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Sunday, May 9, 2021

2018 deadline in doubt for $15.4bn GCC rail link

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The GCC’s ambitious, new multi-billion-dollar railway may not meet its deadlines, despite recent assurances from a GCC official that the project is on track.

Assistant Secretary-General for Economic Affairs at the GCC General Secretariat Abdullah Al Shibli said in a statement this week that the 2,117 km project was expected to cost an estimated $15.4bn, and that it should be completed by 2018, a year later than originally predicted.

He added that a design work for the entire route – linking Kuwait to Muscat through Saudi Arabia, Bahrain, Qatar and the UAE – was underway, and that a Gulf Railway Authority was being established to supervise the project.

For its part, Qatar appears to be on schedule in constructing a rail connection to Saudi Arabia, but progress in building a long-awaited bridge to Bahrain has been limited.

While the cost estimates have remained steady for some time – a report by the Oxford Business Group (OBG) also produced a $15bn estimate in 2012 – several commentators, including prominent politicians in the region, have raised concerns that progress has been too slow for the railway to meet its slated opening date.

Regional concerns

Earlier this month, the UAE Minister of Public Works, Abdulla Belhaif Al Nuaimi, called on all GCC nations signed up to the rail network to agree on a set construction timeline and expressed concern that many nations had not yet broken ground:

“I expect there will be a delay because some GCC countries didn’t start,” Al Nuaimi said. “The barriers are sometimes not financial. Sometimes it’s about residential areas being situated in the way of the routes. We are calling for a unified program that we can all stick to.”

And in January, Kamal bin Ahmed, Bahrain’s Minister of Transport, told Bloomberg that a new rail causeway linking Bahrain and Saudi Arabia was still at the discussion stage:

“The target is 2018; I’m not sure if we can achieve it, it’s something we will identify at the end of the study in September 2014,” he said. “I hope during the next few years we will expedite this project but it’s big, it’s complicated and we need to make sure that we do it right.”

He added that the 2018 completion target was “very challenging” and that “all the GCC countries are behind schedule.”

Meanwhile, reports from Kuwait suggest that officials there believe a 2019 deadline is more realistic. No design has yet been confirmed for the country’s 320 miles of track, with a construction tender for the line anticipated in about 18 months, according to Mansour Al Bader, chairman of the country’s railway advisory committee.

Here in Qatar, rail officials told reporters in December that this country’s government was in the process of awarding a design contract for a long-distance line that would connect Qatar with Saudi Arabia. Construction was scheduled to begin in the third quarter of 2015 and wrap up by 2017-18.

However, a branch line connecting Qatar and Bahrain via a causeway between the two countries still appears to be far from reality. Construction was originally supposed to start in 2010, but a Bahrain newspaper reported last year that blueprints were still being drafted for the multibillion-dollar project.

In December 2012, Bahrain’s foreign minister told Al Sharq that he didn’t believe the project – which will also include a new road bridge – would be finished until just before the World Cup in 2022.

Qatar Rail has not yet responded to a request from Doha News for comment.

Milestones

Despite these setbacks, some progress has been made on the project.

Saudi Arabia has already built around 200 km miles of track, and the Saudi Railway Organisation has said that the design for the rest of the line will be ready by the end of this year.

The UAE has also already begun construction, with work on its 1,200 km Etihad Rail project now underway. The first phase of this project – some 266 km – is expected to begin operating by the end of this year.

Meanwhile, Oman is considering issuing bonds to fund its part of the route, which is estimated to cost $3bn.  Abdulrahman Al Hatmi, a director of the Oman National Railway Co, told Bloomberg that the country is determined to press on with the project quickly:

“We are moving fast now. One of the key changes we’ve made is to connect to Salalah, which is the mouth of the whole region and will play a major role in transforming the whole logistics map.”

Freight security

Passenger trains on the new line would travel at approximately 220km/hour, according to Al Shibli, with freighter trains operating at 80-120km/hour.

It’s not known if electric or diesel engines will be used on the line.

The new railway is expected to significantly boost trade volumes between GCC countries and increase the security of exports by allowing freight to bypass the Strait of Hormuz – the only sea passage between the Gulf and the Arabian sea.

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