GCC to spend $97b on road, rail projects by 2020

Issac John
Filed on November 24, 2011
GCC to spend $97b on road, rail projects by 2020

DUBAI - The GCC countries are on track to spend a total of $97 billion between 2011 and 2020 for new road and railway projects, Kuwait Financial Centre, or Markaz, said on Wednesday.

The total value of railway projects, including rail, metro, tram, and stations, is estimated to be $79 billion. This includes the $30 billion GCC rail network to be shared among the member countries.

For the roads sector, the total value of ongoing projects amount to almost $18 billion, Markaz said in its latest installment of the GCC infrastructure series. The series covers Power, Airports, Seaports, Roads and Railways, ICT and Water.

In the wake of Dubai’s successful metro launch, other countries are also planning or discussing their versions of the metro. Abu Dhabi too has joined the fray with 131km metro rail system, which is expected to partially start in 2015.

They also plan a pan-GCC rail network. The updated value of this project is around $30 billion and will consist of a first rail line connecting all the GCC countries. The GCC network will include one rail line of 1,970km connecting all GCC countries and Qatar via a bridge. The second line of 1,984km will stretch between Kuwait, Saudi Arabia, the UAE and end in Oman. Land acquisition expenditures for the project are estimated at $3.1 billion, while the cost of purchasing trains and locomotives is budgeted at $1.8 billion. Work on the railway would start in 2012 following the completion of engineering studies.

Beginning from Kuwait, the railway will pass through the eastern Saudi Arabia city of Dammam, where it will connect to Bahrain through a bridge that runs parallel to the King Fahd Causeway before reaching Qatar via Salwa. The UAE and the Kingdom would be connected through another line that will run through Bathaa. The railway line will also run through Abu Dhabi and Al Ain to reach Oman through Sahar and Muscat. Qatar and Bahrain will be connected by a bridge.

Once completed, developers of the network plan to link the railway with ones in Jordan, Syria and Turkey.

Over the next 15 years, the total projected investment in rail projects in the GCC countries will be in excess of $100 billion including Qatar’s $35 billion, according to industry sources.

“Rail will be an interesting option for travelers because the current preferred form of transportation in GCC is by road or by air,” said Markaz.

The report said the GCC has historically focused its transportation investments in building roadways, thus ensuring high quality roads across most of the region. Almost 100 per cent of the roads in the GCC are paved; compared to the average in other emerging countries, which is below 75 per cent.

The aggregate length of roads available in the GCC is 291,313 km. Of this, 75 per cent is in Saudi Arabia, and 16 per cent is in Oman. These two countries are the two largest countries of the GCC as per area. The rest of the countries have a combined “road share” of approximately seven per cent.

“Expenditure on the transportation sector has primarily been focused on road networks. This can be mainly attributed to the significantly higher density of motor vehicles per kilometer of road in some of the GCC countries as compared to the BRIC peers. Among the six GCC countries, the UAE, Kuwait, Bahrain, and Qatar have significantly higher traffic density in comparison with the rest of the countries,” the report said.

By the end of June 2011, the GCC had around $18 billion worth of “ongoing” road projects.

Only $200 million of the above total has a “delayed” status. The UAE is by far the most dynamic country with a share of close to 42 per cent. Qatar is all set to catch up with a share of 22 per cent.

Markaz said the future strategy for the road sector in the GCC is very ambitious. When the estimated value of projects announced for the period 2011–2015 is taken into account, the total GCC spending amounts to $58 billion, it said.

For the coming five-year period, Qatar will overtake the UAE in terms of planned investments, the report said.

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