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Oxford Business Group

Oxford Business Group

Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic intelligence on the markets of the Middle East, Africa, Asia…

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GCC Nations Unite For Mega Railway Project

  • The GCC Railway project, proposed to connect the GCC countries via a 2177-km railway, is gaining momentum after fiscal pressures and other challenges caused delays.
  • The railway would improve regional connectivity, reduce transport time and cost between major GCC cities and ports, enhance trade flows, and attract potential investors.
  • Individual countries have been making progress in their respective projects - Kuwait with the first phase of a GCC Railway track and metro project, Saudi Arabia with the final passenger stop on the Northern Train Network, the UAE with the first phase of its national rail network, and Qatar with the launch of the Doha Metro and the Lusail Tram.
Railway

Following delays, the long-awaited GCC Railway looks likely to be revitalised – a move that could transform trade and connectivity across the Gulf. The initiative was given a significant boost in December 2021 when leaders of the six GCC countries approved the establishment of the GCC Railways Authority, the body that will oversee the coordination of the project. The decision marks a potentially significant development for rail infrastructure in the region.

In 2009 after a decades-long debate, all member states approved the GCC Railway project. However, fiscal pressures delayed plans in recent years. These setbacks were associated with the oil price drop of 2014 and, more recently, the Covid-19 pandemic and diplomatic tensions, the latter of which resulted in an economic blockade of Qatar by some of its regional counterparts from June 2017 to January 2021.

The proposed plan aims to connect the GCC countries via a 2177-km railway. Starting in Kuwait City in the north, the rail line will pass through the coastal cities of Jubail and Dammam in Saudi Arabia, before heading through Bahrain’s capital Manama and Doha, the capital of Qatar. The line would then cut back into Saudi Arabia before moving to the UAE, where it would pass through the major cities of Abu Dhabi, Dubai and Fujairah, before reaching its terminal station in Muscat, the capital of Oman.

Hopes of the resumption of the project were given a further boost in March 2022, when Qatari media reported that construction of the section connecting Qatar and Saudi Arabia would begin soon, with groundwork such as engineering designs and a work plan already completed. This followed regional media reporting in December 2021 that officials anticipated the railway would be operational by 2025.

Greater Connectivity & Trade

The development of the railway would significantly improve regional connectivity by reducing transport time and cost between major GCC cities and ports, improving trade flows across the bloc and attracting potential investors. Business figures in the Gulf have noted that the shorter travel times could help bolster the tourism and entertainment sector – an area that several countries are looking to grow in line with wider efforts to diversify and better integrate their economies. For example, in December 2021 the Kuwait Investment Authority announced it would allocate $830m for the tourism sector in line with New Kuwait 2035, the country’s long-term economic development framework. These efforts could help the country attract more regional visitors after the rail comes on-line.

The construction of a GCC-wide railway bodes well for regional collaboration and would support plans for greater economic alignment within the bloc. Indeed, the GCC has sought to accelerate the establishment of a joint Customs union and common market ahead of the goal of establishing regional economic unity.

Kuwait Makes Progress

 The development of the GCC Railway ties in with individual countries’ efforts to expand their local transport infrastructure. Amid plans to reduce carbon emissions and improve connectivity, the Gulf countries see rail as key to the future of their transport systems. In June 2022 Kuwait’s Public Authority for Roads and Transportation announced the first phase a project that includes a tender for the study and engineering design of a 111-km TRANSPORT of the GCC Railway track. The phase is due to be implemented by the close of 2023. This tender will determine the railway route, work procedure, implementation mechanism, time required and the real cost with associated the project. The estimated cost of Kuwait’s portion of the railway is KD300m ($987m).

Kuwait also has a metro project, the Kuwait Metropolitan Rapid Transit (KMRT) that will eventually link with the GCC Railway. The KMRT will be built in five phases and spread over 160 km, with 68 stations along four lines, connecting the capital city with Kuwait International Airport, Kuwait University, and residential and industrial areas. The authorities consider this vital to enhancing productivity and connectivity. The metro project will have a significant economic impact, reducing commuting cost and providing an alternative high-capacity mode of transport and reduce traffic congestion. It will also contribute towards Kuwait’s aim of reducing CO emissions.

Saudi Arabia Pushes Ahead

Despite having the region’s most extensive network comprising around 5000 km of track, Saudi Arabia continues to update its rail infrastructure. In March 2022 the fifth and final passenger stop on the Northern Train Network – Al Qurayyat station, located near the border with Jordan – opened to the public. This upgrade allows passengers to travel the 1215-km stretch from the country’s north to the capital Riyadh in around 12 hours, helping to link the various areas of the Kingdom.

The expansion came after the 2018 inauguration of the Haramain High-Speed Railway that connects the country’s two holy sites of Makkah and Medina, providing travellers a fast mode of transport. Travelling at speeds of 300 km per hour, passengers can make this journey in two hours and 25 minutes. The 450-km electric line also makes stops in Jeddah, at King Abdulaziz International Airport and at King Abdullah Economic City. Estimates from before the Covid-19 pandemic predicted that the line would transport around 60m passengers per year, including 3m-4m to the Hajj and Umrah pilgrimages. As an alternative to bus and car travel, rail would significantly alleviate traffic congestion on roads and motorways.

The UAE Builds Its Network

The UAE has also invested heavily in rail infrastructure. In addition to emirate-specific developments like the Dubai Metro and Dubai Tram systems – which launched in 2013 and 2014, respectively – there have also been UAE-wide projects in recent years. In 2016 the country began the first phase of its national rail network, a freight service linking gas fields in Shah in the south to Ruwais on the coast. The second phase of the project, which includes a passenger service linking 11 cities, was near completion as of November 2022, with a line between Dubai and Abu Dhabi completed in March 2022.

Through the UAE’s ambitious plans, trains travelling at speeds of up to 200 km per hour are expected to transport 36.5m people and millions of tonnes of freight every year. By taking cars and trucks off the country’s roads, it is also expected to reduce transport-related CO emissions by 70-80%.

Once completed, train travel between Abu Dhabi and Dubai – the UAE’s two largest cities – is expected to take around 50 minutes, while the trip from Abu Dhabi to Fujairah is expected to be around one hour and 40 minutes – around half the time it takes by car.

Qatar Looks Towards Major Events

Qatar has also improved its transport network, providing additional ways to make travelling around the country safer, cleaner and more cost-effective. In 2019 the country launched the Doha Metro, a three-line, 37-station rapid transit system connecting the capital with its suburbs. The first line of the Lusail Tram, a light rail system in its namesake city just north of Doha, was launched in January 2022. Once fully operational, the system will consist of four lines and run through 25 stations. The Lusail Tram network will serve residents by offering an environmentally friendly mode of transportation that will connect destinations within Lusail, and link Lusail to Doha by way of the Doha Metro.

Much of Qatar’s public transport expansion has been designed for fans travelling to the 2022 FIFA World Cup matches and cultural events. The country connected five of the eight 2022 FIFA World Cup stadia to the metro line, with the rest connected by a combination of metro and shuttle services. As of November 2022 Qatar had a fleet of 4000 buses to shuttle passengers between transport centres and stadia. According to Qatar Rail, Doha Metro and Lusail Tram transported around 2.4m passengers during the first four days of 2022 FIFA World Cup alone.

Impetus For Development

In other parts of the region, there is hope that the revitalisation of the GCC Railway will reignite other dormant domestic rail plans. For example, the government of Oman has long had plans to construct a national rail network; it proposed a 2100-km link starting at the UAE border and passing through Sohar and Muscat in the north before linking up with the port towns of Duqm and Salalah on the country’s coast.

In recent years the country has advanced its railway infrastructure, leading to hopes that the national project will soon revive. In July 2021 the government unveiled plans to construct the country’s first metro network. The project would connect the commercial districts of Ruwi, the administrative centre of Muttrah and the northern coastal town of Al Seeb via the Muscat International Airport.

In September 2022 Oman Rail and Etihad Rail signed a $3bn agreement to build a railway. The new railway entity, Oman-Etihad Rail, established under the agreement will primarily connect Sohar to Abu Dhabi.

By Oxford Business Group

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