First tenders for the Union Railways project will keep this growing sector rolling.
In the final week of June Abu Dhabi Freight and Passenger Committee opened its doors to prequalify for civil and track work for the first phase of the country-wide Union Railway project, among other contracts. Construction and engineering firms that have an expertise in railways are likely to have taken note, and the wider market might also have remarked that it is a mega project in the UAE that is going ahead.
The Union Railway project, also known as Shah Habshan, will eventually make the country seem a much smaller place. The state of the art network will enable the rapid transport of passengers and freight, opening up new trade corridors and journey opportunities by connecting the seven emirates. It is part of the AED304.4 billion the biggest emirate has earmarked for transport infrastructure investments.
The planned system will be managed under the auspices of Union Railway Company, which was set up last July. Its board - which comprises representatives from Abu Dhabi, Dubai and Sharjah including Dr Abdullah Belhaif Al Nuaimi of the Ministry of Public Works and Dr Nasser Saif Al Mansoori of the National Transport Authority - held its first meeting in October.
The railway will be a dual-track line stretching from the Ruwais oil and chemicals centre in Al Gharbia, the ‘western region' of Abu Dhabi, to Fujairah, the eastern-most emirate. It will also connect emiratis with Saudi Arabia via Ghweifat city and Oman via Al Ain in the east. The total investment for the project is estimated to be between AED25-30 billion, spread over five to seven years.
Such a project - just the start of the eventual plans for a GCC-wide railway system - is solid proof that the region's countries would not cut back their investment in railway projects, unlike other parts of the world.
Suppliers to railway projects, including those selling track design software such as Bentley Systems, are confident that this is the start of something big. "The whole railway system across the region is happening," believes Nader Raslan, regional sales director. "Possibly some parts of the region will lag behind in their parts of the [GCC-wide] railway, but I don't think the UAE will be waiting around. My gut feeling is that, even if it is not connected around the region, then it certainly will be within the country."
It leaves Bentley Systems, whose main software product for this sector is Bentley Rail, well placed. "Designers need to have the tools to capture all information for a proposed corridor and all the things that need to be taken into consideration. This can include the optimal route of the railway, and all considerations around what the objective of the route is, whether it's for freight or passengers and so on," explains Raslan, who says the National Transport Authority had, to a degree, endorsed Bentley Rail.
Plans for railway projects across the Gulf have been resilient in the last year. Egypt, for example, has a transport infrastructure stimulus plan aimed at setting up basic infrastructure in major cities beyond Cairo.
A report by Kuwait Financial Centre in January said GCC nations plan to invest a total of AED 400.2 billion on rail projects in the next 10 years as a solution to congestion. It added that investment in railway projects would increase dramatically in the region over the next decade.
Further research across the region emphasizes the importance of a country's transport infrastructure to its overall economic development.
In a paper, Transportation & Logistics 2030 Volume 2: Transport infrastructure - Engine or hand brake for global supply chains?
PricewaterhouseCoopers analysts wrote: "Transport infrastructure is a pre-requisite for an economy's success, alongside other competitive criteria... Indeed, an efficient transport infrastructure is a crucial prerequisite for local businesses and foreign investors to operate successfully. Poor transport infrastructure or low public investments increase costs for firms and decrease attractiveness for investors."
The high-speed Haramain rail project in Saudi Arabia is perhaps the stand out development. Its key component is a 450km track to connect Makkah with Madinah, via Jeddah and King Abdullah Economic City. This will also connect to the Landbridge and the North-South rail lines, Saudi's two other major rail projects, linking the country's population centers with industrial zones and the new economic cities.
In February this year the Saudi Railway Organisation agreed to extend its tender deadline for phase two from February to April, on the back of requests from the bidders. In all, five alliances led by China Railway Construction, Al Rajhi Group, Al Shoula Group, Saudi Bin Laden Group, and Al Badr Group submitted bids.
At the same time it released its tender documents for the construction of the stations. Consortia fronted by Al Safwah, Saudi Bin Laden Group, Saudi Oger, Kier Construction, Al Arrab Alliance, Azmeel Alliance, Nesma & Partners Contracting Co and Al Mabani General Contractors were in the running by the time of the submission deadline in May.
The Saudi Landbridge Project is an extension to an existing network by constructing a 950km railway line between Riyadh and Jeddah, allowing cargo to be transported directly to and from Jeddah, to Dammam and onwards to other GCC countries, as well as Iran.
The entire project, around SR18.7 billion in value, includes the construction of a 115km line between Dammam and Jubail, a connection to the new Riyadh-Jeddah and Dammam-Jubail lines, a 610km railway line between Riyadh and Hudaitha at the border post with Jordan. It will eventually deliver both passengers and freight, and allow an increase of cargo volumes by 19.5% to 30 million tonnes.
The North-South Railway, a US $2.8 billion project, will link bauxite and phosphorus mines in the north of the country with processing and export facilities at Ras Al Zour.
Last April, Saudi Binladin Group and the French defence firm Thales signed a SAR 2 billion contract to build signaling systems for a 1,800km section. The contract for the 600km section linking Riyadh with Al Zubairah in the north that includes a passenger line, is still up for grabs.
The development, part of an extraordinary investment spree by the Kingdom, might be well-timed: PricewaterhouseCoopers research found that 25% (1.1 million) of Saudi citizens in rural areas have no access to rural transport (by total population and its RAI index).
Chinese companies are likely to be in the frame for consideration. Last February, China Railway Construction Company was hired to develop a light rail system to link the holy sites of Makkah, Mina, Arafat and Muzdalifah. At an estimated cost of SR6.65 billion, the new network aims to alleviate congestion during Hajj, and will reduce journey times to just half an hour, compared with the five-hour car journey between Madinah and Makkah. CRCC is working on the project with the Al-Rajhi construction group and French firm Alstom.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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