Crisis forces urban rail rethink

13 September 2010

After an initial rush to follow Dubai, several projects around the Gulf are being reconsidered to ensure value for money in the current economic climate

Governments around the GCC have been slow to recognise the importance of public transport to their plans for urban development, offering their citizens no alternative to the lure of cheap, subsidised petrol.

A lot of people have been waiting to see if Dubai metro succeeds in cutting congestion and encouraging investment

Paul Abbosh, Atkins

With the population boom over the past 20 years accompanied by a surge in the real estate and construction markets during the last decade, citywide planning has become increasingly difficult as new projects have sprung up and roads have become choked by congestion.

Despite the surge in economic and industrial development around the region in recent years, light rail and metro systems were not factored into governments’ planning for their urban expansion. Public transport has been limited to erratic bus services, stuck in the same congestion.

GCC transport catching up

Caught out by the rate of change, governments have been forced to rapidly reappraise their urban transport policies. Light rail and metro projects worth up to $50bn are now at various stages of development around the Gulf.

“It took the region a while to come round to rail because this is an oil producing region and petrol is cheap. Culturally, people are happier travelling in an enclosed private space like a car rather than an open public one like a train,” says Paul Abbosh, Middle East development director for UK consultant Atkins.

Countries [in the region] will have to judge for themselves whether this scale of investment is worth it

Aresh Aghdam, Aecom

“But there are pressures to bring rail development forward. Principally cutting congestion, as we have seen in Dubai, but the region’s population growth and immigration require sustainable forms of transport.”

As it has in so many areas, Dubai has led the way in making this change, opening the first phase of the $7.6bn Dubai Metro project in September 2009.

A year on from the launch, the project has been a qualified success. Most importantly, the city has welcomed the project enthusiastically. As more stations have opened and train frequency has increased since the launch, more citizens have incorporated the metro into their daily commute. Passenger numbers have settled at a steady 80,000 a day.

Spurred by Dubai’s initiative, other Gulf states have rushed to launch their own urban rail projects. Abu Dhabi is developing its own metro scheme alongside a light rail network. In Saudi Arabia, a monorail is already under construction in Mecca, with a metro planned for the holy city. Similar developments are being considered for Riyadh, Jeddah and Medina.

Qatar, eyeing bids for the Olympic Games and football World Cup, is pumping $25bn over the next 15 years into an integrated rail network, comprising heavy and light rail systems.

Kuwait, although dogged by customary delays in parliament, is seeking to advance its own metro network, while Bahrain has prequalified 10 consultancies for the feasibility study on its $7.9bn rapid transport network. The first phase will include an 11-kilometre light rail line and a 13km tramway.

“When one country [in the Gulf] comes up with something, the others tend to jump on the bandwagon. A lot of people have been waiting to see if the Dubai metro succeeds in cutting congestion and encouraging investment. Now we are seeing developments across the region,” says Abbosh.

However, the Dubai metro has raised as many questions as it has answered during its first year of operation, demonstrating the potential of a mass transit system in a modern Arab city, but also its drawbacks.

The project is already some 80 per cent over its initial $4.4bn budget and much of the development is yet to open. A scheduled opening date for the Green line has been pushed back repeatedly. From an initial target of early 2010, Dubai’s Roads & Transport Authority (RTA) is now aiming for mid-2011 and sources close to the project are sceptical that this revised timetable will be met.

Dubai metro experience

The RTA indicated ahead of the metro’s launch that total costs had risen to around $7.6bn, but that the government expects to recover up to 50 per cent of its investment within five years. Sources close to the project say this estimation is optimistic at best.

Having pushed the workforce to get some of the line open for the appointed date of 9 September last year, progress then stalled dramatically. The opening was followed swiftly by the Dubai World debt crisis. Reports of metro contractors going unpaid and workers threatening to down tools did not help the image of the emirate’s struggling economy.

Dubai’s chequered experience has had a knock-on effect on other transport schemes around the Gulf. From seeing a metro or light rail scheme as little more than a must-have accessory to their plans for urban development, governments are proceeding with much greater caution.

The staggered progress of the varying projects around the region suggests that governments are now questioning the business case for these rail projects more seriously. After an initial rush to follow Dubai, several projects around the Gulf are being reconsidered to ensure value for money.

The global economic downturn has had an inevitable impact. Although Dubai’s debt-laden economic model was ripe to implode, even those nations with plentiful oil and gas revenues are proceeding with greater caution. The business case for major construction developments, including urban transport schemes, is being re-examined.

Scaled back rail plans in Abu Dhabi

In Abu Dhabi, a consortium comprising US-based Aecom, Germany’s DB International and US-based Parsons Brinckerhoff is conducting a feasibility study into the metro. However, the initial masterplan for the project is being scaled back to account for the slump in construction work across the UAE capital.

Like Dubai, which has suspended plans for a third, Purple Line, linking developments on the outskirts of the city into the metro system, Abu Dhabi has also recognised that it may be years before outlying construction projects in the capital see the light of day.

Contractors too are being far more cautious. The construction market will take some time to recover, and may never again reach the levels of the boom years up to 2007.

“What we saw from Dubai’s experience has made everyone very cautious. Everyone wants a transport system, but is the money available?” asks Aresh Aghdam, Middle East director for rail and transit at Aecom.

“Countries will have to judge for themselves whether this scale of investment is worth it. The need is still there but how far and how fast these projects will go is difficult to tell. From Yemen to Kuwait things are moving very slowly. All of them are moving forward though. It could be that by end of next year we see greater progress.”

Some are still pushing ahead. Saudi Arabia has geared its light rail and metro plans around the kingdom’s captive market in religious tourism. The business case for these projects is therefore easily justified. Consultants estimate that during the peak Hajj and Umrah seasons, the Mecca metro could carry up to 100,000 passengers an hour. This contrasts with projected passenger numbers of 25,000 passengers an hour at peak times on the Abu Dhabi metro.

Likewise, Qatar’s Olympian ambition has not been dented by the recession and its transport projects are moving steadily. Doha’s infrastructure must be overhauled if the country is to mount a credible bid for the sports tourism it craves. More fundamentally however, the Dubai metro has raised questions about what purpose these urban rail systems serve. Are they truly intended to improve the mobility of the population, providing a greener alternative to the car, or are they merely trophy projects, affectations to satisfy the modern image that governments around the region wish to forge for themselves?

The RTA itself seemed to have trouble deciding. At a MEED rail conference in 2008, officials from the regulator declared that ticket pricing on the metro would ensure the Red line was available to the middle classes and above.

A year on and the idea of a mass transit system for the few had been dumped.

Instead, the RTA unveiled a fare scheme it declared proudly was the cheapest in the region outside Tehran. Accordingly, Dubai’s large migrant workforce has adopted the metro with enthusiasm. The key, for countries still developing their light rail projects, will be to persuade locals to use the service as well.

Changing attitudes to public transport in the Gulf

“Attitudes are changing, people have become more attuned to the way public transport fits into the lifestyle of a city,” says Abbosh.

“We see this particularly in places like Saudi as the diaspora returns to the country [from the US and Europe]. Saudi has a large, educated middle class that understands public transport in terms of the quality of life of a city.” 

It will be years before these changes take root on a wider scale however. Building new urban rail projects alone will not be enough. The lure of cheap petrol and the widespread cultural aversion to sharing a carriage with strangers remains too strong.

Governments will have to make rail travel cheap and accept that these projects may never return a profit, but will benefit the city in the longer term.

“Each capital in the region has its own cultural quirks. Each has different issues to overcome to get people out of their cars and start taking the train or metro,” says Aghdam.

“Each government will have to find its own way to deal with this challenge, to come up with methods to force and incentivise people to leave their cars behind.”

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