Saudi Arabia cancels $201m Spanish rail contract
Oil price variations are suggested to have caused the Kingdom cancelling its agreement with Spain's Talgo for the delivery of six high-speed trains
Spanish train manufacturer Talgo announced Saudi Arabia has cancelled a contract for six high-speed trains, which it had signed with the manufacturer in February 2015 for $201m.
It is likely that Saudi Arabia is scaling back on its infrastructure projects in light of global fluctuating oil prices and uncertainties in its contracting market.
Talgo had been handed the contract following a feasibility study into building a high-speed rail line between Riyadh and Dammam.
Saudi Arabian officials responsible for the project were unavailable for comment, Reuters reported, adding Talgo's share price tumbled 12% on Wednesday.
However, the Spanish manufacturer said the contract cancellation would not affect its financial projections for 2015 and 2016.
Experts have previously asserted Saudi Arabia will continue to grow despite oil price fluctuations, powered greatly due to the government's investments in infrastructure.