Yearbook 2011: Transport outlook - Gulf states push on with transport schemes

09 December 2010

If everything goes to plan, the Gulf’s transport infrastructure could be transformed by 2012


24million: Passenger capacity at New Doha International airport by 2050

$5-7bn: Funding needed to expand Baghdad International airport

15per cent: Kizad’s (Khalifa Industrial Zone Abu Dhabi) contribution to the emirate’s non-oil gross domestic product by 2030

Source: MEED

The past year has been one of mixed fortunes for the transport projects sector. The global economic downturn has meant a number of schemes have remained stagnant, while other infrastructure plans to enhance land, sea and air travel have pushed the region into the limelight.

The impact of the economic downturn on the projects market has meant that the region’s governments have been given time to set the scene for 2011, with a flurry of contract awards expected to be announced over the next few months.

Air travel in the Gulf

In July 2010, the world watched as Al-Maktoum International airport in Dubai officially opened for cargo operations. In the same month, the emirate’s flagship airline spent $20.6bn on 62 new aircraft.

Elsewhere, significant airport infrastructure schemes continued. In September, tenders were submitted for the airport project in Medina, Saudi Arabia – the first airport in the GCC to be developed on a public-private partnership (PPP) basis. The Medina project is part of a wider $10.5bn plan to develop Saudi Arabia’s airports.

Top 10 transport projects by value ($bn)
New Doha International airportQatar14Under construction
Union RailwayUAE11Tender stage
Khalifa Industrial Zone Abu Dhabi (first phase)UAE7Under construction
Haramain high-speed railwaySaudi Arabia7Bids in
Jordan freight railwayJordan4Tender stage
Qatar-Bahrain CausewayQatar3On hold
Muscat International airportOman2Awarded
Medina International airportSaudi Arabia2Tender stage
Tehran Metro (six new lines)Irann/aOn hold
New Doha portQatarn/aBids in
n/a=not available. Source: MEED Projects

Airport projects were also developed in Qatar, Bahrain and Kuwait, and, towards the latter end of the year, construction contracts were awarded for the expansion of airports in Oman.

In October, a consortium of the US’ Bechtel, local firm Bahwan Engineering and Turkey’s Enka won the deal to build a new passenger terminal at Muscat International airport. In November, local company Galfar Engineering & Contracting and India’s Larsen & Toubro won the construction contract for the passenger terminal at Salalah International airport.

Plans for a GCC railway project have been the talk of the rail industry during the past year

Airport projects will continue to feature heavily in the transport landscape of 2011. The passenger terminal at Al-Maktoum International airport is due to open in March, with an initial capacity of 5 million passengers. It will be the biggest airport in the world when completed in 2030, with the capacity to handle 160 million passengers a year.

New Doha International airport in Qatar is also scheduled to start operations. The first phase of the $14bn airport will open in the second half of 2011, following a two-year delay. It includes two runways and a 140,000-square-metre airport terminal, with 24 aircraft gates and the capacity to handle 12 million passengers a year. A planned second phase will double the airport’s capacity to 24 million passengers by 2050.

Abu Dhabi Airports Company (Adac) remains tight-lipped on the delivery date of its $6.8bn midfield terminal. In October, MEED revealed that the terminal will be finished five years after the construction tenders are issued, extricating Adac from providing an actual completion date for the project. The midfield terminal has been severely delayed and was originally due to be completed in 2010.

The Gulf states have their work cut out if they are to complete their [railway] projects on schedule

In North Africa, Libya is scheduled to start construction on its three main airport projects at Tripoli, Benghazi and Sebha, following a lengthy delay due to contract changes. Egypt is also scheduled to award the construction contract for the renovation of terminal two at Cairo International airport in 2011. Bids are due on 20 December 2010.

Iran’s plans to expand Imam Khomeini International airport just outside Tehran will only go ahead in 2011 if funding is secured. With no signs that this will happen any time soon, significant progress in the huge expansion project is likely to be minimal.

Similarly, plans to expand Baghdad International airport have slowed. Before the expansion can go ahead, Iraq first needs to attract between $5-7bn to fund the project. Iraq’s Civil Aviation Authority had hoped to invite firms to bid for the design of the expansion by the end of 2010. Until this happens, no definite investment can be received.

On a positive note, construction of Iraq’s $140m Salahaddin International airport is under way. US-based contractor Leedco Engineers is designing and planning the new airport.

Rail network in the GCC

Plans for a GCC railway project have been the talk of the rail industry during the past year. The scheme is valued at $25bn by MEED Projects and is slated for completion in 2017.

In 2010, tenders for the first phase of the UAE’s section, which will run between Shah, Habshan and Ruwais, were put out for material supply and rolling stock, while awards were made for preliminary engineering works on the first phase, as well as the independent safety assessment deal.

The railway will be used to transport granulated sulphur. Plans have now been finalised that will see the railway branch off to serve Khalifa Industrial Zone Abu Dhabi (Kizad), which also includes Khalifa port.

Saudi Arabia has also made significant progress with its section of the project during the past year. The first phase of the North-South minerals line, which forms part of the GCC network, will open in the first quarter of 2011.

Bids for the passenger stations of the North-South railway will also be invited in the first quarter of next year. The construction contracts for the track and stations of the $7bn Haramain high-speed railway between Mecca and Medina should be revealed as well.

The other GCC member states are also busy planning their own railway lines, which will eventually link to become the GCC railway, although they remain behind the UAE and Saudi Arabia in terms of progress.

A question mark still hangs over how the entire railway project will be financed. Between the six states, they are planning a GCC-wide rail network that will carry freight and, eventually, passengers, six metros, light rail and tram networks.

A financial adviser has now been appointed, but with a distinct lack of experience and the scale of the projects planned, the Gulf states have their work cut out if they are to complete their projects on schedule.

In Jordan, expressions of interest for the country’s freight railway were due to be invited in October 2010. This has now been delayed.

Metro projects across the region have been relatively slow. A financing strategy for the Damascus metro is yet to be announced, as is one for the Baghdad metro.

Cairo’s metro plans look to be progressing well. Development is currently under way on line 3. Tender documents were expected to be issued in December, following a two-month delay. A construction award is likely in 2011.

In Iran, the outlook is not as positive. Tehran had big plans to expand its existing metro system, but a lack of available funds means that these plans are on hold indefinitely.

Qatar’s metro project is moving slower than expected. However, Qatar Railways Development Company (QRDC) – the joint venture formed by Qatari Diar and Germany’s Deutsche Bahn – is now in the final stages of developing the rail specifications to hand over to the market and has also started the registration of companies to put on the vendor list.

One of the country’s major road projects has a bleaker outlook. The Qatar-Bahrain Causeway was put on hold in the summer of 2010, having already experienced a number of delays. While the authorities say the project will be resumed as soon as possible, the lack of any progress in the past indicates that this project will remain on paper.

Shipping lines

Ports will work alongside the regional railways to efficiently transport great quantities of freight and containers.

The main port developments in the region are well under way. Khalifa Industrial Port – the first port in the region to be directly served by a railway line – is about 63 per cent complete. Kizad is being developed at roughly the same rate.

The first phases of both projects will open in the fourth quarter of 2012.

Operations at the industrial zone, including the port, are expected to contribute 15 per cent of Abu Dhabi’s non-oil gross domestic product by 2030.

New Doha port in Qatar is progressing well, although the excavation works contract is still to be awarded.

In Iraq, the design for the Grand Faw port on the southern coast began early in 2010 and should be completed by the end of 2011. Construction tenders should also be finalised, with an award to follow in 2012.

Government-backed projects are set to dominate the transport sector in 2011. Provided that contracts are awarded and signed as planned and construction on the major projects begins, the region’s travel infrastructure landscape could undergo a transformation by 2012.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications