GCC rail projects attract global attention

20 February 2024

 

Progress on planned rail projects across the GCC has been a stop-start affair over the past decade.

While significant progress was made on Etihad Rail phases two and three in 2018, and work continued on the Riyadh and Doha metros, both awarded in 2013, little progress was made on major rail schemes such as the Saudi Landbridge, Bahrain Metro and Kuwait Metro.

Other significant schemes, including the Abu Dhabi and Jeddah metros, were put on hold.

With key opportunities not progressing, many international rail contractors gave up on the region and looked for opportunities elsewhere.

The decline in project activity was due to two factors. The first was the effect of low oil prices on government spending. The second, more subtle reason was a lack of high-level political buy-in. Rail projects were not a priority for the region’s leaders.

Today, the sentiment for rail in the GCC could not be more different. Progress is being made on a range of large-scale railway schemes, hence offering huge opportunities for international contractors to return to the region.

The spike in project activity levels in the regional rail sector means contractors will have plenty of opportunities to choose from.

The turning point came in January 2021 when GCC countries signed the Al Ula agreement. The official announcement by the GCC secretariat effectively restarted the GCC railway project, which will connect all six GCC countries with a sprawling railway link.

Since then, a string of recent moves and statements have meant all six bloc members have either declared or signalled their plans for their sections of the rail network.

Major markets

Saudi Arabia and the UAE stand out in terms of work opportunities for international contractors. Saudi Arabia, in particular, has moved towards starting significant rail projects, including the Saudi Landbridge and Riyadh metro extension.

The kingdom is preparing to start work on the $7bn Saudi Landbridge project this year as the negotiations for the final cost and financing of the project reach the closing stages.

Contractors will also be eyeing the doubling of the second track on the North-South Railway (NSR) network. In January, Saudi Arabia approved the project at an estimated investment of SR4bn ($1bn).

The Royal Commission for Riyadh City (RCRC) also received prequalification forms from consortium companies for the tender to design and build the next phase of the Riyadh Metro project. Three teams of local and international contractors have formed to bid for the contract.

The other significant railway scheme in the market is the Riyadh Metro Line Two extension, for which the Royal Commission for Riyadh City (RCRC) has issued a tender notice. According to sources close to the project, the tender is open only to the contracting groups working on the Line Two scheme.

These significant undertakings will link key cities and industrial hubs to boost the country’s logistics and industrial sectors and improve passenger transport infrastructure, especially in Riyadh.

In the UAE, the country has announced the partial completion of the Etihad Rail scheme, with freight trains beginning operations in February.

The country is now looking to strengthen its rail infrastructure further as it begins the procurement process for a railway link connecting the UAE with its neighbour Oman.

Oman Etihad Rail Company received bids in February from several consortiums comprising a mix of local and international contractors for three civil works packages for the UAE-Oman railway project.

The country is also preparing to start construction on the UAE’s high-speed rail project after asking contractors to express interest in the early works for the line connecting Abu Dhabi and Dubai. The client is expected to launch the prequalification process for the main contract tender in Q2 of this year. 

Meanwhile, tendering activity is ramping up for the highly anticipated Dubai Metro’s new Blue Line. Dubai’s Roads & Transport Authority (RTA) has set a deadline of 19 May for consortiums to submit their bids for the design and build contract. It is one of Dubai’s largest upcoming infrastructure schemes, requiring international contractors to work in a joint venture with local partners.

Contractors have started work on the first phase of Abu Dhabi’s long-awaited light rail transit (LRT) system. The local National Infrastructure Construction Company (NICC) and National Projects & Construction (NPC) are carrying out the construction work.

Upcoming opportunities

In the coming years, several upcoming rail schemes in other GCC countries will also provide ample work opportunities for rail contractors.

Last year, Oman invited firms to prepare a pre-feasibility outline for the first phase of its planned Muscat Metro network. The project has long been discussed, and the tender for the preliminary consultancy work is a major step as it signals the government’s ambition to deliver the project.

Other planned metro projects are at a more advanced stage. Bahrain is expected to develop the initial phase of the upcoming metro scheme imminently. In February last year, Bahrain’s Transportation & Telecommunications Ministry prequalified firms that could bid for the tender for the upcoming project.

There are plans to extend the Red, Green and Gold lines in Doha, and the tendering activity is expected to start soon.

As projects move forward, the GCC’s railway sector presents a promising pipeline for contractors to capitalise on. With ambitious infrastructure projects under way and planned across the region, these schemes are expected to generate significant demand for skilled professionals and contractors.

By leveraging their expertise in the regional rail sector, contractors have the chance to play a vital role in shaping the future of transport in the region while filling their order books for years to come.

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Yasir Iqbal
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