Law SIMMONS & SIMMONS
OPPORTUNITIES FOR UK RAIL BUSINESSES IN THE MIDDLE EAST: THE GCC RAILWAY PROJECT
PROJECT INFORMATION
The project aims to create a new rail
network of over 2000km linking the Gulf Co- operation Council (GCC) member states of Saudi Arabia, the United Arab Emirates (UAE), Qatar, Oman, Bahrain and Kuwait.
The project is at its most developed in the UAE, where Etihad Rail has already begun construction of the first phase of its section of the network (which is being carried out by a consortium led by Italy’s Sapiem)
The aspiration is for the GCC network to be operational by 2017.
28 RailCONNECT
Words: Juliet Reingold (Head of the Energy & Infrastructure Sector) Partner, Simmons & Simmons LLP, London
juliet.reingold@
simmons-simmons.com
Rachel Scott (Managing Associate) Simmons & Simmons LLP, London
rachel.scott@
simmons-simmons.com
s the UK and other European rail markets mature, opportunities are opening up in other areas of the world where large new rail projects are being developed. One such project is the GCC railway in the Middle East: this is a ‘mega-project’ to connect six states in the Gulf, offering huge opportunities to tender for UK rail industry businesses, as well as presenting some interesting challenges.
A Background
The project aims to create a new rail network of over 2000km linking the Gulf Co-operation Council (GCC) member states of Saudi Arabia, the United Arab Emirates (UAE), Qatar, Oman, Bahrain and Kuwait. The network will run from the Iraq-Kuwait border to Oman, passing through Saudi Arabia, Bahrain, Qatar and UAE, with the possibility of extending the network into Yemen. It will be a single track, mixed-use network for both passenger and freight. In conjunction with developing the GCC rail network, many of the GCC states are also planning to develop national rail networks. The aspiration is for the GCC network to be operational by 2017.
Current status
The project was given the go-ahead following the conclusion of a 2009 feasibility study. Since then, steps have been taken to get the project underway in each of the GCC member states.
Kuwait is currently at the early stages of developing a national railway network which will link to the GCC network. Saudi Arabia and Bahrain have both approved the project and have recently agreed on the construction of the rail link to be built between their two
countries. It is planned that the engineering designs for this part of the network will be completed in late 2012. The project is at its most developed in the UAE, where Etihad Rail has already begun construction of the first phase of its section of the network (which is being carried out by a consortium led by Italy’s Sapiem) and plans are well under way for the second and third phases, that will link its coastal ports and urban areas. Plans are also under way in Qatar and in Oman, which has issued a tender for design consultancy services.
Opportunities
The planned size of the network will create a huge demand for services in all areas of the rail industry. There is very little ‘local’ rail industry in the Middle East at present, creating opportunities for UK rail businesses interested in expanding into new markets.
Key areas of opportunity include:
• Strategy: With the exception of Saudi Arabia, none of the GCC member states has an existing national rail network, so member states are likely to have a continuing need for strategic advice drawn from countries with well established rail industries such as the UK.
• Design, construction and engineering: The project will create many opportunities in these sectors as, at this stage, only a small section of network in the UAE has been constructed. As this is a new-build railway, opportunities will arise in all parts of the railway design and construction industry, from track, bridges and tunnelling through to stations, depots and other associated facilities.
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