Financing biggest challenge for ME rail: survey

Middle East rail projects have been valued at $120bn.

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Financing is the biggest challenge to the Middle East’s rail projects, according to a survey of public and private sector senior figures for the industry.

Around 80% of the 680 rail authorities, government ministers, operators and contractors interviewed in an October report by Terrapinn, the corporate event organiser, stated that the problem of accessing capital was ‘very important’.

Ensuring rail safety, project management, awareness of technology and cross-border rail collaboration and strategy were the next four issues deemed the same level of importance, with partnership opportunities the least concerning.

Financing sources for the projects have been unclear, though in Saudi Arabia – which is developing two metro systems, and high-speed rail link between Makkah and Jeddah among other projects –it is expected that the projects will be entirely government funded.

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The survey also showed that Etihad Rail’s freight rail project is currently the most interesting in the Gulf. The national operator is building a 266km route from Ruwais and Habsham in Abu Dhabi to Shah, the first in a three phase, AED 40bn plan to develop a nationwide system that would also carry passengers and eventually link to the equivalent national rail projects around the Gulf.

The Middle East region has embarked on major rail plans to modernise transport and commerce, with projects worth an estimated $120bn. These include overground systems, light rail, metro, tram systems, high speed trains, monorail and freight.

The Gulf countries, particularly Saudi, Qatar and UAE, have been developing the design for national and inner city train lines with a few tenders and contracts forthcoming. Earlier this year, Etihad Rail handed a consultancy contract to a joint venture of Parsons and Aecom to project manage the freight phase of the development.

“The freight side is exciting because of the connectivity that it will provide to key transport facilities – ports, of course - and facilitate economic development,” Tom Topolski, heads of rail at Aecom, told CW in an interview last week.

The project has drawn contractors to the country, in particular Abdullah Al-Khodari & Sons, the Saudi construction firm. Jim Pollitt, business development manager, said the company would look to compete for the major contracts on the project.

Saudi Arabia has this year delivered the Makkah Light Rail system to transport citizens around the Holy City. It has also awarded construction contracts to its Haramain High Speed Rail system, a multi-billion dollar project that will connect Madinah and Makkah to Jeddah on the south coast.

Terrapinn’s survey found that rolling stock was the part of infrastructure most likely to be procured over the last year, followed by signalling equipment and rail infrastructure. Further, the survey found that identifying the relevant decision makers would be one of the key business-related challenges to working on the project.