Capacity hike, delays bloat CRCC Saudi project costs

China Railway Construction Corp. (CRCC) said changes in project requirements coupled with delays bloated the cost of a railway project in Saudi Arabia that is set to start operation next month.
In a statement, CRCC said the cost of the US$1.8 billion A1-Mashaaer Al-Mugadassah metro light rail project "significantly exceeded the estimated figures at the time of signing the contract."
The company has said it would book a loss of about RMB4.2 billion (US$623 million) on the project. 
Arabian Business.com reported CRCC as saying the Saudi government had substantially increased the transportation capacity of the project for 2010, as compared with the capacity laid out in the contract. 
An underground pipeline network, land expropriation and relocation managed by the client were also substantially delayed.
CRCC has already recorded a loss of RMB294 million from the project in 2009 and another RMB254 million in the first half of this year.