meed-logo

line1 line2 line3
SIGN IN / REGISTER

The region’s most ambitious causeway projects

8 February 2023

 

The submission of feedback questionnaires and meetings with contractors for the planned second causeway connecting Saudi Arabia and Bahrain is the latest sign of potential progress on one of the region’s largest infrastructure projects.

Causeways have a chequered history in the region. The first causeway connecting Saudi Arabia and Bahrain was completed during the 1980s, and since then, it has had a transformative impact on the Bahraini economy. 

The project’s success has inspired other causeways. But while these schemes remain ambitions for many in the region, construction progress has been limited. The hope is that a successful second causeway linking Saudi Arabia and Bahrain will foster the delivery of other longstanding causeway plans.

These are the most ambitious causeway schemes that the region has planned:

 Second Saudi Arabia-Bahrain causeway

The second causeway between Saudi Arabia and Bahrain is the most likely to proceed. Planned by the King Fahd Causeway Authority, the $3.5bn project, which has been called the King Hamad Causeway project, is moving towards construction.

In 2021, senior government officials in Bahrain told MEED that the project was progressing towards tendering as financial studies had been completed.

The project was included in Bahrain’s $30bn Strategic Projects Plan that was announced later in 2021. As well as the causeway, the plan includes building new urban areas on five reclaimed islands to increase the country’s total land area by 60 per cent. It also comprises plans for a new airport.

The second causeway involves building a 25-kilometre road and rail crossing linking Saudi Arabia and Bahrain. It will follow the same alignment as the existing King Fahd Causeway.

It has been earmarked for delivery on a public-private partnership (PPP) basis. The King Fahd Causeway Authority appointed a consortium to provide transaction advisory services in late 2019.

The $8.9m consultancy agreement was signed with a consortium of Netherlands-headquartered KPMG, US-based Aecom and UK-based CMS. The team was tasked with working on developing the financing model, the required engineering specifications and design, as well as helping with the assessment and selection of the project’s developers.

Canada-based SNC Lavalin and UK-based consultancy firm PwC conducted the project due diligence study in 2017.

The existing King Fahd Causeway is operating at capacity. About 11.5 million cars cross the causeway every year, and the growth has been 6 per cent per annum over the past 10 years.

 Qatar-Bahrain causeway

There have also been suggestions that the proposed causeway bridging Bahrain and Qatar may be revived. In March 2022, Manama called for work to restart on the causeway joining the two countries.

“We in the Kingdom of Bahrain renew the call for the start of bilateral talks between the two sides in accordance with the mechanisms agreed upon in the Al-Ula statement,” said Bahrain’s undersecretary for land transportation and post in an official statement published by the official Bahrain News Agency.

The estimated $4bn Qatar-Bahrain causeway project was put on hold and the contracting consortium demobilised in 2010.

A joint venture of state-owned developer Qatari Diar Real Estate Investment Company and French contractor Vinci Construction Grand Projets led the consortium. The other consortium members were Germany’s Hochtief, Athens-based Consolidated Contractors Company (CCC), Dredging International from Belgium and the local Middle East Dredging Company (Medco).

The planned 40km bridge includes a four-lane motor crossing scheduled for completion in 2013 and two railway lines forming part of the GCC rail network.

The project also comprises 22km of bridges and viaducts, 18km of embankments and two 400-metre cable-stayed bridges. The causeway connects Ras Ashairij on the west coast of Qatar to Askar on the east coast of Bahrain.

The project was also known as the Friendship Bridge and was to be jointly funded by the Qatari and Bahraini governments, which intended to recover some of the construction costs by implementing a toll system on the bridge.

The crossing would cut the journey time between the two countries, which currently involves a detour through Saudi Arabia, from five hours to just 30 minutes.

 Saudi Arabia-Egypt causeway

The prospects for the causeway connecting the $500bn Neom project in Saudi Arabia and Egypt’s Sinai Peninsula across the Straits of Tiran improved last year after US President Joe Biden’s visit to Saudi Arabia.

After the visit, a joint communique issued by Washington and Riyadh referred to the development of Tiran Island.

“President Biden welcomed the arrangements by Saudi Arabia to remove the Multinational Force & Observers (MFO) from the Island of Tiran, including the removal of US troops there as part of the MFO mission, while preserving and continuing all existing commitments and procedures in the area,” it said. 

“This area of the Red Sea will now be developed for tourism and economic purposes, contributing to a more secure, peaceful and prosperous region.” 

The US-Egyptian-Israeli-backed MFO was founded in 1981 to oversee the terms of the 1978 Camp David Accords, which included the full Israeli withdrawal from the Sinai Peninsula.

In 2016, Egypt and Saudi Arabia agreed during a state visit to Cairo by King Salman bin Abdulaziz al-Saud to develop a causeway linking the two countries across the Red Sea. 

The agreement was made as part of a broader deal that would also involve Egypt ceding the sovereignty of the two Tiran islands to Saudi Arabia.

While details of the proposed crossing were never revealed at the time, it was understood to be a revival of a $4bn project announced in 2011. That scheme involved building a 32km crossing stretching over the Straits of Tiran from Ras Humaid in Tabuk, in the northern region of Saudi Arabia, to Ras Nasrani, close to the Egyptian resort of Sharm el-Sheikh.

Plans to link Saudi Arabia and Egypt are far from new. The development of a causeway was first mooted as far back as 1988. However, the idea has received additional focus in recent years following the launch of the Neom development in northwestern Saudi Arabia, which includes Ras Humaid. Part of the Neom scheme, the 170km-long linear city known as The Line, will extend from the promontory inland to the city of Tabuk.

UK-based Arup was reported to have been selected in 2019 for the next stage of the feasibility study for the causeway. 

Saudi Arabia was understood to be considering using a public-private partnership (PPP) model for the scheme, similar to other transport projects planned in and around the kingdom.

 Yemen-Djibouti causeway

A 28.5km causeway was planned to connect Yemen and Djibouti before the scheme was put on hold in 2010 until the governments of both countries signed the framework agreement for the project. The civil war in Yemen means it is unlikely the scheme will make any progress soon.

The estimated $20bn first phase involved building the link between the Yemeni mainland to the island of Perim in the Red Sea. Phase two would have then connected Perim with Djibouti.

The wider project also involves building two cities at each end of the link. The total investment required to construct the cities and the bridge is $200bn.

Dubai-based Al-Noor Holding Investment Company was developing the project.

In 2009, the company said it expected to award a build-operate-transfer contract for the first phase of the bridge and that three companies had expressed interest in funding and building the road and rail link. Denmark’s Cowi prepared the preliminary design for the crossing.

 UAE-Qatar causeway

In 2005, Abu Dhabi and Doha were reported to have been setting up a joint company to oversee the implementation of the proposed UAE/Qatar causeway.

The 40km causeway was expected to start near Sila in Abu Dhabi emirate and extend to the south of Doha.

The estimated $13bn crossing would have significantly cut journey times. At present, traffic between Qatar and the UAE has to pass through 125km of Saudi Arabian territory.

The scheme stalled shortly afterwards. Problems included difficulties with the route, which ran through Saudi Arabian territorial waters.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10571464/main.jpg
Colin Foreman

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

Click here to register
Exclusive from Meed
Related Articles
  • Kuwait cancels oil financing tender

    6 June 2023

    Kuwait’s national oil company Kuwait Petroleum Corporation (KPC) has cancelled its tender for a consultant to study financing options for the country’s state-owned oil and gas companies.

    In a statement published by KPC’s Higher Purchase Committee it said that the companies that purchased tender documents are eligible for a refund.

    The invitation to bid on the tender was issued on 18 December 2022.

    KPC did not give a reason for the cancellation of the tender.

    Kuwait has been looking to increase efficiency and restructure its state-owed oil and gas companies for several years.

    In 2020, a contract for a study to look into the restructuring was won by UK-based Strategy&, a subsidiary of the financial services company PwC.

    The plan was expected to cut costs and merge many of the state-controlled companies in the country’s oil, gas and petrochemicals sector.

    At the time, KPC said that the mergers would slash the number of large state-controlled companies in the sector from eight to four.

    In 2020, local reports said the Supreme Petroleum Council (SPC) and KPC had already approved plans to restructure the oil sector.

    It is thought that the restructuring could have significant benefits for KPC in the long term.

    A similar restructuring by Abu Dhabi National Oil Company (Adnoc) helped to open the door for increased foreign investment in the UAE’s energy sector.

    After a sweeping restructuring, in December 2017 Adnoc listed 10 per cent of Adnoc Distribution, the largest operator of retail fuel service stations and convenience stores in the UAE. This raised $851m, making it the largest initial public offering in Abu Dhabi in a decade.

    In May 2022, KPC said that it was considering selling shares in its downstream subsidiary Kuwait National Petroleum Company (KNPC), with the Higher Purchase Committee tendering a contract for a feasibility study regarding the potential “partial divestment of shares in KNPC”.

    At the time, the announcement about the potential share sale from the Higher Purchase Committee surprised many within Kuwait’s oil and gas sector.

    Despite Kuwait publicly discussing the restructuring of its oil and gas sector for several years, very little concrete progress has been made towards making the planned mergers.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/10915058/main.gif
    Wil Crisp
  • Region positions itself for sustainable future

    6 June 2023

    Commentary
    Colin Foreman
    Editor

    At the end of November, the region will host the UN’s climate change conference for the second time in two years. Cop28 in the UAE, like Egypt’s Cop27 last year, will bring world leaders together to discuss energy transition and the fight against climate change.

    Arresting climate change will arguably be humankind’s greatest challenge over the coming decades. To succeed, people from all over the world will need to work with each other, which is why events like Cop28 that bring countries together are so important – despite the criticism they can attract. 

    At the project level, cooperation will also become an increasingly important trend.

    This year there are clear signs that governments are jointly working on projects that will contribute to the fight against climate change. 

    Some of the best examples are in the transmission and distribution sector. In recent months, significant steps have been taken across a range of interconnection projects to link countries’ electricity grids. 

    Efficiency is the main driver for these projects. Particularly for GCC nations, the capacity to obtain large-scale solar energy affordably, combined with the marked differences in peak energy demands between the colder and hotter months, frequently leads to considerable surplus capacity.

    Smoothing out these peaks and troughs as part of a larger regional or international grid also means less power generation is required and reduced carbon emissions.

    As the shared challenge of climate change rises up the global agenda, more projects that pool resources, share expertise, and transcend borders and politics will be needed. 

    From regional collaborations on electricity grid interconnections to international climate conferences, the region is positioning itself at the centre of a more collaborative and sustainable future.

    This package includes:

    > Region plans vital big grid connections
    > Soaring data demand drives boom
    > Read the June 2023 MEED Business Review

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/10910825/main.gif
    Colin Foreman
  • Hospital boost for Jordan construction

    5 June 2023

    This package on Jordan's construction sector also includes:

    > Egis selected for Jordan hospital project
    > Jordan's largest construction project to move onsite
    > Hill wins work on Saudi-backed hospital project in Jordan
    > PIF to invest $24bn in six Mena countries

     

    Jordan’s construction sector will get a major boost this year as the country’s largest project prepares to move onsite over the summer after the first phase of its masterplan has been finalised.

    The $400m hospital project is being developed by the Saudi Jordanian Fund for Medical and Educational Investments Company (SJFMEI) on a build-operate-transfer (BOT) basis.

    For the hospital project, SJFMEI appointed US-based Hill International in partnership with the local sub-consultant Dar al-Omran to provide project construction management services last year. The project team is now preparing to tender construction contracts.

    “We have completed the first phase of the masterplan,” Said Mneimne, senior vice-president of Hill International, told MEED in an interview.

    “This summer, we will appoint a contractor for the enabling works. We will then appoint a contractor for the foundations and the structure,” he added.

    The scale of the project is a challenge for Jordan’s construction sector, and an international engineering, procurement and construction (EPC) contractor may be needed to deliver the project.

    “We have not yet decided what the contracting strategy will be,” Mneimne said. 

    The project involves the construction of a university hospital with 330 beds, 72 outpatient clinics, a children’s hospital, and a medical school with a total capacity of 600 students and a projected annual intake of 100 students.

    The project also includes five medical centres of excellence focused on disciplines such as cardiology, oncology, neurology, gastroenterology and orthopaedics. There will also be four scientific research centres in genomics and precision medicine, stem cells and regenerative medicine, health systems and public health, and bioinformatics.

    The built-up area is estimated at 110,000 square metres. It will be located on the airport road, near the Ghamadan area on the outskirts of Amman.

    A joint venture of Lebanon’s Dar al-Handasah (Shair & Partners) and Perkins & Will was appointed for the engineering design and supervision services.

    SJFMEI is a wholly owned subsidiary of the Saudi Jordanian Investment Fund (SJIF). Saudi Arabia’s Public Investment Fund (PIF) owns 95 per cent of the fund, while Jordanian banks hold the remaining 5 per cent.

    Ownership of the project will be transferred to the Jordanian government after the end of the investment period.

    The hospital is the largest active standalone project in Jordan, according to regional projects tracker MEED Projects. The second-largest project is the estimated $228m King Hussein Bridge Terminal and Freight Yard project, which is at the prequalification stage.

    Disappointing decade

    Major projects are needed after a disappointing decade for Jordan’s construction sector. 

    Data from MEED Projects shows a fluctuating trend in the value of construction and transport contracts awarded in Jordan over the past 10 years.

    In 2013, the total value stood at $1.429bn. A sharp rise in 2014 to $2.475bn marked the peak of contract awards during the period.

    A steep fall was witnessed in the subsequent years, with the total value plunging to just $662m in 2015, a dramatic decrease of nearly 73 per cent from the previous year. This downward trajectory continued, with the value plummeting further to a record low of $79m in 2020 amid the global economic disruption caused by the Covid-19 pandemic.

    A closer look at the data indicates periods of minor recovery, notably in 2017, when contract awards rose to $866m, following a particularly poor performance in 2016 at just $159m.

    Despite these rebounds, the overall trend illustrates a declining construction and transport sector in Jordan, with the years 2021 and 2022 recording values of $32m and $86m, respectively, a stark contrast to the highs of 2013 and 2014.

    The fluctuating values in contract awards reveal the industry’s volatility over the past decade, linked to regional instability, economic downturns and global disruptions including the Covid-19 pandemic.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/10914437/main.gif
    Colin Foreman
  • Political deadlock in Lebanon blocks reforms

    5 June 2023

     

    Lebanon’s political deadlock is likely to continue to weigh on the country’s economy and undermine security over the medium term, according to experts.

    The country currently has an interim government and has been without a president since former President Michel Aoun’s term ended at the end of October last year.

    Progress towards forming a new government is likely to be slow, with the legislature divided over who should replace Aoun as president.

    In March, the Iran-backed Hezbollah group and House Speaker Nabih Berri’s Amal Movement party – which together constitute Lebanon’s Shia base – announced their support for the Christian politician Sleiman Frangieh.

    Hezbollah and its allies have since tried to gather support for Frangieh as president, but strong opposition from the majority of the country’s Christian, Sunni and Druze political blocs has left him short of the 65 votes required to be elected in the 128-member legislature.

    Over recent weeks, members of Lebanon’s parliament that oppose Frangieh have started to rally around the former finance minister Jihad Azour.

    Azour currently serves as the director of the Middle East and Central Asia Department at the International Monetary Fund (IMF).

    As the parliament is divided, whether either candidate can obtain a majority vote remains uncertain. According to experts, even if a president is named, it will be extremely difficult for them to form a government.

    Nicholas Blanford, a non-resident senior fellow with the Atlantic Council’s Middle East programmes, says it will likely be some time before a government is formed.

    “Getting a president elected is only the first step,” he said. “Once the new president is in place, there is the tricky task of forming a new government.

    “As we’ve seen over the past 20 years, forming a new government can take months as people bicker and jostle for various lucrative and influential portfolios.”

    Barbara Leaf, the US assistant secretary for Near Eastern affairs, said on 31 May, during a Senate committee hearing, that the Biden administration was considering sanctions if a new president is not elected soon

    Outside pressure

    Only when a government has been formed will Lebanon be able to start initiating the series of reforms that the international community has demanded to unlock aid, grants and loans to try to put the country on the path to economic recovery.

    As Lebanon’s economic crisis has worsened and the security situation has declined, increasing pressure has been applied from other countries that want to try to restore stability in the region.

    Barbara Leaf, the US assistant secretary for Near Eastern affairs, said on 31 May, during a Senate committee hearing, that the Biden administration was considering sanctions if a new president is not elected soon.

    Separately, two members of the US House Foreign Affairs Committee called on the administration to impose sanctions on individuals involved in corruption to “make clear to Lebanon’s political class that the status quo is not acceptable”.

    In a letter to Secretary of State Antony Blinken on 30 May, they said: “We also call on the administration to continue pressing for full accountability for the August 2020 Beirut port blast and support independent, international investigatory efforts into egregious fraud and malfeasance by the governor of Lebanon’s central bank.

    They added: “We must not allow Lebanon to be held hostage by those looking to advance their own selfish interests.”

    French crackdown

    French officials have also taken action to try to crack down on perceived corruption by members of Lebanon’s political elite.

    In May, French prosecutors issued an arrest warrant for Lebanon’s central bank governor, Riad Salameh.

    The warrant followed Salameh’s failure to appear before French prosecutors to be questioned on corruption charges.

    In response, Salameh issued a statement saying that the arrest warrant violated the law.

    Salameh has been the target of a series of judicial investigations at home and abroad on allegations that include fraud, money laundering and illicit enrichment.

    European investigators looking into the fortune he has amassed during three decades in the job had scheduled a hearing in Paris for 16 May.

    A key problem is you still have the same cabal of oligarchs in power and it is likely they will still be represented in the next government
    Nicholas Blanford, Atlantic Council’s Middle East programmes

    Breaking the deadlock

    Analysts believe cracking down on corruption among Lebanon’s political elite is key to breaking the country’s political deadlock.

    “A key problem is that you still have the same cabal of oligarchs in power and it is likely that they will still be represented in the next government,” said Blanford. “These oligarchs do not want reform because if they implement a meaningful reform process, they run the risk of losing their positions of power.”

    While the country’s opposing political blocs continue to vie for power and the formation of a new government seemingly remains only possible after at least several months of negotiations, the outlook for Lebanon in the short term looks bleak.

    Meaningful government assistance for Lebanese citizens struggling with declining security and heightened economic pressures remains a distant prospect. High levels of emigration are also likely to continue as the country’s population seeks relief from the hardships at home.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/10907713/main.gif
    Wil Crisp
  • Saudi construction boom still in early stages

    5 June 2023

     

    Register for MEED’s guest programme 

    Construction activity associated with Saudi Arabia’s Vision 2030 and the kingdom’s gigaprojects is ramping up fast, but is still in the early stages.

    “MEED estimates that there are $879bn of projects planned, of which only about $50bn have been awarded so far,” said MEED’s head of content and research, Ed James, while opening MEED’s Saudi Giga Projects 2023 conference in Riyadh on 5 June.  

    While much work is still needed, progress is being made on projects with a step change in the total value of contracts awarded.

    “According to data from MEED Projects, the total value of contract awards in 2022 more than doubled compared to 2021,” said James. “In 2021, there was $11.9bn of contract awards, and in 2022 there was $24bn of awards.”

    The Saudi Giga Projects 2023 event has speakers from projects including Roshn, Diriyah Company, Red Sea Global, Boutique Group, King Salman Park Foundation, Sports Boulevard Foundation and the Royal Commission for AlUla.

    Saudi Giga Projects 2023 is followed by MEED’s Mena Construction Summit on 6 June, focusing on how the industry rises to the challenge of delivering projects amid unprecedented global demand and competition for resources.

    Companies speaking at the event include Al-Bawani Capital, Autodesk, Bechtel, Caldwell, Diriyah Company, Amana, DuBox, HKA, Jacobs, KEO Infrastructure, LITE Development & Consulting, Ministry of Investment Saudi Arabia (Misa), Mott MacDonald, MZ Engineering, Nesma & Partners, Oracle, Procore, Red Sea Global, Roshn, Parsons Saudi Arabia, Saudi Entertainment Ventures (Seven), Socotec and Thinkproject.

    Find out more about tomorrow’s event here.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/10913130/main.gif
    Colin Foreman