By 2020, if plans go to schedule, the GCC railway will have been operational for three years, snaking through the six member states and transporting passengers and freight around the region. In each of the GCC’s capitals, people will travel on metro and tram systems built to reduce congestion and facilitate movement. Airports will bustle with passengers flying with national carriers on their growing network of routes. And the region’s ports will be major cargo hubs that link the Far East and Asia with Europe and the US.

I am optimistic for the future … Everyone has seen the Gulf region is not as badly affected and has decent growth

Daij bin Salman bin Daij al-Khalifa, General Organisation of Sea Ports

More than $220bn of transport infrastructure projects are planned or under way in the GCC. Include the wider Middle East and North Africa and that figure rises to $365bn of projects that will revolutionise the region’s transport infrastructure. The projects form an integral part of the visions of Middle East governments for creating modern, developed economies.

“There are massive projects here – Khalifa port, the Union Railway, all the development going on at Abu Dhabi International airport. All of these are about connecting to growth markets. It is not a slight change, it is a whole step change,” says Tony Douglas, chief executive officer at Abu Dhabi Ports Company.

Airport investment in the Middle East

The airports and aviation sector will see major growth by 2020. Many planned projects are already under way and will have been completed by the end of the decade.

The New Doha International airport in Qatar and new terminals at Muscat and Salalah airports in Oman are all due to open in the coming five years. The $680m construction of a new terminal and upgrade of facilities at Queen Alia International airport in Jordan, which is being built using a public-private partnership (PPP) approach, is due for completion in 2012.

By 2020, the GCC will also see its first airport developed using the PPP model. The expansion of Medina International airport in Saudi Arabia will set a precedent for the kingdom and the Gulf. The General Authority of Civil Aviation in Saudi Arabia has made no secret of its interest in developing more airports in the country using PPP, if the Medina project proves a success.

However, not all projects are running according to plan. In the UAE, the Al-Maktoum International airport at Dubai World Central (DWC) and the $6.8bn Midfield terminal at Abu Dhabi International airport have suffered setbacks.

Freight operations at Al-Maktoum International began in July 2010 and the passenger terminal is scheduled to open in March 2011, with an initial capacity of 9 million people a year. But final completion of all construction work in DWC is now likely to be after 2025, having been delayed due to the economic downturn. Dubai’s Department of Civil Aviation has yet to secure the required investment to finance the remaining elements of DWC.

It is also unclear exactly when Dubai’s national carrier Emirates will switch from its current location at Dubai International airport. With the new Terminal 3 at the existing airport now operational, the airline has said it will stay put for now. Emirates president Tim Clark said the airline has reviewed its plans and the switch to Al-Maktoum International has been delayed until sometime between 2022 and 2030.

In neighbouring Abu Dhabi, the Midfield terminal at its international airport was due to open in 2010. But it is severely behind schedule and authorities are hesitant to announce a completion date.

Across the Gulf, Iran’s plans to expand Imam Khomeini airport have yet to progress, due to a lack of funding. Likewise, Baghdad’s plans to upgrade its aviation infrastructure will depend on how much foreign investment it can attract.

Railway schemes in the Middle East

Although there are many airport projects under way in the region, it is the ambitious plans within the GCC rail sector that are grabbing the most attention. The huge scale of planning, construction and financing involved are huge and point to the dawn of a new industry in the Gulf.

The ultimate vision for the Gulf’s railways has been well-publicised – to have a line that links all the GCC states. Initially, just transporting freight, but with passenger operations to follow at a later date. As most states are inexperienced at developing railways, with the exception of Saudi Arabia, GCC governments will need to work closely together to ensure the technical aspects of their individual rail networks match.

The UAE’s own federal railway, being developed by Union Railway, is due to be operational by 2020, along with some of the associated projects, provided the tender process is conducted efficiently.

The GCC states will rely heavily on international expertise to provide consultancy and construction services for the railway schemes. In this respect, Qatar is in a good position having formed a joint venture with Germany’s Deutsche Bahn. With just 12 years to ready itself for staging the football World Cup, the first priority of Qatar’s $25bn rail plan will be to develop and build the Doha Metro.

North Africa is also investing heavily in rail, with particular interest in metro and tram networks. Provided construction continues at its current pace, Libya could boast a railway line running along its Mediterranean coast linking with Tunisia and Egypt by 2020.

Most of the region’s cities are destined to be served by metros within the next decade. Cities with projects planned or under way include Cairo, Qom, Casablanca, Rabat and Damascus, as well as the capital cities of the Gulf countries. Metro projects in Tehran, Tripoli, Damascus and Baghdad will depend on access to financing and to date, funding has yet to be secured.

Cargo links to the Middle East

The region’s ports will continue to be the most important transport sector for Middle East trade, facilitating the movement of cargo within the region, Asia and Europe, particularly in the northern Gulf. Massive port developments are well under way in the UAE, Kuwait, Qatar and Iraq.

The regional plan is for cargo to travel from the manufacturing giants of the Far East – China and Japan – into Khalifa port in the UAE or the nearby ports of the northern Gulf. From there, cargo will be loaded onto trains, which will then travel up through the Gulf and into Iraq and Turkey, before their onward journey into Europe. In future, ports and railways in the Middle East will operate together, cutting travel time for freight, as vessels no longer take the traditional route around the Arabian peninsula and up through Egypt’s Suez Canal. Intermodal transport will be a key development in the next decade.

Iraq has set aside $10bn for port development, including upgrades at the existing Umm Qasr port and plans to build a new port at Grand Faw in Basra province. If it can fund and develop the ports as planned, Iraq has the potential to become a formidable trade and trans-shipment hub, sitting as it does on the crossroads between Europe, the Middle East and Asia.

By 2020, the first phase of Khalifa port in the UAE will be operational and Union Railway will have embarked on its plan to build a spur of the UAE railway line that runs on to the offshore port itself.

Bahrain’s Khalifa bin Salman port, which opened in April 2009 after a 12-month delay, plans to expand its existing capacity. The $150m second phase of the port’s construction is under way and is scheduled for completion in 2013.

“I am optimistic for the future. This area has been neglected to some degree by foreign business and foreign investors in the past. However, with the economic crisis, everyone has seen the Gulf region is not as badly affected and has decent growth,” says Daij bin Salman bin Daij al-Khalifa, chairman of Bahrain’s General Organisation of Sea Ports.

“We will have the best of the best in terms of infrastructure, and companies around the world are looking at growth in this area. My only fear is overcapacity if all the investments in port infrastructure are realised at the same time.”

Infrastructure upgrade in the Middle East and North Africa

Governments in the GCC, Middle East and North Africa are ploughing unprecedented investment into developing transportation links in their respective countries.

While many of the projects look certain to be operational or at least to be well under way in the next decade, countries such as Iran and Iraq could struggle to attract the investment needed to ensure their plans become reality. Additionally, because the rail industry is new to the region, projects may hit delays and setbacks.

Nonetheless, the region’s aviation industry will continue to set the standard globally, with the most modern airports and the latest aircraft in service. Once the ports, rail and metro plans have been completed, be that by 2020 or beyond, the region will have a complete transportation system, boasting the latest technologies, that will be the envy of the world. This will place the Middle East right at the heart of global trade as it once was many hundreds of years ago.

By 2020, describing the Gulf as a transportation hub might not be as far-fetched as it seems to some today.