United Arab Emirates boasts 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.
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.
At stake for European and Chinese companies is a total $US11 billion ($A11 billion) to be spent on the project, as UAE’s Union Railway pushes to complete the rail system by 2017.
Even as the country struggles to regain its footing after the 2009 Dubai debt crisis and an exodus of investors, it is
betting that there will be enough economic activity to justify the rail system. To that end, it is starting with freight and adding passenger services.
Dubai is still building out a metro network launched in 2009 linking the emirates malls and business areas, but passenger volume is still sparse, bringing into question whether a national railway system will work in a country dominated by cars fuelled with cheap gas.
China, which sees the Gulf as a key strategic region, appears to be in a good position to win contracts.
“If the decisions are made on price and basic quality of value for money criteria, I don’t see how any foreign company could compete unless you get one of the European export-import banks to go in and try to match Chinese financing,” said Bill McCahill, Vice Chairman for Pacific Epoch in Shanghai.
“What they do, it may not be the most cutting edge technology, the sort of Gucci leather in first class sort of thing, but it is good enough and is reliable for the most part.”
Union Railway is hoping that the 1500 kilometre freight and passenger network across the seven-member emirates will start its first complete service in 2017.
The first project is due for completion by 2014, 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.
Eventually the system will connect the UAE to Saudi Arabia via Ghweifat city in the West and Oman via Al Ain in the East.
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,” Bowker said.
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.
Chinese companies are already building up their experience in laying down networks on the desert peninsula.
China Railway Construction built the $US1.8 billion Mecca Metro between Mecca and the holy sites of Mina, Arafat and Muzdalifah, Saudi Arabia’s first dual-track light railway, which opened in November to ease congestion during the annual Haj pilgrimage.
“We get strong interest from Chinese companies,” said Abdulaziz al-Hokail, president of the Saudi Railways Organization, adding the Chinese were also active as construction agents in phase one of the Haramain High-Speed Rail and in the North South railway project.
The biggest beneficiaries are likely to be Chinese companies such as China South Locomotive and Rollin
Gulf Arab states are spending more than $US100 billion on rail projects across the region as they tackle poor public transports networks and growing populations.
The six oil and gas producers of the Gulf Cooperation Council (GCC) seek to create a similar model to Europe’s high-speed rail system, with plans to extend the estimated 1940 kilometre network even to Yemen in the South of the Arabian peninsula and link it by 2017.
The gulf’s big rail plans
Saudi Arabia is spending an estimated $US25 billion on its rail network, adding 3900 km of tracks through three major projects.
The so-called Saudi Landbridge project includes a 950 km line between capital Riyadh and the Red Sea port of Jeddah, as well as a 115 km link between the industrial city of Jubail and Dammam, the oil hub on the Gulf coast.
Another project is the North South Railway linking Riyadh via Qassim, Hail, Al-Jawf, to Al-Haditha, with branches to Ras Al-Zour and Jubail to bauxite and phosphate mines. The line will be mainly used for minerals, but general freight and passenger transport is also planned.
The high-speed Haramain Railway project will link Islam’s holiest cities Mecca and Medina to the Red Sea coastal city of Jeddah, a key entry point for millions of pilgrims, to relieve traffic congestion on the roads.
German transport group Deutsche Bahn, Italy’s Astaldi and British firm WS Atkins form parts of six consortiums bidding to build four stations along the 450 km railway.
China Railway Construction Corp said in November it expected to lose about 4.15 billion yuan ($A623 million) on the metro light rail for pilgrims.
UNITED ARAB EMIRATES
UAE’s Union Railway plans a $US11 billion and 1500 km railway project across the UAE estimated 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.
For a detailed map click on:, the state-owned rail operator, with 49 per cent.
The network will integrate the oil and natural gas hub of Ras Laffan in the north with the refinery town of Mesaieed in the south, and a high-speed link between the new Doha international airport and the city’s centre.
Construction will run until 2026, which includes freight, passenger trains and a metro.
A long-planned $US3 billion bridge linking Qatar with Bahrain has been put on hold and the project team scaled back, sources close to the project said, amid escalating costs and increased political tension.
The 40-kilometre causeway linking gas exporter Qatar to the island kingdom of Bahrain was set to play a key role in improving infrastructure connections between GCC members. Qatar also wants to build a bridge connection to neighbour Saudi Arabia via a 40 km causeway – one of the world’s longest – to Bahrain.
But the long-planned $US3 billion bridge been put on hold and the project team scaled back, sources close to the project said in June.
Bahrain said in 2009 it would study a $US8 billion railway project stretching over 184 km, including a mix of light rail trains, monorails, trams and other systems.
But these investments were part of plans to link Bahrain and Qatar with a bridge, a project which is stalled due to political tensions between the two neighbours.
The non-OPEC member’s 500 km railway system will connect ports, airports and free zones and is expected to generate a revenue of about $US250 million in its first year operation, a finance ministry official said.
The project is expected to be completed in 2017 and the government plans to award construction projects in three phases.
It will build a passenger and freight service, which will make part of the regional link. Possible extensions into the capital Muscat via a metro system are also considered.
Transport and rail companies such as Bechtel, SNCF, China Railway and Hyundai have shown interest in the pre-qualification bids for contracts.
Kuwait said in 2008 it was planning an $US11 billion rail network that will include a metro system for its capital.
A 245 km line will run from the northern border with Iraq to Saudi Arabia in the south, with links to airport and sea port, the Kuwait Overland Transport Union said.
In Kuwait City, where traffic clogs roads in rush hours, a four-line, 171 km metro is planned costing $US1.3 billion dinars.
Construction was initially scheduled to start in 2009 for completion in 2017.
Yemen said last year it would launch a $US3.5 billion rail project as part of plans to upgrade infrastructure in the war-torn country.
The 2500 km passenger and cargo network will run from the Saudi border along the Yemeni coast, passinf through the main port of Aden, to Oman, where it will join the network linking the six GCC countries.
The government had said bidding for the main 2,000 km coastal line had started in July 2010 and that it was in talks with several railway firms to build the tracks.