Kuwait’s reputation for prevarication and bureaucratic wrangling is well known. Projects in Kuwait appear to take years longer to progress from initial concept to tender stage than elsewhere in the region.
Yet, since the beginning of 2010, some movement has been seen on two of its major transport projects, the GCC railway and Kuwait City Metro. Kuwait Municipality has approved plans for the country’s section of the $25bn GCC regional railway network. Local media reports say that the Transport Ministry is to hold meetings with other ministries before issuing the first tenders in the coming months.
Meanwhile, proposals for a contract to advise the government on the $7bn metro scheme are due to be submitted next month.
The state’s Partnerships Technical Bureau has drawn up a shortlist of law firms, banks and engineering consultants from a list of 45 that expressed an interest in the consultancy deal in November 2009.
Kuwait is a slow place in which to do work. When [the metro project] will go forward is anybody’s guess
Source close to the scheme
Proposals outlining each consortium’s technical, legal and financial advisory experiences are due to be submitted by 20 April. About seven are expected to bid. The Partnerships Technical Bureau says it expects to name a winner by June this year and describes the level of interest shown in the project so far as “encouraging”.
The winning bidder will act as the transaction adviser, assisting the bureau to structure, procure and negotiate the deal. This includes validating previous feasibility studies, conducting due diligence on the project and overseeing the tendering process.
The metro scheme involves the construction of a 171-kilometre-long light rail network with four lines across Kuwait City, and will include stations at key points such as the Great Mosque, the planned central railway station and the airport. Some 60km of the lines will run underground.
Under the proposals, a private developer will design, build, finance, operate and maintain the metro network. The developer will own 40 per cent of the project company. The government will own 10 per cent and the remaining 50 per cent will be offered for sale in an initial public offering.
That, at least, is the plan. But, despite the undoubted intent from all concerned to talk up the project and to instil an impression of progress, sources close to the scheme raise questions over the clarity of the proposals and some remain sceptical that the metro will ever materialise in Kuwait.
“There is a very strong commitment to take the metro project forward, we feel,” says one source. “Money is not a problem, as Kuwait is a rich country and the private sector is getting involved. But Kuwait is a slow place in which to do work. When it will go forward is anybody’s guess.
“All the indications are good, but there are lots of unknown factors. Depending on who you speak to, you hear contrasting views. Something is going ahead, something has stalled; it is never clear.”
In particular, the sceptics point out that there is little incentive for Kuwaitis to leave their cars at home and take a train.
“I think it’s a joke. It won’t ever be viable,” says another source in Kuwait City with links to the project.
“We are living in one of the hottest countries in the world. Are people really going to walk even 200 metres to a metro station in the full summer heat? I don’t think so. Wouldn’t they rather still drive? If they can find a parking space and it is cheap, why not? We are so spoilt here; petrol is cheap and parking is almost free. It is going to be a tough task to persuade people to give up their cars.”
Yet, over in the UAE, Dubai launched the first line on its own $7.6bn metro system in September 2009. Similar reservations about persuading people onto public transport were expressed there, but it was still built – so why could Kuwait not achieve the same result?
The source says: “It is hotter in Kuwait in the summer than in Dubai and petrol is half the price. I have lived here a long time and I don’t see it moving ahead at all. I cannot see it being feasible from the passengers’ perspective.”
In fact work has already stalled on the scheme for the past 18 months as the Kuwaiti government undertook a study of the country’s transport requirements. A consortium led by the UK’s Atkins and including the US’ Parsons Brinckerhoff and the local Gulf Consult was chosen by Kuwait Municipality to draw up the countrywide transport masterplan.
The metro is being developed by the Kuwait Overland Transport Union (Kotu). A feasibility study of the project was completed in May 2008 by Spanish transport consultant Ingenieria & Consultoria del Transporte and local project management firm Kuwait United Development. Kotu originally said the plan would be presented to the government for approval before the end of 2008, together with its proposal for Kuwait’s section of the proposed GCC railway.
Kuwait’s metro system is intended to integrate with the even more delayed GCC railway network, a 1,500km system that will link all six Gulf states.
Starting from the north at Kuwait’s border with Iraq, its proposed route passes through Saudi Arabia and down the Gulf coast and on to the Omani port of Salalah on the southern tip of the Arabian Peninsula.
Further lines will link it to Bahrain, Qatar and the UAE. It is scheduled to be up and running by 2017.
A project of this scale inevitably faces major challenges. In addition to being politically complex, as a result of the need to co-ordinate rail projects in six countries, the costs involved will be high, due to the long distances involved and the difficult operating conditions caused by the hot climate.
Issues such as power supplies and cross-border operability also need to be addressed.
Meanwhile, the viability of the scheme remains open to question due to the relatively low cost of alternative modes of transport – namely passenger vehicles and trucks – as fuel prices are so low.
With the exception of Saudi Arabia, the dearth of regulation in the GCC is a further concern. Since the other five countries do not yet have railways, they also do not have rail regulatory authorities in place.
Furthermore, the global economic recession has made obtaining project finance more difficult and more expensive. In Saudi Arabia, the Landbridge rail project struggled for more than six years to find private finance. The Saudi government finally decided to fund the project itself.
But there is no reason to conclude that these factors prevent the execution of the scheme. A GCC-wide transport network would clearly benefit the region, providing improved links for trade and passengers alike.
A source close to the project says: “It looks like the project is going to happen, but there needs to be strong political agreement.
“There are currently a lot of obstacles. The next step needs to be the setting up of an advisory board to reconcile the different interests of the different countries involved.”
A GCC-wide transport network will clearly benefit the region, providing improved links for trade
However, the same source says there is confidence that Kuwait’s portion of the line will go ahead. From a construction perspective, the project is made easier because there are no existing railways, no infrastructure to overcome or to replace. It is in effect a blank canvas for contractors.
Outside Kuwait, a number of other metro schemes are being mooted. In Dubai the 52-km-long, four-line metro is designed to link Dubai International airport and the new Al-Maktoum International airport.
While the metro’s Red Line has already opened, the progress of the remaining Green and Purple Lines is less clear. MEED reported in January 2009 that bidding for the Purple Line could be postponed for a further 12 months as the Roads & Transport Authority studies the emirate’s rail requirements.
In Abu Dhabi, the Department of Transport is currently assessing bids for the consultancy contract on the emirate’s multi-billion dollar metro project.
The department plans to build a metro system with two circular lines. The first will serve Abu Dhabi International airport, Al-Raha Beach, Abu Dhabi Island, Saadiyat Island and Yas Island. The second will connect Abu Dhabi Island, Mussafah and Mohammed bin Zayed City.
A consortium comprising US-based Aecom, Germany’s DB International and US-based Parsons Brinckerhoff has emerged as the frontrunner for the consultancy contract.
If awarded the contract, the consortium will carry out a feasibility study and outline the design for the metro, followed by a detailed design of the network and its stations.
Qatar’s government is also planning to build a metro network to serve central Doha, as well as a high-speed railway line running from Mesaieed through Doha and Ras Laffan, then on to Bahrain via the planned Qatar-Bahrain causeway.
In addition, local developer Qatari Diar Real Estate Investment Company intends to tender a contract to supply and build a light-rail network serving Lusail, a new town under construction north of Doha.