Qatar's oil and gas wealth puts it in a strong position to upgrade its ageing infrastructure and to lay the foundations for a hi-tech, 21st century transport network. The country is home to four of the most ambitious transport megaprojects under way in the Gulf today, and Qatar's National Vision 2030, which lays out the country's economic and social development goals, calls for a "world class infrastructural backbone" to support the creation of a diversified economy that will reduce its dependence on revenue from hydrocarbons.

The proposed spend on upgrading air, sea, rail and road links by 2014 tops $25bn (see table) - and that estimate could be conservative, given that the projects include the country's first rail network and metro system.

Qatar is already a leading hub for aviation, the expansion of national carrier Qatar Airways having turned Doha International airport (DIA) into a hub for passengers and cargo travelling between Australasia and Europe, the Gulf and the wider Middle East and Africa. Qatar Airways is investing $40bn in expanding its fleet from 65 to 110 aircraft between 2009-13, with air freight growth expected to exceed 9 per cent a year to 2011. World air freight growth is estimated at 5.8 per cent each year over the same period.

False starts

New Doha International airport (NDIA) will handle an initial 24 million passengers a year when its opens in 2011, to match Qatar Airways' expansion. The US' Bechtel is consultant to the project, overseeing 32 smaller contracts and reporting to the NDIA steering committee. Project costs have soared from an initial $5bn to the current $11bn.

"It was to open in 2009 with capacity for 12 million passengers," says a Qatar Airways spokesman. "But, as Qatar Airways exceeded passenger volumes of 12 million this year, it was decided to combine phases one and two to open with capacity of 24 million in 2011, and more than double this to 50 million after 2015."

Meanwhile, the old DIA will increase its passenger capacity from 4 million to 7.2 million a year, pending completion of NDIA. In May, Qatar Airways announced that it would invest $1bn in infrastructure at DIA to cope with projected growth to 2012.

The second-largest transport project in the country is New Doha Port. Qatar has long needed to expand or replace the ageing Port of Doha, as its shallow draft makes it off-limits to all but the smallest feeder vessels. A 15 per cent growth in cargo last year is taking the port dangerously close to its 400,000 20-foot equivalent units (TEUs) capacity.

Doha now plans to build a container mega-hub outside the city limits, near the industrial area of Mesaieed. New Doha Port will open in 2014 with initial capacity of 2 million 20-foot equivalent units (TEUs). But the overall costs of the project are not clear, with estimates falling between $4.5bn and $7bn. Building on a greenfield site will offer the scope to expand capacity to 6 million TEUs by 2030. The project will have four container berths, with the 18-metre draft enabling the port to handle the largest modern container ships. There will also be five general cargo berths, a roll-on roll-off ship and livestock berth, administration buildings and storage.

Growth forecasts

Australia's WorleyParsons' local Qatar office and the Netherlands' Royal Haskoning are design consultants to the project. Construction is set to start next year. "Qatar is investing heavily in infrastructure to support growing domestic cargo demand, driven by growth in gas exports and ventures such as Qatalum's aluminium smelter," says Malcolm Harris, general manager of WorleyParsons Qatar.

"And, although all the Gulf economies are investing heavily in infrastructure, the country's determination to capitalise on its gas exports will generate enough cargo to keep it busy," says Harris. "Then, it will be a question of how quickly to expand and how to price any capacity that remains."

Mesaieed is the focus for much of Qatar's proposed industrial development. Qatar Petroleum is building two container berths at the Port of Mesaieed to relieve pressure on the existing Port of Doha. The two berths will handle 400,000 TEUs by 2010, with scope to expand to 1 million TEUs by 2020.

Qatar has also invested $1.5bn in turning its oil and gas terminals at Ras Laffan into the world's largest liquefied natural gas (LNG) export port, its four berths handling more than 30 million tonnes a year (t/y) of LNG. Next year, a dry dock will open at the port, offering ship repair and maintenance services to very large crude carriers and other specialist vessels.

The $450m dry dock is a joint venture between the local Qatar Gas Transport (Nakilat) and Singapore's Keppel Offshore & Marine. It will repair and offer maintenance services to the Qatari-owned fleet that currently uses ship repair yards in Bahrain, Dubai and Singapore, as well as to foreign-owned ships. Keppel will manage the dry dock.

Meanwhile, work begins later this year on one of the most ambitious feats of engineering ever undertaken in Qatar. At 45 kilometres long, the $2.7bn Friendship Causeway to Bahrain will be the longest causeway in the world. It is being developed by consortium partners Qatari Diar and Germany's Hochtief, with the UK's Halcrow Group as consultant. Completion is scheduled for 2013.

As well as a road, the Friendship Causeway will carry a high-speed rail link between Doha and Manama - part of Qatar's first foray into railway development and of the proposed GCC freight and passenger rail network across the Arabian Peninsula.

The final megaproject is the multi-billion-dollar Qatar Railways Project. In August last year, rail giant Deutsche Bahn won the $1.1bn consultancy deal for the project. Qatari Diar will build an east coast freight and passenger line linking industrial Ras Laffan, NDIA, inner-city Doha and the industrial and commercial hub of Mesaieed. A second spur will link Doha via the Friendship Causeway to Bahrain and onward to Saudi Arabia and the rest of the GCC. In addition, 140km light rail network will connect West Bay, Lusail and Education City and a six-line metro system will improve transport for visitors to Doha.

Regional rivals

While Qatar's megaprojects to upgrade its infrastructure are well under way, there are still questions about whether it will be able to compete with established transport hubs such as Bahrain and the UAE.

Bahrain is in the process of establishing the Bahrain Logistics Zone, focusing on re-export and logistics activities in the northern Gulf. With Bahrain's new port opening for business in May, the zone has a hi-tech sea port with a capacity of 1.5 million TEUs. In the UAE, Dubai Logistics City is being built as part of the Dubai World Central area that will link the new airport, Jebel Ali port and major highways. Qatar, in contrast, does not have a dedicated logistics zone planned. In terms of size, NDIA will rival Dubai's new $10bn Al-Maktoum International airport, opening in 2010, and Abu Dhabi's $6.8bn Midfield Terminal, due to open in 2012, but the question of whether the Arabian Gulf can support three aviation hubs is frequently raised by transport specialists.

Dheya Towfiqi, an aviation consultant at Bahrain-based DTEB, says it can. "Plans for airport expansion are going ahead in the belief that the economic downturn will be temporary," says Towfiqi. "Airport expansion is a long-term process and it would be wrong to stop now. The [long-term] forecast is for freight and passenger volumes to pick up."

Qatar must work as closely as possible with potential port, airport and rail users to tailor supply to demand so that capital-intensive infrastructure projects will ultimately become cost efficient too.

As neighbouring states upgrade their port, airport and rail infrastructure, Qatar must keep its costs down to be competitive. "Qatar cannot afford to throw money at over-expanded capacity," says one UAE-based transport consultant. "That can only raise the final operating costs, which will then be passed on to customers."

However, the downside of cost-consciousness is that it could lead to delays. Sources close to New Doha Port report that the steering committee is reviewing the quotes it has received, with a view to addressing costs - but that this may not be possible, and could lead to delays.

"The cost estimates were put together some time ago," says the transport consultant. "With construction prices dropping, the authorities are looking at them again. But specialist work - dredging and construction of quay walls and berths - does not come cheap. And, the less specialist work will come at the end of the project, when prices will have picked up again."

Another issue is the need to improve decision-making structures. Qatar's General Authority for Ports & Customs oversees the country's commercial ports. Now, the authority may be split into two functions: ports and customs. New Doha Port will be part of the Business & Trade Ministry, a standalone authority with its own budget and chief executive. Qatar's oil and gas terminals and naval operations will be exempt from the reshuffle. The customs authority is likely to become part of the Finance & Economy Ministry.

The $25.3bn being spent on Qatar's four largest infrastructure projects is a sign of the seriousness with which Doha is addressing the need to upgrade its facilities. Observers hope that the proposed reshuffle will move Qatar towards the joined-up thinking needed to maximise its investment in transport infrastructure and to have the world-class transport and logistics hub that its national vision calls for.