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Fri 16 Jan 2009 04:00 AM

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Transport projects stall in credit pinch

Frost & Sullivan's Jose Paul says GCC transport schemes may be delayed but not cancelled.

From metro systems to railway networks, the Middle East is dotted with plans for ambitious transport schemes. With the economic downturn halting projects across the region, Jose Paul, consulting manager at global research and consultancy firm Frost & Sullivan, predicts which contracts will prove robust enough to survive the liquidity freeze.

Several metro projects are either underway or planned in the region. What do you consider to be the most significant of these schemes?

One of the key developments in this region is that almost all the big cities like Dubai, Abu Dhabi, Riyadh, Jeddah and Amman, and built-up areas in Kuwait and Bahrain, are looking at developing a metro or monorail project. These are going to be focused on city areas to decongest traffic and reduce the use of personal transport.

People here have been complaining for a long time that there are no public transport systems in their countries and governments are realising that the number of personal vehicles has to be reduced in the near future.

To what extent will the global economic slowdown stall these projects?

I don't think the metro projects will be cancelled but delayed, definitely. I would specifically say that some of the projects that are still to start like in Bahrain, Kuwait, Saudi Arabia - and even Amman for that matter - might be delayed because of a lack of funds.

These governments might wait and watch for six or seven months until they start on these projects; they'll want to see where the market is going and where the economy is heading in the next 18 months to two years time, and perhaps wait for a couple of financial quarters to move things further.

But at the same time, Abu Dhabi is also talking about a metro which will start in 2009 and I don't think that project will get delayed.

's Roads and Transport Authority (RTA) has said Dubai Metro will reduce traffic volumes on the roads by 17 percent. Is this a realistic target?

I don't think 17 or 18 percent is realistic initially because there is a lack of clarity about what the RTA will provide as a feeder system. For example, if someone gets the metro from Bur Dubai to Internet City, how do they move from the station to their office in Internet City?

There are reports there will be shuttle buses to transport people to and from stations and if that happens, then there would definitely be about a 10 to 15 percent drop in traffic.

But you can't look at the metro project individually. Currently, there are around 1000 buses [in Dubai] and the RTA is looking at more than doubling that number in a year.

If you look at the taxi system in Dubai there are around 3200 taxis, which completed about 23 million trips in 2007 - and that figure is expected to go up by about 3 million in 2008. This entire system of increased buses and taxis, and the metro and tram networks will reduce traffic significantly by around 10 to 15 percent at least.

Do you foresee delays to any of the proposed railway projects in the region?

In the UAE the inter-emirate project, which is a 800km railway line connecting all the emirates, will happen - but not until 2010 or 2011, when you'll see visible movement towards building up the network, because of finance issues. But I don't think this will be a major challenge.

The GCC railway network linking all the Gulf states will also only start in early 2010. There are three different Saudi railway projects: one is the Riyadh to Jeddah project, the Dammam to Jubail line, and then the north to south line; and these networks will be both passenger and goods networks.

The ones that are of most economic significance are the first two networks and I think those will go ahead, but the third might take some time before work starts.

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