Trillions of dollars will be spent on transport infrastructure projects before 2020, with the majority of these investments in the emerging markets.
HSBC Global Research estimates that Asia requires USD11.5 trillion by 2030 to fund crucial infrastructure development, including the upgrade of roads and railways to transport higher volumes of goods. China accounts for a significant proportion of this. According to China’s 12th Five-Year Plan, 56 new airports will be built, 19 will be relocated, and 91 will be expanded by 2015.
However, large-scale spending on infrastructure is not just happening in Asia. Plans in the Middle East and North Africa (MENA) are also ambitious. Many Arab nations are keen to diversify their economy and move away from a dependency on oil. For this, rail connections are key. Efficient movement of goods and passengers is vital for a growing economy, although rail links in many regions are limited. Subsidised petrol in the UAE (United Arab Emirates) has traditionally encouraged people to drive but as populations across the UAE have risen sharply, so the need for rail has increased.
The UAE has only the Dubai metro, which opened in 2009. But the Gulf Cooperation Council (GCC) rail network is about to change this. When finished it will connect the six GCC member states of Bahrain, Kuwait, Qatar, UAE, Saudi Arabia and Oman. The cost of about 2,200km of track and rolling stock could easily reach USD100 billion. The network, which is scheduled to open in 2018, will also connect all the countries to the main ports of the Gulf and the Indian Ocean and improve the movement of goods across the world. A rail line running from the Red Sea in the West to the Arabian Gulf in the East cuts out the sea time shipping goods around the Arabian Peninsula. While cross-border rail links will improve the swift transfer of freight, planned metro projects should greatly ease commuter travel in the major cities.
City rail projects worth USD76.2 billion over the next decade are either under construction or in the planning stage across the MENA region. In Qatar there is the 300km Doha metro scheme, part of the USD35 billion Qatar Integrated Rail Programme. The football World Cup in 2022, which will be hosted by Qatar, has been a key factor in accelerating the project.
In Riyadh, the capital of Saudi Arabia, there are plans for an ambitious metro project covering 180km and costing USD22 billion. Kuwait is moving ahead with the region’s first metro scheme structured as a public-private partnership (PPP), in which the government and private companies go into business. The project, which is estimated to cost USD7 billion, will run for 160km with 69 stations. There is a growing interest in PPPs, but road projects have so far struggled to attract funding from such partnerships. More info