$194 bn of main line and metro projects planned
MUSCAT — A railway construction boom started this year in the GCC that is set to transform life and work in the region in the coming decade, says business intelligence service MEED.
Launching the MENA Rail and Metro Summit 2013 in Abu Dhabi, MEED said that about $194 billion worth of rail projects are currently planned or underway in the GCC.
MEED said that about $30 billion of major rail project contracts had been awarded in the region so far in 2013 out of total project contract awards of about $108 billion across all sectors making rail the biggest segment of the regions capital projects market in 2013.
“This year has seen a turning point in the regional rail market,” says MEED editorial director Richard Thompson.
“Over the past 10 months, we have seen the region’s ambitions to build metro systems and main line rail networks start to become a reality, with more than $30 billion worth of rail construction contracts awarded so far this year And there is a lot more to come.”
More than $30 billion worth of rail construction contracts have been awarded across the region in the first three quarters of 2013, compared with just $3.9 billion-worth of contracts signed in the first three-quarters of 2012. The single biggest investments this year saw $ 22 billion-worth of construction contracts awarded in June on Saudi Arabia’s Riyadh Metro. “The success of this project so far is likely to act as a catalyst for further metro schemes in the kingdom,” says Thompson.
The Riyadh Metro project is one of the key projects to be discussed at MENA Rail and Metro Summit 2013. Other projects under discussion include the Etihad Rail, Doha Metro and plans for an integrated GCC rail network. The rail boom also raises challenges for the region, particularly around skills shortages and supply chain bottlenecks.
“Everybody will be competing for the same resources,” says Thompson. “And there is a real risk of unnecessary delays and cost escalation unless people manage the situation effectively. A co-ordinated approach is required. That is what we are aiming to achieve with this summit meeting of regional rail industry leaders.”
Driving this growth is the eagerness of the GCC member countries to diversify their economy away from oil and gas earnings, as well as the anticipation of urban mobility challenges that usually accompany growth of domestic markets. Many projects involving the establishment of new ports, airports and surrounding logistics zones will also require an integrated rail network to support growth aspirations among GCC states.
Thompson further says that several new projects were launched or re-launched in 2013, with major rail schemes announced in Oman and Qatar. The UAE’s Etihad Rail is leading the way in terms of overland rail projects, with the first phase of its railway network nearing completion while phase 2 construction contracts should be awarded before the end of the year, further boosting the total value of contract awards this year.
The next 12 months could see a massive boost in the region’s rail market. Oman is gearing up for its own national railway, with Oman Rail looking to prequalify contractors for rail projects before the end of the year.
Saudi Arabia is expecting a boom in metro contract awards, with Mecca, Medina and Dammam all looking to develop metro and light rail networks in the coming years. Metro Jeddah Company has already announced at the summit that the Jeddah Metro will likely be awarded in the first half of 2015.
Outside the GCC, Iraq is keen to build up its rail network, with plans afoot for an elevated metro in Baghdad. Depending on the political situation in North Africa, there should be further opportunities to win rail deals across the region.
In North Africa, tram systems are being built, expanded and integrated into the public transport networks of major cities. The plan to build a high-speed railway between Tangier and Casablanca is also progressing.
