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GCC Invest More Than $10bn in Metro and Rail

Middle East : 03 May 2011

Projects involving public transport and the rail infrastructure in the GCC nations grew enormously in the past few years. Metro and rail projects have led the pack with the total value of completed projects as well as those under construction hitting $10,270,000 in Saudi Arabia, Qatar and the UAE.

Financial experts in the GCC expect that number to rise as more developments arise and become urgent in the near future, such as the pan-GCC rail project that will link Oman to Kuwait through Qatar, Bahrain, Saudi Arabia and the UAE. This massive project is evidence that PPP (or Public Private Partnerships) are essential in the development of these ambitious plans for public infrastructure.

Analyst for the economy Omar Al Juraifani noted that these metro and rail projects are categorized as large-scale developments and need to be backed by massive infrastructure investment. They will also provide substantial job opportunities and provide a stable return. Al Juraifani also stated that PPPs are required to provide delivery guarantees and the highest standards of cost efficiencies and quality.

Al Juraifani stated that Doctor Kim Gario, a professor and UN national strategy expert, spoke at a recent speech at the Metro and Rail Conference and Exhibition in Kuwait regarding the public transport investments of other nations. Dr Gario said that for every $100bn invested in American public transportation, 4000 jobs were created. Also Gario said that $1bn in investments generated $3.5bn in GDP. Al Juraifani asked how many jobs have been provided by the GCC mega projects, as well as the size of the contribution these projects have made to the area’s GDP.

He stated that, in his opinion this essential industry should be nationalized from the outset. Al Juraifani stated that the Saudi government, as well as all those in the GCC, need to feel the benefits of foreign firms involved in the developments of metro and rail projects in the area by making sure the technologies are transferred to national experts. He also noted that the national rail and metro institute needs to be established as the umbrella for businesses involved in projects and plans aimed at the 80 percent Saudization rate, which is supposed to take place in the next five years and employ Saudi operators, engineers and maintenance staff. The tenders for these projects must be viewed not just in terms of price, but also with the aim to transfer training and expertise at a national level, creating the opportunity for partnerships and higher levels of return for all Saudi citizens, investors and the economy of the Kingdom as a whole.

The Metro Dubai project, valued at $4.5bm by the Roads and Transport Authority, as well as Makkah’s Holy Rituals Train valued at $1.77bn, is included on the list of ongoing and finished projects in the GCC. The transportation market in Saudi Arabia is valued at approximately SR 70bn (over $18bn), according to reports by Al Riyadh media. Qatar has also announced a new metro network worth $4bn and part of the preparation for the FIFA World Cup event to be held in Doha in 2022.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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