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Analysis

Standing at the Brink of a Rail Revolution

Until recently, the $140 billion Gulf Railway project has only been a historic vision in-the-making, stirring much excitement for its potential to revolutionise trade and communications within the seven-state customs union. But as the wait for a concrete blueprint outlining its execution continues, it is the next few years that will ultimately decide how close this vision is to truly becoming reality.

While the GCC may be a century or two late in hopping onto the bandwagon, it isn’t entirely foreign to the notion of rail transport. In fact, the presence of locomotives in the Gulf, though having eluded the majority of its coming-of-age urban capitals, dates back as far as back as the 20th century when the then ruling Ottoman Empire established the celebrated Hejaz Rail Link to transport pilgrims from Damascus in Syria to Makkah in Saudi Arabia for the annual holy pilgrimage of Hajj. Since its destruction in World War I, however, there remains only a single surviving relic of the region’s limited foray into railways- an independent cargo line that connects the Saudi capital of Riyadh to the coastal city, Dammam, in the Persian Gulf.

Despite its partial coverage of the eastern city of Hardh, the prized rail link has no path through Jeddah, Tabuk, and Rabigh, thus having, for long, created a pressing need to set up a complementary line that would aid the shipment of goods, and growth of industry in general, along one of the most significant commercial belts in the Kingdom.

Even so, the factors that have driven the prospect of a national, and in due course, regional-level rail network across the GCC from a mere idea to a tangible possibility are as many and diverse as the number of nations in the council itself, not the least of which is the vast economic benefits it is bound to offer.

Besides being about 30% cheaper, rail transport is also considered to be a more eco-friendly alternative, utilizing 60-80% less energy per kilometer than road transport, according to a recent statistical analysis by global agency Frost & Sullivan. It also produces 80% less carbon dioxide emissions and 9 times less noise damage, with one freight train carrying about 1,000 tonnes of cargo replacing the use of 50 trucks by road.

Welcoming a new era of mass transit

Despite these distinct advantages, the Gulf had a longer road to conquer before becoming positively rail-ready. For one, rail transport had been widely viewed as a superfluous ‘accessory’ rather than an absolute necessity to economic progress in the Gulf for the better part of the past century. The inherent rationale behind this was a complete lack of prior infrastructure or expertise in the field on which to build upon, coupled with the difficulty of establishing one given the region’s troubling geographical circumstances, such as shifting sand dunes and volatile ground surfaces in the harsh desert environment.

The onset of the hydrocarbons industry did not help matters either as the availability of cheap, subsidized fuel, even when oil prices began to soar in other parts of the world, propelled travel by road as the primary means of transport in the region. The relatively small geographical size of the Gulf nations also did not set a strong precedent for high-speed rail travel and the hefty investments its establishment would entail, producing promising returns for its operators only in the long run.

The turning point arguably arrived with the dawn of the 21st century, when the GCC states began to reap the advantages, and also face the challenges of the extensive pace of urbanization they had embraced in the preceding decade, such as rampant population growth and escalating congestion on existing road and infrastructural networks. Freight and cargo conveyance also emerged as a priority as several countries expand their mining and raw material industries, additionally providing a long-awaited boost to inter-GCC trade which currently stands at less than 10% of total business within the region. The search for alternative modes of surface transport inevitably began with rail travel, though the most decisive push for a full-fledged regional network only arrived with the inauguration of the landmark Dubai Metro in the UAE and its extensive subsequent success, alleviating all fears about the feasibility of operating such a service for travel within and across the GCC.

The pace of the Dubai Metro’s development, which was concluded in 2009, set a new precedent for the realization of the Gulf Railway, a target completion date for which has been set in 2017. Plans for national-level rail networks, which are a crucial prelude to the foundation of a region-wide link, were soon announced, including the $11 billion Union Railway crossing all seven emirates in the UAE, as well as nine individual rail links in Saudi Arabia, besides an additional, much-anticipated line connecting the Kingdom to Bahrain.

Other GCC countries have been surprisingly quick to catch up, such as Oman which has put in place a massive $10 billion plan to establish far-reaching and accessible rail connectivity throughout the nation. Kuwait, which has thus far been found to lag behind infrastructural development due to lingering elements of disharmony and tensions within its internal political fray, is eager to shake off its lethargy with the launch of two ambitious projects worth a combined $17 billion set to become operational in 2020 in order to complement its massive housing development spree.

In spite being one of the GCC’s smallest economies, Bahrain was among the first to catch the ‘rail-fever’, announcing plans to launch a monorail network across its capital city of Manama shortly after the launch of the first phase of the Dubai Metro in 2009. Today, the country’s investments in the area total nearly $9 billion, with the first phase commissioned for completion as early as 2016.

Tribulations abound

While the Gulf nations may have strongly entrenched their commitment and determination to realizing the $148 billion dollar mega-project, taking all preliminary measures to follow through with the plans within the past few years, there is evidence that doubts surrounding its timely completion are not completely unfounded.

Construction works on the majority of initial phase developments are yet to begin in all but the UAE and KSA, and even though budgets have been announced and feasibility studies concluded, plans to finance the projects are yet to be fully determined as overseeing authorities for each country’s rail endeavors contemplate the extent and nature of private sector involvement. Public funding, mostly from sizeable budget surpluses generated by buoyant international oil prices, is expected to cover a significant proportion of the costs, especially as PPP (Public Private Partnership) financing models continue to be an oddity in the region, having suffered another debilitating setback in the global economic events of the past few years.

Another major hindrance that has already proved costly to the project in terms of delays, cost overruns as well as conflicts in procurement procedures and strategies is the lack of a common authority managing the seamless integration of the national-level railway systems. After much idle speculation and vague timeframe announcements, a final, definite deadline of 2014 was mutually agreed upon by member states early this year, thus allowing decision making across the individual rail authorities to successfully become streamlined and pave the way for implementation of unified standards and specifications throughout the regional network.

“The railway industry in the GCC is at its early stages of development,” states Arash Aghdam, MENA director of rail and transit at Parsons Brinckerhoff, a US-based pioneer in infrastructural development that is closely involved with the project. “It [the railway system] has to fit the purpose of the GCC and its various member countries. The timeframe is unknown (for the projects) but the mandate is huge,” he adds in a statement to Zawya, effectively summarizing the outlook for the project.

“It is an interesting time to observe the development of the strategies. The clients are informed and ambitious. They would like to receive the best that they can get and they should. We need a system that looks good in 10 years time and is sustainable in 20 years to come,” concludes the executive.

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