There are no shortage of public-private partnership (PPP) models to support the construction of public transport infrastructure in the Middle East region, according to Laurence Battle, chairwoman and CEO of Frances RATP Dev.
Battle, a former PwC executive, says even greenfield rail projects can be successfully implemented on a PPP basis as long as there is a strong business case that proves long-term investments can be recovered. If the client and consultants can prove a projects bankability, the banks will be on board . They understand that higher risks mean higher returns, Battle tells MEED.
The executive says the existence of a robust regulatory framework supporting PPP is important but that projects across the region in general do not have to wait for these new laws before they are released to the market.
Most private sector companies can adapt to the vision, framework and economic environment that exists within a country or a local authority, she said. We are engaged in 15 to 20 metro operations globally and weve used 15 different frameworks that work with both build, design and operate (BDO) and several variations of PPP.
Dynamic transport sector
The executive said she is impressed with the dynamism of the transport sector in the Middle East and North Africa region. It took Paris 100 years to build 16 metro lines, Riyadh will build six metro lines within six years, Battle says.
The success of the Dubai Metro, despite broad skepticism when it was planned, proves the level of economic and social contribution that a public transport network can make, according to Battle.
If you look at cities like Mumbai and to a lesser extent perhaps at some cities in the Mena region, giving back two hours of daily commute time to residents by building an efficient and integrated public transport network will significantly improve their quality of life, she explains.
According to Battle, innovation and new technologies evolving around transport systems can help build the business case for potential PPP projects in the region.
If technologies like big data are utilised to increase frequency of train journeys depending on the volume and flow of passengers on the platform if we are able to adjust service according to changes in demand then we are better able to support our clients in maximising investments on these assets.
More than $500bn-worth of transport projects are planned and yet to be awarded across the Middle East region, according to data from regional projects tracker MEED Projects. These include roads, rail ports and airports.
Saudi Arabia, the largest market in the region, has recently announced that all its major urban rail projects will be procured as a PPP. Even the GCC Railway is expected to utilise private finance, according to Abdul Latif bin Rashid al-Zayani, GCC secretary general.
RATP Dev and Saudi Arabias Saptco won the $1.77bn, 10-year contract in 2014 to implement, operate and maintain Riyadhs bus network, which comprises over 100 bus lines and three depots. It also operates four transport systems in Algeria and the Casa Tramway in Morocco.
The company is competing for the contracts to operate and maintain the Doha Metro in Qatar as well as the Riyadh Metro along with mostly European and Asian competitors such as Serco (UK), Arriva (UK), DB International (Germany), Transdev (France), Korail (South Korea), Hitachi/Ansaldo (Japan) and Mitsubishi Heavy Industries (Japan).
In 2015, the company formed a joint venture with the UAEs Lakhraim Business Group. The joint venture is focused on capturing key business as the UAE capital implements its public transport masterplan.