GCC eyes $109bn rail investment in next 10 years

GCC nations are planning to invest $109bn on rail projects in the next 10 years as officials look to solve traffic congestion issues, according to a new report by Kuwait Financial Centre (Markaz).

Road expansion projects will also continue with a total of $14.45bn planned to 2019 but $3.8bn worth of highways work has been cancelled due to the impact of the global economic crisis.

Of the cancelled projects, $3bn is from Saudi Arabia alone, Markaz said, adding that of the total $10.6bn due to be invested, Kuwait projects make up close to 40 percent.

In its latest infrastructure report focusing on the roads and railways sector in the GCC, Markaz also said investments were more likely to be made in rail links in a bid to decongest the region's roads.

The report said investments in railway projects would increase dramatically in the region over the next decade.

The supply-side analysis of expected investments indicates that the GCC region could see investments totalling $109bn - based on the announced projects in Saudi Arabia, UAE, Bahrain, Qatar, Kuwait and the pan GCC project.

Markaz said these projects were "crucial" to relieve the stress on the road system in the GCC region.

"Already some of the countries in GCC have put forward plans for alternative transport systems such as the Dubai metro and Saudi Arabia's various rail plans. We believe that this might result in relieving some amount of stress from the road network," the report added.

"Also, the pan GCC railways planned at an overall cost of $60bn will open lot of interesting opportunities for pan GCC travellers.

Currently, the only option to travel across GCC is either by road or by air," it said.

Saudi Arabia is currently the only GCC country to have a railway, although the network is still in the nascent stage.

Dubai has recently launched its metro system but the GCC region’s growing population is increasing demand for transport infrastructure, Markaz said.

"Consequently, congestion on roads has increased. Growing trade has also contributed to the congestion. This has spurred the governments of several GCC countries to look at inter- and intra-city railways as a viable option," its report added.

The majority of the countries in the GCC fared poorly when compared to developed nations on fatality rates on the roads, it said.

In the US and UK, the number of fatalities per 1,000 people is at 13.68 and 19.11 respectively, compared to 30.7 in Oman and 26.32 in Saudi Arabia.