The push by Gulf Cooperation Council countries to build a GCC rail network in the coming years will continue to fuel the rapid development in the region’s transport sector, a new report has shown.
In its 2015 special report, Meed said Qatar was advanced with its work on the GCC rail network, building a 146km line from the border with Saudi Arabia to Mesaieed and the New Doha Port on the east coast.
This first of four initial phases is due to be completed in 2018, while the second phase, connecting Doha West International station to Bahrain and the Hamad International Airport, is scheduled for completion by 2021. Work on the Doha Metro is also pushing ahead with several sections now under execution.
According to Meed, the strength of the leading Gulf economies ensures that the demand for the services of the Middle Eastern airlines will also remain buoyant, driving new plane orders and airport expansions.
While rail projects are under development across the whole of Middle East and North Africa (Mena) region, the GCC countries remain hot-spots for construction activity and investment. The long-term ambition of providing a comprehensive rail network, together with the urgent need to tackle urban congestion, continues to drive activity in the sector.
In 2014, some $13.8bn of rail contracts were awarded compared with about $36bn in 2013, with several major projects set to move forward in the coming months, Meed said.
The successful construction of projects such as the Dubai Metro, which opened in 2009 and the massive funding requirements to build a regional rail network may also change the way future schemes are financed.
Evidence that Gulf rail projects can be successfully implemented should mean project finance becomes a growing opportunity to augment state spending. So far, potential investors have been reluctant to commit to projects with uncertain outcomes and revenue streams, Meed said.
In this regard, much may depend on the success of the high-profile schemes such as the Doha and Riyadh metros, both of which are now being developed and are due for completion by 2018.
Meed said Saudi Arabia is set to dominate rail development in the region. In addition to the Riyadh Metro, which has been fast-tracked in a bid to alleviate the gridlock that regularly afflicts the city; a metro is under development in Makkah, to meet the needs of growing numbers of pilgrims. Bids were submitted in October from contracting consortiums for two tranches of work covering 46km of track and some 22 stations.
