Transport links stitch GCC together
25 November 2024
This package also includes: Cooperation strengthens Gulf markets
Analysis
Colin Foreman
Editor
Transport projects connecting the GCC have made stuttering progress over the years, with brief periods of intense project positioning typically followed by years of little progress.
These projects are crucial for intra-GCC trade, and, once built, should provide a catalyst for further economic activity.
Since the Al-Ula Accords were signed in January 2021, projects have started to move forwards again, with schemes including the GCC railway network, the GCC grid, and several other road and causeway links at various stages of planning and construction.
GCC rail
For the GCC railway network, GCC leaders approved the establishment of the GCC Rail Authority in January 2022. The entity is entrusted with overall policymaking and coordination among member states to ensure the smooth delivery and operation of the scheme.
The railway will stretch over 2,177 kilometres (km), from Kuwait, through Dammam in Saudi Arabia, to Bahrain, with a causeway to be constructed between the two countries, and from Dammam to Qatar, Saudi Arabia, the UAE and finally to Muscat via Sohar in Oman.
There will be 684km of track in the UAE, 663km in Saudi Arabia, 306km in Oman, 283km in Qatar, 145km in Kuwait and 36km in Bahrain.
Passenger trains will run at 220 kilometres an hour (km/h), while freight trains will travel at 80-120km/h.
The project is expected to take a significant step forward this year with the award of the contract to prepare the operational plan study for the scheme. Speaking at the Global Rail event in Abu Dhabi on 8 October, sources told MEED that “the evaluation is in the final stages and the contract award is imminent”.
A source added that the General Secretariat of the Cooperation Council has set a deadline of 2030 for the project to be operational.
Several causeways are planned that will provide transport links between countries in the GCC. After stalling after 2010, Qatar and Bahrain have agreed to restart plans to develop the $4bn Qatar-Bahrain Causeway project. The two countries have also instructed the respective authorities to finalise plans for initiating the implementation of the project. The next step will be establishing a technical committee and appointing a consultancy to work on the designs.
The 40km-long causeway will connect the eastern coast of Bahrain to the northern region of Qatar. It will feature a dual two-lane highway and a rail link for the GCC rail network.
Once built, these transport projects should provide a catalyst for further economic activity
Construction on the project was originally scheduled to start in early 2009 after a consortium led by Vinci Construction Grands Projets signed a $3bn design-and-build contract in May 2008.
The consortium also included Qatari Diar Real Estate Investment Company, Germany’s Hochtief, Greece’s Consolidated Contractors Company and Belgium’s Deme Group.
The project was initially designed by France’s Lavigne & Cheron Architects. US-based consultant KBR was appointed as the project management consultant with support from Halcrow, which is now part of US-based Jacobs.
Further crossings
Another planned international crossing is the second causeway between Saudi Arabia and Bahrain. The $3.5bn project, which has been called the King Hamad Causeway project, was moving towards construction in 2021 when it was included in Bahrain’s $30bn Strategic Projects Plan. Since then progress has been slow, and it is understood that the authorities are re-evaluating how the project should move ahead.
The project involves building a 25km 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 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 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 annum over the past 10 years.
Another causeway being considered is a link connecting Abu Dhabi and Qatar. The proposed link could provide road and rail access between Qatar and the UAE, bypassing Saudi Arabia, located between the countries.
The concept has been considered before. There were plans in 2005 that involved building a 40km causeway starting near Sila in Abu Dhabi emirate and extending to the south of Doha.
In the past, there have been difficulties with the route because it runs across Saudi Arabian territorial waters.
Road links
Overland road links have also been built. In 2021, a 725km-long road running through the Empty Quarter from Saudi Arabia to Oman opened. The Saudi section of the highway is 564km long, and the Oman section runs for 161km. The highway provides a link between the two countries bypassing the UAE.
When it opened, the authorities added that the road would improve trade between Oman and Saudi Arabia and give Oman access to Saudi Arabia’s Red Sea Ports. Likewise, it gives Saudi Arabia access to Oman’s ports on the Arabian Sea.
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Heading into 2025, a spate of technological breakthroughs are set to fundamentally reshape industries worldwide, driving unprecedented innovation across critical sectors.
Cutting-edge developments in artificial intelligence (AI), renewable energy, digital currencies, transportation and healthcare are converging to create transformative opportunities, according to the Tech Predictions 2025 report by GlobalData Thematic Intelligence.
AI stands at the forefront of this technological revolution, with generative models and autonomous systems pushing the boundaries of what is possible.
Simultaneously, advancements in battery technology and mineral exploration are accelerating the global transition to sustainable energy solutions.
In the Middle East, these global technological trends are not just being adopted but actively amplified
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Regional priorities
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The region’s commitment to technological diversification is evident in its targeted investments across multiple sectors.
Global technology giants are establishing significant cloud and data centre infrastructure, while local initiatives in health tech, gaming and digital innovation are gaining international recognition.
These efforts collectively demonstrate the Middle East’s strategic vision to transform its economic landscape and establish a prominent role in the global digital economy.
By embracing these technological advancements, the region is not merely adapting to global trends, but actively shaping a more interconnected, sustainable and digitally sophisticated future.
ARTIFICIAL INTELLIGENCE
The global AI market is on a trajectory of major growth, with projections indicating it will surpass $1tn by the end of the decade.
Generative AI is emerging as a particularly transformative capability, promising to drive growth through unprecedented automation and a reimagining of traditional business models.
Another emerging trend is the increasing focus on small language models (SLMs), which offer greater cost-effectiveness, enhanced security and simplified management over their larger counterparts and are especially powerful in domain-specific applications.
Big tech firms such as Microsoft, Open AI and Amazon are well-positioned in both the generative AI and SLM spaces.
Looking ahead, the next technological frontier appears to be agentic AI – intelligent, autonomous systems that are capable of sophisticated multi-step reasoning and dynamic context adaptation. This holds immense potential and could revolutionise efficiency and customer experiences across diverse sectors.
Market winners will successfully develop and implement enterprise AI solutions while laggards risk obsolescence.
The Middle East is positioning itself as a global AI innovation hub, with countries including the UAE and Saudi Arabia investing heavily in areas such as AI governance, autonomous systems and smart city technologies.
Projects like Saudi Arabia’s Neom and Dubai’s smart city initiatives are integrating AI for urban management, enhancing infrastructure and optimising public services through real-time data analysis.
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The International Energy Agency estimates that data centre electricity consumption will hit 1,000 terawatt-hours by 2026, doubling from 2023 levels. To meet this rising demand sustainably, tech giants are turning to low-carbon energy solutions, including solar, wind, biofuel and nuclear power.
The Middle East data centre market is experiencing rapid growth, driven by increased digital adoption and internet access. The region’s data centre construction market is projected to reach $4.39bn by 2029, growing at a compound annual growth rate of 10.99%.
The UAE has the highest concentration of data centres, while Saudi Arabia is the fastest-growing regional market, attracting global players like Google and Huawei.
Sustainability initiatives are also gaining traction, with both countries aiming for significant renewable energy integration in their power mix.
Overall, the Middle East and North Africa region is poised for major investment in the development of data infrastructure.
The region’s data centre construction market is projected to reach $4.39bn by 2029
CYBERSECURITY
The cybersecurity landscape is undergoing a transformation, with the market projected to expand to $208.5bn by 2025, representing a 10% growth from $188.8bn in 2024.
This growth will be accompanied by increasingly sophisticated threats that leverage AI to create more complex and dangerous cyber attacks.
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Ransomware attacks continue to escalate, with criminals estimated to have extracted $1.1bn in ransom payments during 2023.
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CRYPTOCURRENCIES
The digital financial landscape is undergoing a transformation as cryptocurrencies are increasingly accepted by institutional investors as a mainstream asset.
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The anticipated regulatory approach suggests increased institutional interest and broader mainstream acceptance of cryptocurrency technologies.
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The Middle East is similarly emerging as a cryptocurrency hub, with Dubai leading in regulatory frameworks and blockchain innovation.
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HEALTH TECH
The healthcare industry stands on the cusp of a technological revolution, with AI and three-dimensional (3D) printing poised to transform medical care and patient outcomes.
AI is rapidly emerging as a game-changing technology in the fields of medical diagnostics and imaging.
Computer vision technologies are already demonstrating remarkable capabilities in assisting radiologists, enabling quicker and more precise identification of abnormalities in medical scans.
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Also emerging as a revolutionary technology in healthcare, 3D printing enables the production of highly personalised medical devices such as prosthetics and implants.
This technology promises to dramatically reduce production costs while providing customised solutions tailored to individual patient needs.
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Generative AI is poised to become a cornerstone of workplace innovation, capable of driving unprecedented levels of automation and business process optimisation.
The generative AI market is projected to reach $75.7bn by 2028, reflecting the huge potential of these intelligent systems to reshape organisational productivity and efficiency.
Hybrid working models are rapidly transitioning from experimental approaches to standard operational practices.
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Automation, AI, augmented reality, virtual reality and digital twin technologies are creating an urgent need for comprehensive workforce upskilling.
By 2025, proficiency in data management and generative AI tools will become an expected competency across various professional roles, not merely for technical positions.
Remote work and hybrid models are being embraced, driven by investments in digital infrastructure and upskilling initiatives. AI-driven human resources tools and collaboration platforms are helping to shape a more flexible and digitally enabled workforce in the Middle East.
GAMING
The gaming software industry is poised for significant growth, with projections indicating an expansion from $219bn in 2023 to $246bn by 2025, and an ambitious target of $337bn by 2030.
This trajectory is being driven by transformative technologies including AI, augmented reality, virtual reality, e-sports and cloud gaming.
Co-streaming is emerging as a revolutionary approach to content delivery in the increasingly popular field of e-sports, enabling several streamers to broadcast events simultaneously.
In 2024, content created by co-streamers demonstrated significantly higher engagement rates compared to official streams, a trend expected to continue gaining momentum in 2025. This innovative approach is reshaping audience interaction and creating new monetisation opportunities.
The boundaries between streaming platforms and social media are becoming increasingly blurred. Platforms such as Twitch and YouTube are integrating with social media applications such as TikTok and Instagram, enabling real-time interactions and creating enhanced monetisation channels.
This convergence represents a fundamental transformation in how gaming content is created, shared and consumed.
The Middle East is rapidly emerging as a significant gaming ecosystem, with substantial investments in e-sports, mobile gaming and local game development. Saudi Arabia, in particular, is positioning itself as a global gaming hub through strategic initiatives like the Savvy Gaming Group.
FUTURE MOBILITY
The future of mobility is poised for a radical transformation, driven by technological innovation and evolving societal needs. Emerging trends such as autonomous vehicles, electric mobility, shared transportation, electrification and enhanced connectivity are reshaping how people and goods will move in the coming years.
China is emerging as a global leader in both electric and autonomous vehicle technology, and in the case of the latter is positioning itself to be the first to deploy commercial Level 4 autonomous driving at scale.
Benefitting from supportive government policies and more relaxed regulatory environments, China is advancing faster than the US in autonomous vehicle development.
Breakthrough advances in battery technology are meanwhile set to unlock new frontiers in mobility, particularly for electric vertical take-off and landing (eVTOL) vehicles.
Innovations in lithium-ion and solid-state battery technologies are expected to make commercial eVTOL operations viable within the next 12-18 months. Solid-state batteries are particularly promising, offering superior energy efficiency, rapid charging capabilities and enhanced durability that could revolutionise aerial transportation.
The Middle East is likewise witnessing transformations in mobility that include the expansion of electric vehicles, autonomous transport pilots and innovative urban mobility solutions like smart public transit systems. Projects such as Neom in Saudi Arabia are setting the stage for futuristic transportation networks.
Autonomous vehicles and electric mobility are reshaping how people and goods will be transported
BATTERIES
The lithium-ion battery market is poised for substantial growth, with projections indicating an expansion from $130.5bn in 2023 to an impressive $408.3bn by 2035. This trajectory represents a consistent 10% annual growth rate, reflecting the increasing global demand for advanced energy storage solutions.
Lithium-ion batteries will maintain their technological supremacy, characterised by superior energy density and rapid charging capabilities. Simultaneously, sodium-ion batteries are emerging as an intriguing alternative, attracting significant investment.
Geopolitical complexities and potential mineral supply disruptions – particularly concerning lithium, nickel and cobalt – are anticipated to create temporary global battery shortages. Despite ongoing advances in recycling technologies, these supply-chain challenges will pose significant obstacles for manufacturers and consumers alike.
With the push for renewable energy and electric vehicles, the Middle East is exploring advanced battery technologies. Efforts are being made to localise battery production and establish strategic partnerships for energy storage solutions that are tailored to the region’s climatic conditions.
Morocco is planning to establish the region’s first battery gigafactory, with a planned capacity of 20 gigawatt-hours annually, focusing on electric vehicle batteries.
Meanwhile, Saudi Arabia is also establishing battery manufacturing capabilities to meet growing demand for lithium-ion batteries due to investments in renewable energy projects and EV adoption.
MINERALS
The global demand for critical minerals is experiencing an unprecedented surge, driven by ambitious net-zero targets and the rapid adoption of transformative energy transition technologies. Lithium, copper, nickel, cobalt and rare earth elements have become pivotal resources in the production of electric vehicles, solar panels and wind farms, creating significant pressure on mineral prices and global supply chains.
China’s historical monopoly on rare earth element production has gradually diminished, with its market share dropping from a near-total 97% in 2010 to approximately 70% today.
While other nations are pursuing diversification strategies, China remains a dominant force in both rare earth element production and refinement, maintaining substantial control over this critical market segment.
Latin America is emerging as a crucial player in the critical minerals landscape. Countries like Argentina, Bolivia and Chile boast extensive lithium reserves, while Brasil holds the world’s third-largest rare earth element reserves. This geological wealth positions the region as a potential game-changer in global mineral supply.
The Middle East region’s focus on economic diversification has likewise spurred interest in mining critical minerals. Significant mining projects are under way, including copper and gold projects in Oman and expansions of existing gold mines in Saudi Arabia.
There is a regional race to secure lithium deposits and access to other rare earth elements necessary for the technology and energy sectors.
GLOBALDATA REPORTS
This article was written by GlobalData Thematic Intelligence. Click here to see more thematic research.
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Saudi Arabia retenders Shoaiba 6 water contract
20 December 2024
Saudi Water Authority (SWA), the kingdom’s main producer of desalinated water, has retendered a contract to build a new water desalination plant on Saudi Arabia’s western coast, using reverse osmosis technology.
When the Shoaiba 6 seawater reverse osmosis (SWRO) plant was previously tendered, Jeddah-based Alfatah Water & Power offered the lowest bid for the contract.
The retendered contract indicates a capacity of between 500,000 cm/d and 545,000 cm/d.
SWA expects to receive bids for the retendered contract by 10 January 2025.
Shoaiba 6 is one of four contracts that SWA has tendered this year using an engineering, procurement, construction and commissioning (EPCC) contracting model.
The other three SWRO projects are Yanbu 5, Ras Al-Khair and Jubail.
VA Tech Wabag submitted the lowest bid for Yanbu 5 and won the $317m contract to build the plant in September. The plant will have the capacity to treat 300,000 cm/d of seawater.
However, on 16 December, SWA cancelled the contract and informed the bidders that it intended to recalibrate the plant’s capacity and issue a new tender over the coming weeks.
The Jubail and Ras Al-Khair SWRO projects will each have the capacity to treat 600,000 cm/d of seawater.
MEED recently reported that Najran-based Emar Al-Janoub for Contracting (EJC) had won the contract to build the Ras Al-Khair SWRO plant.
EJC offered SR2.346bn ($625.6m) to win the contract, seeing off competition from other bidders including the local Civil Works Company and Saudi Services for Electro Mechanic Works, and the Saudi branch of India’s VA Tech Wabag.
SWA is the world’s largest producer of desalinated water, with a capacity of at least 6.6 million cm/d. Plants using older and more energy-intensive techniques, such as multi-stage flash technology, account for the majority of the current capacity.
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