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Gulf to pump $100bn into rail projects

Dubai, January 12, 2011

Gulf states are spending more than $100 billion on rail projects across the region as they tackle poor public transports networks and growing populations, according to analysts.

The six oil and gas producers of the GCC seek to create a similar model to Europe's high-speed rail system, with plans to extend the estimated 1,940 km network even to Yemen in the South of the Arabian peninsula and link it by 2017.

Saudi Arabia is spending an estimated $25 billion on its rail network, adding 3,900 km of tracks through three major projects, they said.

The so-called Saudi Landbridge project includes a 950 km line between capital Riyadh and the Red Sea port of Jeddah, as well as a 115 km link between the industrial city of Jubail and Dammam, the oil hub on the Gulf coast.

Another project is the North South Railway linking Riyadh via Qassim, Hail, Al-Jawf, to Al-Haditha, with branches to Ras Al-Zour and Jubail to bauxite and phosphate mines, experts said.

The line will be mainly used for minerals, but general freight and passenger transport is also planned.

The high-speed Haramain Railway project will link Islam's holiest cities Mecca and Medina to the Red Sea coastal city of Jeddah, a key entry point for millions of pilgrims, to relieve traffic congestion on the roads.

German transport group Deutsche Bahn, Italy's Astaldi and British firm WS Atkins form parts of six consortiums bidding to build four stations along the 450 km railway.

China Railway Construction Corporation said in November it expected to lose about 4.15 billion yuan ($623 million) on the metro light rail for pilgrims.

UAE's Union Railway plans a $11 billion and 1,500 km railway project across the emirates to be completed by 2017. The project will be phased over several years.

In the end, the railway will connect the UAE to Saudi Arabia via Ghweifat city in the West and Oman via Al Ain in the East.

UAE boasts of the world's tallest building, a man-made island in the shape of a palm and is about to take its next ambitious step - linking cities by rail over the desert, said analysts.

Already investing heavily in airlines and airports, as well as roads and public infrastructure, to attract and support growing commerce, the seven emirates are leaving nothing to chance as they bet on a freight and passenger network to help drive growth, they pointed out.

At stake for European and Chinese companies is a total $11 billion to be spent on the project, as UAE's Union Railway pushes to complete the rail system by 2017.

Richard Bowker, Union Railway chief executive, said interest in bidding for the initial work, such as moving earth and laying track, has been high. "There have been companies from China, Korea, Australia, Europe," he noted.

Union Railway has already awarded a project management contract to a joint venture of US firm Parsons, and France's Systra, and a preliminary engineering contract to Parsons Brinckerhoff for the first two phases.

Europe's top logistics and engineering firms such as French Alstom, German Siemens and Canadian group Bombardier are also expected to submit bids.

"Many projects are under detailed planning or even tender and will become reality in the very near future," said Vincent Prou, Alstom's business development director in Dubai.

Freight trains, for heavy goods such as cement, aluminium, or steel, will reach speeds of up to 120 kilometres per hour and passenger trains up to 200 kph.

Rail development is also being driven, in part, by the need to transport oil and gas in the UAE, the world's No. 3 oil exporter No. 5 in gas reserves.

The first section of route is around 270 km linking the Shah sour gas field of state-run Abu Dhabi National Oil Company (Adnoc) to Ruwais and to the Shah sour gas field, which in early 2013 will begin carrying granulated sulphur from Habshan to Ruwais for export.

The second part of the line from Shah to Habshan will follow at the end of 2014. Union Railway also plans a high-speed rail link between Dubai and Abu Dhabi capable of travelling at speeds of up to 200 km per hour.

Qatar aims to have most of the 17 billion euro ($23 billion) rail project with Deutsche Bahn built by 2022, which was one of the biggest foreign deals for the German industry.

The project is a joint venture between Qatari Diar, the real estate arm of the country's sovereign wealth fund, with 51 percent, and Deutsche Bahn, the state-owned rail operator, with 49 per cent.-Reuters




Tags: UAE | Union Railway | Gulf rail project | Saudi Landbridge project | Haramain |

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