Infrastructure Investment

Middle East: Rail Projects Right on Track

Forensic & Litigation Consulting

September 11, 2015

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Capital expenditure on rail projects in the Gulf Cooperation Council (GCC) countries is forecast to be in excess of USD$200 billion over the forthcoming years. This amounts to many thousands of kilometres of rail and metro tracks. All six of the GCC Member States have multibillion dollar mega projects either under construction or in the planning phase.

Per capita, the GCC is undergoing one of the biggest infrastructure spends in the world. For the majority of these countries, rail is a new mode of transport. This brings with it financial, regulatory and cultural challenges that need to be addressed.

The Strategy
Rail projects in the GCC States aim to satisfy both regional and local demands. Growth in the economies and populations of the GCC States since 2000 has led to an increase in interstate trade and movement of labour. This has placed a great strain on air, sea and land transport systems, despite massive investment in all three. Rail is seen as providing a viable and more environmentally friendly alternative for the movement of freight and passengers between states.

At a local level, as workers flocked to urban conurbations where trade is concentrated, traffic jams soon followed with an increase in road accidents. Today, certain GCC States have some of the highest road accident fatality rates in the world. Urban rail schemes were identified as being able to ease congestion and reduce accident rates.

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