Rail plan will advance the GCC vision

21 October 2009

The GCC railway line is targeted to open in 2017. It will do more for regional convergence than monetary union.

More than 200 rail executives attending MEED’s annual rail projects conference in Abu Dhabi in mid October – a sign of growing international confidence that plans for a railway connecting the GCC are about to be turned into reality.

They were rewarded with an opening keynote address by Hussain al-Nowais, chairman of the UAE’s Union Railway Company, who provided a complete update about the UAE’s own rail network.

The prize is enormous. The Union Railway Company’s plans are only part of a regional rail building programme that will involve investment of at least $50bn by 2030. It will make the GCC the world’s most exciting rail market.

The merits of a GCC railway have been debated for more than a decade. But the final doubts were dispelled by a feasibility study completed earlier this year that showed it could generate an economic return of 13 per cent annually. The project may not be completed in one go and won’t all be opened at the same time, but it’s coming and could be operating in 2017.

Railways are advancing to the top of the GCC development agenda. There are several reasons why. The first is the prospect of intolerable congestion on GCC roads as the region continues to expand steadily. The second is the recognition that railways are an efficient and environmentally-sustainable way of moving people and freight over long distances.

The GCC also wants to increase capital expenditure in response to the credit crunch and international calls for oil-exporting Gulf countries to spend more of their savings. The governments of the region have decided it’s time to put more GCC savings to work in essential physical infrastructure.

The project also demonstrates that they are serious about economic union, despite disagreements about the implementation of their currency union plans. To keep convergence on track, the GCC is now focusing on tangible objectives rather than contentious, abstract ones.

To demolish the barriers dividing the Arab states of the Middle East that have held back their development for more than half a century, they need to talk less and do more. And nothing better can be done than building the Middle East’s largest and most ambitious cross-border transport link.

The plan calls for a railway 2,100 kilometres long. It will connect all six GCC states. The line will cross three deserts and could span two stretches of water. It’s likely to cost at least $15bn.

The feasibility study suggests two options for the route it should take along the east coast of the Arabian peninsula: one from Saudi Arabia to Bahrain and on to Qatar, and another with just a spur line from Saudi Arabia to Qatar that bypasses Bahrain. The cost of taking the line across two causeways to connect Bahrain is high. But the benefits the project will deliver to Bahrain are huge. The value of its contribution to GCC convergence is beyond question.

The project has been given an enormous boost by the efforts of the individual governments. The UAE has announced its railway vision. Qatar is finalising plans for the Bahrain-Qatar causeway and linking Ras Laffan in the north with Messaieed and Salwa in the south. Oman is working on a link from its border with the UAE at Al-Ain to Sohar and from there to Barka, north of Muscat. The outline of a Bahrain rail masterplan was released in October. And, on 20 October, the Kuwait government approved a capital spending plan that includes investment in railways.

Saudi Arabia, meanwhile, is pushing ahead with its own rail programme, the largest in the GCC. Work is proceeding on the mineral railway line that will run from the north of the kingdom to the Gulf coast at Ras al-Zour. Bids have been called for the next contracts in the 444-kilometre high-speed Haramain rail link connecting Mecca and Medina. The Saudi government will soon unveil how it plans build the Saudi Landbridge, which will run from the Red Sea to the Gulf.

The planned investment in GCC freight and passenger railways will be matched in urban rail systems. The Dubai Metro opened in September. Abu Dhabi is about to award a detailed design contract for its own urban rail network. Similar plans are being devised for most major GCC cities.

Everyone in the region stands to gain from this rail revolution. It will do more good for the region’s long-term prospects than currency union ever could.

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