meed-logo

line1 line2 line3
SIGN IN / REGISTER

Risks remain for GCC railway project

28 August 2023

 

Register for MEED's guest programme 

When the GCC secretariat agreed to restart the GCC Railway Project in 2021, it set the tone for one of the region’s most ambitious transnational projects.

The endeavour aims to connect the six Gulf nations with a sprawling railway network that will be a game-changer for the region’s infrastructure. The potential to boost trade, connectivity and regional economic development is enormous. 

But risks and challenges also lie ahead, including cost overruns and technical risks related to the project design, engineering and complexity that must be assessed, managed and monitored to ensure the project’s successful delivery.

Political risks

Political factors play a significant role in the development and operation of the GCC railway. Given that the network will traverse multiple geographies, one of its biggest tests is manoeuvring through the regional political landscape.

First and foremost among political considerations is the level of cooperation and diplomatic relations between the member states. The railway’s seamless operation relies on harmonised regulations, standard operating procedures and open communication between nations, as well as geopolitical stability. 

In this respect, the Al-Alu agreement of 2021 is key, as it laid the strong foundations for a more robust mechanism to ensure better cooperation between the GCC countries.

“The Qatar blockade was a big challenge to manage and the GCC countries have seen the consequences of the situation,” Alexandre Busson (right), director of rail, Hill International, tells MEED.

“They realised that there was no benefit in it for the region. So the Al-Ula declaration is really important.”

But while the agreement mitigates the political risk related to the GCC railway project to some extent, the potential for geopolitical tensions or disputes between the involved states remains and could impede the project’s progress by delaying decisions, complicating negotiations and disrupting work.

The GCC countries' wide-ranging economic interests and priorities could also impact their commitment to the railway project. Member states will need to consider their existing investments in other forms of transportation infrastructure, such as ports and highways. Balancing these interests requires careful negotiations and alignment of economic visions.

PPP contracts are more complex to negotiate and manage. But it [will be] very interesting to see how it goes because a successful PPP project could lead to the opening up of the market
Alexandre Busson, Hill International

Financial risks

The enormity of the GCC Railway Project becomes apparent when considering the huge costs involved. Laying tracks spanning six countries and crossing diverse terrains and urban areas, building stations, installing signalling systems and ensuring the safety of the network demands billions of dollars’ worth of investment.

With the financial stability of GCC nations closely tied to the global oil market, fluctuations in oil prices could significantly impact the ability and political will of governments to allocate funds to the GCC Railway Project.

“When GCC countries budget for infrastructure projects, they are very conservative with regards to the oil price in their budget,” says Busson. “And in terms of projects financing, they realise [the need] to diversify the economy and not be too dependent on oil prices.” 

Nevertheless, economic diversification plans mean each GCC nation faces its own set of budget constraints and priorities. Regional governments must juggle allocating limited funds to sectors such as healthcare, education, defence and infrastructure. The GCC Railway Project’s financial demands could strain these budgets, potentially diverting resources away from critical sectors.

To bridge the financial gap, governments are likely to explore a combination of public financing and private investment. Public-private partnerships (PPPs) have attracted interest from large-scale infrastructure projects in the region and the GCC railway will be no different. Luring private investors, however, requires a stable and attractive investment environment, coupled with clear revenue-generation models and risk-sharing agreements.

“The PPP model is quite new in the GCC. Even more so in transport,” says Busson. “Those kinds of contracts are more complex to negotiate and manage. But it [will be] very interesting to see how it goes because a successful PPP project could lead to the opening up of the market.”

You need to look at the consortium members and say, do we have the right balance within that particular consortium to be able to manage this project
Christopher Harding, Hill International

Technical risks

The technical risks of rail systems running across international borders are well documented. Examples include the Tan-Zam railway between Tanzania and Zambia and the rail link connecting Spain and France, where the adoption of different gauges meant construction was fraught with technical difficulties when joining the networks to each other.

“Inaccurate or complex specifications sometimes lead to extra efforts [needing] to be put into the interface management and getting interface agreements between the contractors,” explains Christopher Harding (right), a senior project management professional currently working on the Cairo Metro project for US-based consultant Hill International.

“That leads to claims from contractors and hence may lead to cost overruns.”

The complexity of the GCC Railway Project raises the stakes when it comes to technical risks. Meticulous planning and implementation will be required to ensure seamless connectivity across deserts, mountains and coastal areas, while the need for bridges, tunnels and viaducts to overcome geographical obstacles demands robust engineering solutions. 

Addressing these engineering risks requires a comprehensive understanding of the local environment, as well as innovative and consistent engineering techniques.

“There needs to be a common policy on the control systems for each country and how they talk to each other,” says Harding.

The involvement of multiple contractors will bring contractor-related risks too. Coordination between these entities will be key, as delays in one segment could cascade through the entire network, causing misalignments and operational bottlenecks.

“You need to look at the consortium members and say, do we have the right balance within that particular consortium to be able to manage this project,” says Harding.

Another significant challenge will be maintaining uniform quality standards across the contractors working on the GCC Railway Project to prevent differing construction techniques, materials and safety practices from potentially compromising the railway’s overall integrity and efficiency. 

“The rules around aspects like recruitment localisation, In-country Value (ICV), In-Kingdom Total Value Add (IKTVA) and regional headquarters requirement could be a challenge for new companies,” adds Busson.

The establishment of the GCC Railway Authority to oversee the overall implementation of the project will go some way towards resolving the technical issues outlined here. The authority is tasked with ensuring common standards and specifications, and supervising the railway’s interoperability and regional integration.

For the project to succeed, the authority must develop robust risk management strategies, effective communication channels among contractors, stringent quality control measures and transparent procurement processes.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11099328/main.jpg
Yasir Iqbal

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Saudi Arabia’s power award activity slows

    10 September 2026

     

    Saudi Arabia’s power market has seen a sharp fall in contract awards in 2026 following a major wave of renewable energy investment last year.

    According to regional project tracker MEED Projects, about $3.38bn of power sector contracts were awarded in the kingdom as of early September, compared with $27.5bn in 2025, $54.2bn in 2024 and $26.1bn in 2023.

    The relatively low level of contract awards this year has partly been influenced by a shift towards wider infrastructure such as battery energy storage systems (bess) and transmission projects, alongside delays in the procurement of renewable energy projects under the National Renewable Energy Programme (NREP) Round 7.

    In September, Saudi Power Procurement Company (SPPC) awarded four Group 1 storage service agreements representing more than SR4.35bn ($1.16bn) of investment. The projects will provide a combined 2,000MW of capacity and 8,000MWh of storage.

    Three bess projects, Al-Muwyah, Haden and Al-Kahafa, were awarded to a consortium of Saudi Energy, Acwa and Al-Sharif Contracting & Commercial Development Company. Another consortium of France’s Engie and Haji Abdullah Alireza & Co won the contract for the remaining Al-Khushaybi bess project.

    Transmission awards

    The battery storage projects are part of a broader shift towards the infrastructure needed to support Saudi Arabia’s expanding power system, with transmission accounting for most of the contracts awarded this year, reaching $3.35bn in new awards.

    The largest is the estimated $500m contract awarded to Alfanar Projects in March for the 500kV overhead transmission line linking Saudi Arabia’s Eastern and Central operating areas. The 508-kilometre project will have a transmission capacity of 3,000MW.

    Saudi Energy, formerly Saudi Electricity Company, is implementing a $58.7bn grid investment programme through 2030, including 130 high-voltage substations, about 12,900km of overhead transmission lines and 1,100km of underground cables.

    Saudi Energy is the largest owner by value so far this year, accounting for about $1.9bn of contract awards, while SPPC has awarded more than $1.1bn in new contracts.

    The focus on storage and transmission follows strong growth in renewable generation investment in 2025. Wind power contract awards reached $4.4bn, while 11 major solar contracts were also awarded.

    In May 2025, developers signed $8.3bn of power purchase agreements with SPPC for five solar plants and two wind farms with a combined capacity of 15,000MW, somewhat inflating last year’s figures. The projects, backed by the Public Investment Fund, reached financial close in November.

    Renewables projects

    The next major phase of renewable procurement is now moving through the tender process. The seventh round of NREP, tendered in January, will add 5,300MW through four solar and two wind projects.

    Based on the procurement timeline for the Round 6 projects, which were tendered and awarded in 2026, it was reasonable to expect Round 7 to follow a similar schedule.

    However, according to one developer, rising supply costs have been a factor in recent deadline extensions for these projects, with those involved “waiting till these come down”.

    With the latest bid submission deadlines set for September, the timing of the procurement process means contracts from NREP Round 7 may now fall into 2027 rather than materially lifting this year’s total.

    The solar projects comprise the 1,400MW Tabarjal 2, 600MW Mawqqaq, 600MW Tathleeth and 500MW South Al-Ula independent power projects (IPPs). The round also includes the 1,300MW Bilgah and 900MW Shagra wind IPPs.

    This helps explain why Saudi Arabia’s power sector contracting could remain relatively subdued in 2026 despite a substantial volume of projects progressing through procurement.

    Project pipeline

    According to MEED Projects, about $5.1bn of power projects are currently under bid evaluation and a further $7.3bn are at the main contract tender stage.

    Solar projects make up the largest share, at about $5.1bn, or 41% of the total. There continues to be relatively strong diversification, with cable and overhead-line projects accounting for about $3bn, followed by wind at $2.2bn, oil and gas-fired power at $1.1bn and substations at about $1bn.

    Renewable energy remains a particularly significant part of the development programme. Saudi Arabia raised its renewable energy target to 130GW by 2030 in 2023 and needs to add roughly 20GW of capacity a year to meet it.

    Large-scale storage is also expected to continue expanding. The latest SPPC projects build on five bess facilities awarded by Saudi Energy through National Grid Saudi Arabia to Alfanar in 2025. The facilities have a combined capacity of up to 2,500MW, equivalent to about 10,000MWh.

    SPPC has also issued the request for proposals for the second phase of its independent bess programme in Saudi Arabia. The Group 2 programme comprises six independent storage provider projects with a total capacity of 3GW, equivalent to 12,000MWh based on a four-hour storage duration. Developers are due to submit bids in October. 

    The timing means the Group 2 projects could contribute to contracting activity in 2027, alongside this next batch of renewable projects under NREP Round 7.

    Nuclear power could provide another potential source of activity over the next 12 months. The US and Saudi Arabia signed a civil nuclear cooperation agreement in July, providing the legal foundation for a long-term, multibillion-dollar nuclear partnership.

    While the agreement is unlikely to translate immediately into major contract values, further progress on Saudi Arabia’s nuclear programme could add another area of activity in the sector as the kingdom moves into 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19535830/main.gif
    Mark Dowdall
  • Groundworks under way for major Iraqi water project

    10 September 2026

     

    Early groundworks have started for Iraq’s Common Seawater Supply Project (CSSP), according to industry sources.

    Design work is ongoing, and the project is currently scheduled to start up in late 2028 or early 2029, sources said.

    Austria’s ILF Consulting Engineers is supervising the project, which has been split into two packages.

    The first package focuses on developing pipelines, and the second on developing a water treatment facility.

    China Petroleum Pipeline Engineering (CPP) is executing the contract for the pipeline package.

    It signed a $2.5bn contract with Iraq’s state-owned Basra Oil Company (BOC) for the pipeline package in September last year.

    The seawater treatment facility is expected to have a capacity of 5 million barrels a day (b/d), potentially rising to 7-8 million b/d in later phases.

    In September last year, South Korea’s Hyundai announced that it had signed a contract worth KRW4.39tn ($3.16bn) for the processing plant package.

    South Korea’s Hyundai Livart has won a contract worth KRW117.8bn ($80m) to build worker accommodation, offices and other infrastructure at the CSSP site in Basra.

    South Korea’s Maeil Business Newspaper reported that Hyundai Livart secured the contract through a competitive bidding process against several Middle Eastern construction firms.

    Work on the accommodation and infrastructure package is scheduled for completion by June next year.

    Processed water from the CSSP project will be injected into some of Iraq’s largest oil fields – Rumaila, Zubair, West Qurna 1, West Qurna 2 and Majnoon – and also used in the Maysan and Dhi Qar fields.

    Iraq’s Oil Ministry said the injected water will help maintain reservoir pressure and sustain crude production.

    The CSSP is part of the broader Gas Growth Integrated Project (GGIP), which has an estimated total value of $27bn and a first phase worth an estimated $10bn.

    GGIP is being developed by France’s TotalEnergies, Iraq’s Basra Oil Company and QatarEnergy, which hold stakes of 45%, 30% and 25%, respectively.

    The GGIP programme is focused on developing four major projects in Iraq:

    • CSSP
    • The Ratawi gas processing complex
    • The 1GW solar power project for Iraq’s electricity ministry
    • A field development project at Ratawi, known as the Associated Gas Upstream Project (AGUP)

    All four of these projects are currently under execution, though there have been some delays related to the regional war that started when the US and Israel attacked Iran on 28 February.

    The conflict has caused significant disruption to shipping through the Strait of Hormuz, which Iraq uses to export crude oil and import equipment and materials for projects.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19528731/main.jpg
    Wil Crisp
  • Oil prices rise above $100 a barrel as conflict escalates

    9 September 2026

    Register for MEED’s 14-day trial access 

    Oil prices rose above $100 a barrel on 9 September for the first time since July as the US-Iran conflict escalated and Iran-backed Houthi forces attacked Saudi energy infrastructure.

    Brent crude futures reached $100.95 a barrel, while US benchmark West Texas Intermediate (WTI) rose to $95.60. Brent had last traded above $100 on 24 July.

    The latest escalation has heightened concerns about oil supplies from the region, with shipping through both the Strait of Hormuz and the Red Sea facing disruption.

    Flows through the Strait of Hormuz had fallen below 2 million barrels a day (b/d) from about 8-9 million b/d before the latest escalation, according to Rystad Energy.

    At the same time, Houthi attacks on Saudi Arabia threaten another important route for oil exports, with the group targeting energy infrastructure and shipping in and around the Red Sea.

    US strikes on Iranian tankers

    US forces destroyed five Iranian crude oil carriers on 8 September after Iran’s Islamic Revolutionary Guard Corps (IRGC) targeted a US Navy warship with ballistic missiles.

    The US Central Command (Centcom) said the warship successfully evaded two Iranian attacks and that no US personnel were harmed.

    Four of the Iranian vessels – Kaviz, Charminar, Horizon 1 and Riesco – were struck in the Gulf of Oman, while the Derya was attacked near Kharg Island, Iran’s main crude export hub.

    The M/T Riesco subsequently sank in the Gulf of Oman, according to Centcom.

    Iran responded by launching ballistic missiles towards Jordan. Jordan’s armed forces said 18 of 20 missiles were intercepted, with the remaining two falling in unpopulated areas.

    Iran’s IRGC also said it had attacked two US naval vessels, eight oil tankers and 10 other vessels in the Gulf, although it did not identify the vessels or provide evidence of the attacks.

    The latest exchanges mark a further escalation in the US-Iran conflict, which began on 28 February.

    Houthi attacks raise supply concerns

    The conflict has also widened into a renewed confrontation between Saudi Arabia and Yemen’s Iran-backed Houthi movement.

    On 8 September, Saudi authorities said Houthi attacks had targeted civilian and economic sites in Abha, Khamis Mushait, Jazan and Najran in the south of the kingdom, injuring 73 people.

    Saudi Arabia’s Ministry of Energy said several energy sector facilities and installations had been targeted, causing fires and forcing a temporary halt to some operations.

    The Houthis said their attacks were in response to Saudi military action in Yemen, including what they described as attacks on Houthi positions and a Saudi blockade of ports and airports.

    Riyadh condemns attacks

    Saudi Arabia has strongly condemned the Houthi attacks and warned that it would take measures to defend its territory and national assets.

    In a statement on 8 September, the Ministry of Energy said authorities were working to address the impact of the attacks and ensure the safety of facilities and personnel while maintaining operations in accordance with approved plans.

    Saudi Arabia’s Ministry of Foreign Affairs also condemned the attacks and said the kingdom had the right to take measures to defend its sovereignty and protect its citizens, residents and national assets.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19505512/main0138.jpg
    Indrajit Sen
  • What actually slows a gigaproject down

    9 September 2026

     

    Ask anyone delivering a major programme in the GCC what causes delays and sequencing will come up early. Utilities go in too late. Approvals lag behind construction. Stations, depots and access roads are procured as if they belong to different projects rather than one system.

    “None of this is new. The industry has understood these risks for years,” says Alan Caldwell, managing director for transport and infrastructure at WSP Middle East.

    For Caldwell, that is what makes the pattern worth interrogating rather than simply restating.

    “The more important question is why the same issues around interfaces, approvals, stakeholder alignment and delivery sequencing continue to slow major programmes when the risks are already so well understood,” he says.

    The answer, he argues, is not that these programmes are too big or too technically complex. What breaks a schedule is a wider system delivered as a set of disconnected parts; an approval sitting with an authority team with no visibility of the construction sequence downstream; or a station package proceeding without the utilities diversion it depends on.

    “Infrastructure programmes do not struggle because a railway is too large or a highway network is too complex,” Caldwell says. “They encounter difficulties when interconnected elements are delivered in the wrong order.”

    Sequencing decisions are rarely purely technical either, he adds. They are commercial – shaped by which assets need to unlock value first, which phases are tied to funding, and where sales or investment assumptions depend on infrastructure landing in a particular order.

    Approvals sit at the centre of that logic. On many programmes, they become one of the biggest sources of lost time – not because the requirements are unreasonable, but because approvals are not planned, evidenced or owned as part of the delivery logic from day one.

    Caldwell has seen the same pattern across three decades of Gulf delivery, from early work on Palm Jumeirah to today’s region-wide transport programmes.

    “The decisive factor has often been the same: whether interfaces, approvals, responsibilities and delivery sequencing are aligned early enough to prevent complexity becoming delay.”

    Integration needs to be well understood

    “Most programme teams in the region would say they understand the need for integration,” Caldwell says. Fewer are structured to deliver it. “The harder task is turning that understanding into the way projects are actually set up and managed,” he argues.

    Riyadh Metro is the reference point he returns to, precisely because engineering complexity was not the deciding factor in its delivery.

    Coordinating a city-scale transport system meant aligning design, construction, systems, utilities and stakeholder interfaces across every delivery vertical.

    “The lesson for the region today is clear,” Caldwell says. “Ambitious programmes need a delivery model that gives every contributor a shared view of progress, risk, decision-making and the business case driving programme priorities.”

    That shared view, he argues, will be what the next phase of Gulf delivery is judged on.

    Whether clients, consultants, contractors, operators and approval authorities can work to a single delivery logic will be key.

    “This requires more than coordination meetings. It requires integrated ways of working, shared common data environments and governance structures that make risks, decisions and dependencies visible before they become delays,” he says.

    From reporting progress to managing risk before it lands

    Digital tools have a role here, Caldwell says, but not as a headline in themselves.

    Digital twins, programme visualisation and data-led modelling matter only if they help teams identify and address problems before they affect the wider programme.

    “The real value is not technology for its own sake,” he says. “It is the ability to see, in one place, where approvals are outstanding, where interfaces are unresolved, where programme dates are slipping, where clashes are emerging and where decisions need to be escalated."

    None of it works without governance behind it, he cautions. “A dashboard will not resolve a delayed approval if nobody knows who owns the decision, when it needs to be made, or how it should be escalated.”

    Data only has value if the processes and responsibilities around it are clear, which is why Caldwell frames the shift the region needs not as digitisation, but as a move “from programme management as a discipline focused mainly on reporting and coordination, and towards project and programme intelligence”.

    With many of the region’s programmes running for a decade or more, he adds, delivery models also need to flex as funding assumptions, user needs and policy priorities change along the way.

    “The ambition behind the Gulf’s transformation programmes is not in question,” Caldwell says.

    What will determine how much of it is realised on time is whether delivery models evolve at the same pace: earlier integration, clearer approval pathways, shared data environments, and every contributor working to a delivery logic that connects technical sequencing with the funding and operational case behind it.

    “The region’s next challenge is not imagining bigger projects,” he says. “It is changing the way they are delivered, operated and adapted over time.”

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19502016/main.gif
    Yasir Iqbal
  • Qatari firm wins $221m Qiddiya stadium MEP deal

    9 September 2026

     

    Register for MEED’s 14-day trial access 

    Qatari contractor Elegancia MEP, part of Estithmar Holding, has won a SR829m ($221m) mechanical package contract for the Prince Mohammed Bin Salman Stadium in Qiddiya, Saudi Arabia.

    The contract covers full mechanical, electrical and plumbing (MEP) works for the stadium, and is Elegancia MEP’s largest award in Saudi Arabia to date.

    The 45,000-seat stadium will feature a fully combined retractable pitch, roof and LED wall.

    The stadium’s main construction works are being undertaken by a joint venture of Spanish firm FCC Construction and local firm Nesma & Partners.

    Saudi gigaproject developer Qiddiya Investment Company awarded an estimated SR15bn ($4bn) deal to build the stadium in October 2024, as MEED exclusively reported.

    The contract covered the construction of a multipurpose stadium on top of the 200-metre-high Tuwaiq cliff in the new sports and entertainment district of Qiddiya City.

    Once completed, the stadium will be the home ground for Saudi Pro League football clubs Al-Nassr and Al-Hilal.

    US-based architect Populous is the project consultant.

    The stadium is one of the venues for the kingdom’s 2034 Fifa World Cup bid and will host events such as the Saudi King Cup, the Asian Cup and the 2034 Asian Games.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19501493/main.jpg
    Yasir Iqbal