDDAH, Saudi Arabia (Reuters) - Saudi Arabia has held preliminary discussions with foreign firms about manufacturing buses domestically and plans to convert part of its highway system into toll roads to help make its transport system more efficient, the transport minister said.

"We are developing the public transport system with a lot of buses, so we want to see how we can leverage this to develop domestic industry," Nabeel al-Amudi said in an interview on the sidelines of a business conference in Jeddah on Sunday.

He declined to name the companies with which Saudi Arabia had been talking.

The kingdom, which does not have a significant auto manufacturing industry, is spending billions of dollars to expand public transport systems in the capital Riyadh and other big cities, and has imported thousands of buses in the last few years.

Last May, German vehicle maker Daimler received an order from Riyadh for 600 Mercedes-Benz Citaro buses, the largest order for the vehicles in the history of its bus division. China Yuchai International last month announced the delivery of 800 buses to Saudi Arabia.

Producing the vehicles locally would allow Saudi Arabia to save on import costs while creating jobs and expanding domestic industry -- key goals of an economic reform programme designed to reduce the economy's dependence on oil exports.

Amudi said the potential bus project was separate from a memorandum of understanding signed by Toyota Motor Corp in March last year to conduct a feasibility study on producing vehicles and parts in Saudi Arabia. The reform programme features plans to have the private sector operate much of the kingdom's transport infrastructure, including airports and sea ports, with the government keeping a role as regulator.

Amudi said that approach would be extended to the highway network.

The government hopes to establish between four and six toll roads which private companies would operate in exchange for fees, although this may be difficult because of the need to give road users the option of taking a non-toll route in each case, Amudi said.

Draft plans for this project may be ready in six months, he added.

(Reporting by Andrew Torchia; Editing by Keith Weir)