This document must be read in conjunction with Guideline 01: The Main Document, where all definitions and standards used in the set of guidelines and documents are provided.

The phrases and terms mentioned below - wherever they appear in this evidence - shall have the meanings specified next to each of them, unless the context requires otherwise:

• The Authority: Transport General Authority.

• Local Content: The total expenditure in the Kingdom through the participation of Saudi elements in the workforce, goods, services, assets, technology, and similar.

• Local Content Percentage: A percentage indicating the amount spent on Saudi elements in the contract or in the establishment, compared to the total expenditure on either.

• Baseline: The local content percentage of the commercial establishment when submitting a license application or renewing the license.

• Local Content Certificate: A document issued by the Local Content and Government Procurement Authority that indicates the baseline of the establishment.

• Guideline: Local Content Percentage Model: A guide issued by the Local Content and Government Procurement Authority and published on its website that explains the mechanism for filling out the local content percentage form (baseline).

This guide aims to explain the methodologies and tools for measuring and developing local content, making it the primary reference for coordinating local content development efforts in the railway transport sector in the Kingdom. This is achieved by clarifying the necessary requirements for measuring the baseline of local content for entities operating in the sector, in addition to outlining the local content requirements for companies operating in the railway transport sector, in a manner that does not conflict with the applicable laws and regulations.

The Transport General Authority and the Local Content and Government Procurement Authority seek to develop local content in the railway transport sector by aligning the targeted plans to increase local content submitted by railway service providers with the strategic objectives of the railway transport sector and monitoring their implementation to enhance the contribution of local content to the national economy sustainably.

The evidence and guidelines directed in this regard apply to:

• A- Licensed railway service providers from the authority with at least 12 months remaining on their license.

• B- Railway service providers wishing to renew an existing license for a period of no less than 12 months.

• C- When issuing a new license for a period of no less than 12 months.

The railway services subject to the scope of this guideline include the following activities:

• 1- Operating and managing the infrastructure.

• 2- Maintaining the elements of railway infrastructure.

• 3- Managing and operating container handling areas connected to the network.

• 4- Operating stations.

• 5- Transporting passengers by rail between cities.

• 6- Transporting passengers by rail within cities.

• 7- Transporting goods by rail within cities.

• 8- Transporting goods by rail between cities.

• 9- Maintaining trains, carriages, and equipment.

The requirements outlined in this guideline do not affect any local content obligations of the licensee under any other regulatory instruments.

1-4 Measurement of the Baseline for Entities:

The measurement of the baseline for the entity is based on the axes mentioned in Section 3 of this evidence, using Form (1) - with specific controls - which allows the entity to calculate its local content ratio and measure the details of its historical local content performance for the last completed fiscal year.

If the entity wishes to issue a local content certificate, it must approach one of the auditing offices accredited by the Local Content and Government Procurement Authority to review the form and complete the subsequent procedures.

(1) The local content measurement form and guidelines for filling out the form, as well as the list of accredited auditing offices, can be found in the section on forms and guidelines for measuring local content, and the auditing offices section on the website of the Local Content and Government Procurement Authority.

The requirements related to local content are submitted to the Public Transport Authority according to the scope of application of the Evidence as follows:

• Local Content Certificate (baseline at the establishment level) as outlined in section 4.1 of the Evidence.

•  A localization plan for jobs related to the activities of the rail transport sector, at the establishment level, in accordance with the duration of the license, which must include at least the following data:

  • A- Job titles at the establishment.

  • B- Current localization percentage for each job title.

  • C- Target localization percentage for each job title.

• A plan for developing local content in goods and services and enhancing capabilities at the establishment, in accordance with the duration of the license, which should be clarified by the following mechanism, including but not limited to:

  • A- A list of goods that represent at least 70% of the total expected expenditure on goods.

  • B- A list of services that represent at least 70% of the total expected expenditure on services.

  • C- The current and expected country of origin for the goods mentioned in point (A).

  • D- The current and expected country of origin for the service providers mentioned in point (B).

  • E- The current and expected expenditure on training Saudi employees.

  • F- The current and expected expenditure on research and development.

  • G- The current and expected expenditure on supplier development.