Rail projects safe from oil price drop

19 January 2015

No sign of delays for existing rail and metro projects across the GCC although new project plans unlikely to materialise this year

Overall government transportation and infrastructure spending is set to continue amid falling oil prices and projected budget cuts across the GCC.

Regional director of French engineering group Egis, Adil Guissi, tells MEED he expects spending on transport and infrastructure projects to not be affected by oil prices.

While priorities will differ depending on the country, Guissi claims that GCC states that have already committed to projects will not slow down development. “I don’t see any cut or expected cut in the investment programme related to transportation in Saudi Arabia. Especially considering there is a big need for this due to a growing population. You cannot afford not having a sustainable public transportation system.”

In Saudi Arabia the Mecca Metro is being built to meet the anticipated growth in religious tourists and is one element of the wider transport programme for Mecca known as the Mecca Public Transport Programme (MPTP), which also includes a bus network. Contract awards for two civil building packages that will include the construction of 46 kilometres of track and 22 stations are expected to be announced in the first quarter of this year with locally led consurtium understood to be in poll positon. Other projects include the Riyadh Metro, which, according to Guissi, is on schedule.

On Qatar, Guissi says: “If you look at the progress on the Doha Metro – today most of the construction contracts have been awarded and many contractors have already started working. The programme is ongoing; there is no reason for it to stop. Especially as it is one of the main components of the 2022 Fifa World Cup commitment. It is part of the deal.” Service contracts for the Doha Metro have been tendered with a decision expected within a month.

Oman is another country working towards several transportation projects, such as the national railway network with the Oman Rail Company recently receiving technical bids for the first design and build package.

While most countries have started rail and metro projects, Guissi says it is difficult to predict what the priorities will be. “The slowdown and decrease in oil price has just happened, so honestly there will not be any impact on the 2015 budget. Maybe next year, if things continue.”

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