Sep 19 2012
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GCC countries are expected to spend $79 billion in the next 10 years on railways, as well as associated metro and tram projects. Despite inherent risks, this development is being heralded as a transport revolution that will spearhead economic prosperity across the region.
"There has been serious thinking towards mass transit in the Gulf and the broader Middle East region," said Ramiz al Assar, a senior transport analyst at the World Bank, who is advising the GCC secretariat on its railway planning.
It's not been an easy ride. There are inherent risks in such capital-intensive investments, which has made private investors elusive and forced governments to pick up the tab for what are national strategic investments. But now, after several decades of prevarication, projects are finally taking off and streams of contracts are being awarded.
A telling example is that of Saudi Arabia, which has taken more than 40 years to add to its railway system, and until last year had just one major line from Dammam to Riyadh. Now the nation has built a North-South line extending over 2,400 kilometres.
This new track links phosphate and bauxite mines being developed at Jalamid and Baitha, passes them through the northern border town of Hudaitha, onward to Sudair, Qassim, Hail and Al-Jouf, and finally reached industrial plants in Ras Al-Khair, Jubail and Dammam on the Gulf coast.
Another major Saudi venture is the 444 kilometres intercity rail transport system designed to link Madinah, Makkah and Jeddah via King Abdullah Economic City. Civil works for the high priority venture are well under way and due to be completed this year.
Saudi's transport minister Jabara Al-Seraisry expects the service to begin operations in early 2014. The project and the high-speed Haramain track will underline the Kingdom's dedication to providing improved access to the country's holy sites for millions of visiting pilgrims each year.
Contracts have been signed for the latest phase of the project, involving track laying, stations and the purchase of locomotives and rolling stock. Development of four lines stretching 113 kilometres around Makkah city centre and including 24 stations is also under way.
After a decade of delays, the Saudi Council of Ministers has given a go ahead for the Kingdom's Landbridge rail project, which will link Saudi Arabia's three largest ports. Essentially the time taken to transfer containers between the Gulf and Red Sea will be reduced to 18 hours, compared to a sea voyage of between five to seven days.
Bids were due by the end of May from Saudi Railways Company for a contract to carry out detailed engineering design work. As with the North-South line the initial idea was for both projects to progress on a build-own-operate basis backed by public private partnerships.
This model has not proved viable and the government is again taking the lead via the Public Investment Fund. Reports state that 15 firms have been invited to bid, and the winner is expected to complete the work in 13 months.
The project is a complex engineering venture over desert terrain and will involve 70 kilometres of tunnels. The plan calls for a new line running 950 kilometres between Jeddah and Riyadh, where it will connect to an existing track linking the capital with Dammam. An additional 115 kilometres of line will be built between the latter and the coastal industrial complex at Jubail.
Jabara Al-Seraisry believes that projects such as the Land Bridge, North-South and Hamarain will have a big impact on the social and economic development of the country.
Completion of current projects will not be the end of the story. A 30-year Saudi railway master plan is under preparation by Fayez Zuhair and Germany's GTZ and Dornier. The UK-based Railway Consultancy has already conducted outline studies for a 700-kilometre line connecting Taif, Khamis Mushayt and Abha with the planned Land Bridge line between Jeddah and Dammam. An additional 600 kilometre line connecting the south of Jeddah with Jizan has been looked into, along with a Jeddah-Yanbu line.
Development of a national transport and logistics network that can facilitate the movement of raw materials and finished products from industrial facilities to the federation is also central to the UAE's rail development strategy.
The first stage will link Abu Dhabi's western region cities of Habshan and Ruwais. According to the chairman of Etihad Rail, Nasser Al Sowaidi, the initial line will be ready for operation early next year, while the Habshan-Shah section will be ready by the end of 2014.
The Shah Sour Gas project undertaken by Occidental Petroleum has helped accelerate the first phase. This project is intended to develop high-sulphur content gas reservoirs in the onshore Shah field, which stands 180 kilometres southwest of Abu Dhabi city.
Etihad Rail has inked an agreement with ADNOC to transport sulphur from its sources in Shah and Habshan, to export facilities in Ruwais. The route will run through Shah, Mezairaa, Madinat Zayed, Habshan, Mirfa and Ruwais, and cover a distance of 266 kilometres.
Civil and track work contracts are being carried out by a consortium of Italy's Saipem and Technimont, together with UAE-based Dodsal Engineering & Construction.
A second phase will see a track in Abu Dhabi connect to Dubai, with services to Khalifa port, Jebel Ali port and Mussafah. Phase three will add additional routes in the northern emirates. Further links are also being planned to connect with neighbouring countries such as Ghweifat in Saudi Arabia and Al Ain in Oman.
Al Sowaidi says that the development of a network of up to 1,200 kilometres is one of the most significant national projects in the development of the UAE. The project is now so important that it has unstoppable momentum he maintains.
Etihad Rail believes the rail strategy will create a new industry, while also creating opportunities for international companies.
Driven by a need to complete huge transport infrastructure projects for the World Cup in 2022, Qatar is also racing ahead with its own rail development strategy.
Qatar Railways Development Company (QRDC) has indicated that 14 packages of work will be awarded to different consortiums, with each likely to be valued between $800 million and
QRail, a joint venture between QRDC and Germany's Deutsche Bahn, is charged with the development of Qatar's railway infrastructure. Civil works are due to begin this summer, with track laying planned in 2015.
The US' Parsons Brinkerhoff is the strategic programme manager for the $35 billion Qatar Integrated Rail Programme.
UK's Turner & Townsend has been awarded the project management consultancy contracts for both the Doha metro project and the high-speed passenger line for Qatar's national rail network. The challenge is immense. Most of the track and stations for the planned 360-kilometre Doha metro network need to be delivered well in advance of the 2022 deadline, since the government wants all surface construction work in Doha to be completed by the time the World Cup gets under way.
On top of that, four lines and 100 stations have to be built connecting the capital to outlying areas, and the entire network has to be completed by 2026.
OMAN AND KUWAIT
Oman and Kuwait are also progressing in rail development plans. Partnerships Technical Bureau , Kuwait's state organisation, is seeking to develop a $7-8 billion metro for Kuwait City using a series of public-private partnership contracts. These would involve development of track, supply of trains and integration of the network. The bureau has awarded a railway advisory contract to a consortium comprising Booz and Company, the local NBK Capital, Wilbur Smith and UK's Allen & Overy.
The Omani railway project is due to be built in three phases. The initial phase involves a 230-kilometre line from Sohar to Muscat. A second 560-kilometre line will connect Muscat with Duqm. A final phase will see the network extend a further 580 kilometres to Salalah.
The pace of railway development within the GCC will differ, but the encouraging part is that long awaited projects are gaining traction. The social and economic implications of this across the region cannot be underestimated.
© Gulf Business 2012
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