CAF has signed two separate contracts in Saudi Arabia with the railway company Saudi Railway Company (SAR) and the Saudi Railways Organization (SRO).
Under the terms of the $147.4m deal, CAF will be responsible for the design, production, supply and maintenance of five diesel push-pull trains for SAR which will be used for the north-south railway.
Capable of operating at speeds in excess of 200km per hour, the trains will have a restaurant car, family and prayer areas, and will be able to carry passengers' cars. The trains are scheduled to be delivered within two years.
The contract with SRO will involve the supply of an additional four push-pull trainsets, while the average value of the two contracts will be about $263.38m.
According to the company, the contracts will further strengthen commitment to long-term presence not only in Saudi Arabia, but also in the area of influence, with representative offices already set up in Riyadh and Doha.
SAR chairman Mansour Al-Maiman was quoted by local newspapers as saying that the north-south railway project will cost about SAR20bn ($5.33bn) and will depend mainly on goods transportation as a major source of its revenue.
Al-Maiman said that the project will be financed by the government either through issuance of sukuks, direct government funding from the state budget or Public Investments Fund (PIF).
According to reports, the budget assigned for the project does not include compensation that will be paid by the Ministry of Finance for real estate expropriations.
The major revenues of the project are expected to come from cargo where some agreements have been signed with certain companies, such as Aramco and agricultural companies for transportation of their products.
Earlier this year, SAR had signed three contracts worth $624m with the Saudi Arabian Finance Ministry, which would see the implementation of a number of projects related to the north-south railway.
The 2,750km railway line which starts from Riyadh will link the Saudi Arabian capital with the northern town of Hudaitha, passing by Sudair, Qassim, Hail and Al Jouf.