Dubai’s Road and Transport Authority is eyeing investment from the world’s largest economy to help fund a slew of massive infrastructure projects in the Gulf emirate.

Dubai metro. Burj Khalifa

The state agency said Wednesday it held meetings with 15 US firms to outline funding opportunities for billions-of-dirhams worth of rail, road and marine projects.

“These projects open up new windows for companies to bid for RTA tenders,” said chairman Mattar Al Tayer, adding that the agency is in talks to introduce a model for public private partnerships (PPP.)

“[They] prompt the private sector to take the initiative in bearing the costs of constructing such projects against… their revenues during the validity of the contract.”

The RTA is tasked with ensuring Dubai’s infrastructure keeps pace with the emirate’s rapid growth. The state-backed agency saw a number of projects slow after the financial crisis, as funding dried up and it struggled to pay trade creditors.

Work stalled on big-ticket projects including Dubai Metro’s Green Line and the Al Sufouh Tram, over complaints of non-payment from contractors.

The RTA said in January it would seek funding for nearly a third of its infrastructure schemes over the next five years in a bid to spread the risk and cost of large projects.

“It’s an international trend that you the get private sector more involved,” said the agency’s CEO for strategy and corporate governance, Abdul Younes, on Wednesday.

“It [allows us] to continue with our future projects and provides funding to deliver those projects. But funding is not the only part.”

Dubai has been in the spotlight over its debt woes since late-2009, as it has struggled to rebuild investor confidence after state-owned Dubai World announced a $26bn restructuring.

The emirate’s government-related entities can pay down or refinance nearly $14bn in debt maturing next year with relative ease, JP Morgan said in a research note earlier in the month.

Economic zone Jebel Ali Free Zone (JAFZA) and Dubai International Financial Centre Investments (DIFCI) have $1.25bn and $2bn respectively in debts maturing next year.

Simon Williams, chief economist at HSBC in the MENA region, said Arab governments were looking further afield for project financing as Europe’s debt crisis curtails lending in the region.

“I would be surprised if it was just American companies, I imagine [the RTA] will be looking more broadly,” he said.

“It will be about drawing in expertise but also accessing long term funding in a global environment like this, where accessing finance, even for core infrastructure projects is difficult.” More info

Dubai metro video, 8. Feb 2010

Source:  www.youtube.com

Contracts for the GCC rail project are expected to be awarded in December this year while the $15.5 billion (Dh56.93bn) project is set to be fully operational by as early as 2016, a senior official said.

Dubai metro

The regional railway, according to Dr Ramiz Al Assar, Senior Chief Representative, GCC Secretariat General, and senior transport specialist at the World Bank, was declared commercially and financially feasible by all the member states last month.

The project is now in the implementation phase. The GCC Secretary General office is now long listing consulting firms for the detailed engineering design and is expected to finalise the request for proposal and terms of reference next month.

Thereafter the secretariat would short-list consulting firms in November and award the contracts in December.

“We plan to award the contracts at the end of this year or very early next year,” Al Assar told Emirates Business on the sidelines of the Rail Infrastructure Middle East 2010. “We will go through the international competitive bidding process, long list consulting firms, then do some prequalification and short listing. The dates are tentative but we hope to award in the shortest period.”

The GCC Secretariat General office will also study the formation of a GCC railway authority and is planning to award contracts related to this in July.

“With regard to the formation of the GCC railway authority, the Secretariat General has completed the feasibility the study and we expect to conclude this within six to eight months and we hope that it would be endorsed at the next 31st GCC summit in Abu Dhabi in December,” Al Assar said.

Ibrahim Al Sabti, Director of Transportation Department at GCC, said the secretariat is looking at awarding the contract to one or two companies. “We will try our best to select the best consulting firm to do the detailed engineering design,” he said. “We have done the economical and financial study and now we’ll go to phase two, which is preparing the detailed engineering design. Probably it could be one company where they will form a joint venture or some type of consortium, but probably it will be one or two.”

Al Assar said the project is “too big” to be awarded to one consultant or one contractor. “It is important to look how to integrate several consultants working in the member states during the design and also when the project goes into construction,” he added.

Construction costs

Al Assar said each member state will pay the capital cost based on the length of the railway in that country.

The rail has a total length of 2,177km with Saudi Arabia (695km) and the UAE (684) having the longest lines. The costs that the kingdom and the Emirates are expected to bear are $3.8bn and $4.4bn, respectively. Oman with 306km will shoulder $2.8bn, Bahrain with 64km will bear $2.7bn and Kuwait with 145km will shoulder $1bn.

Currently, commitments of more than $7bn, or 1,274km, have been made, therefore the amount that would have to be raised by the GCC national railways will only be in the range of $8.3bn.

“There’s about 1,300km of GCC railway already committed, and that will further strengthen the implementation,” Al Assar said. “These countries will do this 1,300km whether there’s a GCC link or not, so you only have an additional link of about 1,000km and that translates to about $10bn.”

Only 903km will have to be added to the existing or planned projects, equating to $8.3bn capital cost – Saudi Arabia with 515km ($3.4bn), Bahrain with 64km ($2.7bn), Kuwait with 145km ($1bn), Oman with 80km ($700 million), Qatar with 83km ($300m) and the UAE with 16km ($200m).

“These mega transport projects are never financially viable in a sense of returning money to the government,” Al Assar said. “They are public service offerings, which means this will be subsidised. The governments will pay the initial capital infrastructure cost and maybe even buy the rolling stock like in the case of North South railway.”

Al Sabti said: “You start the project even if it is not feasible, but economically it is because you reduce pollution, road accidents, road maintenance and all these make the investment worth it. At the beginning, yes, there will be subsidy, probably in the first six or seven years.”

Private sector

The private sector will only have a role to play once the project is commissioned.

“The final form of the project will be in the shape of concession to the private sector. It is financially feasible for them to come and invest. We are hoping that international firms will invest in our area… this will happen probably by the end of 2016,” Al Sabti said.

“The concession is for operations and maintenance,” Al Assar said. “Maybe there will not be an ongoing or continuing annual subsidy or it will be on a decreasing basis that eventually the government will give you the infrastructure and you operate and maintain it as a stand alone.”

But the area in which the private sector can participate can still be broadened, Al Assar said. “We’re still discussing how the private sector can participate,” he said. “Although a decision has been made to move the detailed engineering and design there’s still room to be able to manoeuvre or explore options for the private sector.”

Speed upgrade

The GCC Secretariat General office is looking at upgrading the speed of the railway project to 350km from the currently planned 200km per hour.

The decision, which is expected to be taken by the end of this year, will increase the cost estimates of the project to $25.6bn, or 65 per cent higher than the current estimates. The faster train will not only be more expensive in terms of capital cost it will also be more costly in terms of operational cost as it will be run on electricity.

Power, generated usually by gas, is deemed more expensive due to shortage of sources. Qatar is the only gas-rich country in the six-country group and most of its supplies are locked up by a moratorium study.

A number of states such as Saudi Arabia, Kuwait and some emirates in the UAE are already experiencing power shortages due to a dearth of gas contracts.

“The project is currently estimated at $15.5bn if we use diesel. But if we plan to go for electricity it will cost us more than $25bn,” Al Sabti said.

“It is an option we are currently looking at and hopefully the decision will come this year. The implementation will take a while,” Al Assar said.

When deemed feasible by the member states, the study will go through their respective ministries of transport and finance before it lands with the joint ministerial committee between the ministries of finance and foreign affairs. Once approved, it will go to the GCC summit.

“When you talk about the cycle at least one year is required to evolve,” Al Assar said. “The money to be spent on upgrading the speed is actually an opportunity cost, which you can spend on other sectors such as education and healthcare.”

The 200km per hour train will be pushed through while the upgrade may be taken in the mid or long term once the passenger volume picks up, he said.

“In my opinion, in the short term the 350km per hour proposal may not happen unless it becomes a political decision,” Al Assar said.

“The decision to go for 200km per hour is an educated decision based on thorough feasibility. It is not an arbitrary study because of politics. It is based on forecast volume while the 350km per hour proposal only has to do with the passenger traffic and it can only be implemented when the heads of the member states see some benefit or potential for having that,” he added.

National railways

Contracts regarding the Dh16 billion Emirates railway project are expected to be awarded by the end of this year, a senior official said.

“I would say by the end of this year you are going to see the awards in the market,” said Bassam Mansour, expert Trains and Railway Systems, UAE National Transport Authority. “Most of the UAE railway is part of the GCC railway section,” he said. “Majority of the works are within the UAE, accommodating all the interconnection in Abu Dhabi and the Northern Emirates.”

Mansour said operations will start in 2016. World Bank estimates the UAE will contribute 31 per cent of the total length and 28 per cent of the total cost of the GCC rail project.

“We are trying to develop the UAE railway regulations and standards,” said Mansour.

Meanwhile, other GCC countries are also planning rail projects. Oman has appointed consultants to conduct a feasibility study of a 200km railway network that will begin in Sohar and extend to Duqum.

Kuwait has put forth plans of a $132bn model city, which will include a railway system, with an investment of more than $11bn.

Qatar will also see a series of railway projects over the next 10 years. Qatari Diar Real Estate Investment Company, in partnership with Germany’s Deutsche Bahn, has developed a conceptual railway design.

DUBAI — The Rail Agency in the emirate is exploring the expansion of its rail project up to 2030 over and above the existing projects of Dubai Metro and Sufouh Tram.

Dubai metro

“Trains are among the best transport modes as they minimise the environmental pollution and conserve the environment as much as threefold (compared to other) vehicles and aircraft,” Mohammed Al Ruwaished, Director of Quality, Health, Safety and Environment Department at the Rail Agency of Roads and Transport Authority (RTA), said.

The plan was stated during the RTA’s announcement of its environmental and sustainability work plan 2010, which aims at curbing pollution and conserving the environment.

“Rail Agency has based its environmental and sustainability work plan 2010 on two key axes,” Al Ruwaished said.

“The first one is implementation and application of the environmental management system across the Rail Agency through compliance with the international environmental standards.

“The second one is sustainability of environmental enforcement and audit, which is viewed as an extension 
of the international environmental standards as well as a strategic goal of the RTA.”

Standards of green buildings and sustainability will govern all future rail projects in Dubai. More emphasis is also laid on minimising the waste of building projects, and methods of saving power and water consumption.

Environmental aspects such as noise and air pollution and vibrations during the construction phase will also be looked into.

“There are environmental stipulations which we have to comply with such as not to exceed the noise levels permissible in the emirate of Dubai as monitored by the enforcement systems in place,” he said.

“The agency is also observing other stipulations such as dust control, introducing preventive measures to prevent the blowing of dust, and safe disposal of waste resulting from construction of rail projects.”

The RTA is conduction a monthly audit and inspection ensuring the minimum effect and impact on the environment and community.

“The department pays serious attention to tracking public complaints and taking instant measures in their response, particularly those related to high noise and ground vibration levels resulting from rail project activities,” Al Ruwaished said.

afshan@khaleejtimes.com

More than $100 billion will be spent in the coming years on massive rail projects that are coming up in the Middle East, according to a report.

Dubai metro

These projects include the Dubai Metro system, Abu Dhabi’s Surface Transport Master Plan, Saudi’s Haramain high-speed rail link, the Saudi Landbridge, Bahrain’s rail line and Egypt’s rail upgrade programme, said a report by IQPC Middle East, the organisers of ‘Rail Infrastructure Middle East 2010.’

A major event in the region, ‘Rail Infrastructure Middle East 2010, will run from January 17 to 20 at the Shangri La Hotel in Dubai.

The four-day event will attract industry experts from across the globe who will gather to hear updates and share strategies on some of the world’s most talked about rail projects, the IQPC said.

With almost every country in the Middle East announcing plans for infrastructure investment, rail experts from across the world are fleeing to the region to ensure they are involved in these ground-breaking projects, the company said.

Rail Infrastructure will act as a forum for some of the most topical issues facing the industry right now, by providing practical case studies and exclusive presentations from industry experts. The IQPC will provide an essential stage for municipalities, contractors and consultants at the forum.

The speakers lineup is led by Jaber Ali R. Al-Mohannadi, general manger of the Qatar-Bahrain Causeway Foundation, who will be joined by experts Mahmoud Al-Khazaleh, director general, Jordan Hejaz Railway, Bassam Mansour, expert on Trains and Railway Systems, National Transport Authority and many other governmental decision makers, the IQPC said.

TradeArabia News Service

Abu Dhabi: Structuring and finance procurement are the main challenges facing Gulf rail projects, industry heads concluded at the first session of a regional rail conference held on Monday.

In order to speed implementation of planned rail projects in the Gulf Cooperation Council (GCC), including a $20-$25 billion (Dh74-Dh92 billion) track linking all six member states, governments are being forced to assume more of the risk and use public funds to finance these projects.

Countries that have tried to use a full public-private-partnership model, such as Saudi Arabia, have had to assume more control of their projects because of the lack of historical transportation data which would be used by lenders to assess risk.

Reliable data

“If you want to do it correctly, you have to have reliable historical data on traffic patterns, people and cargo movement,” Frank Beckers, head of the Middle East, Africa and Asia Project and Capital Advisory unit at Deutsche Bank, said during a panel discussion at MEED’s Middle East Rail Projects 2009 conference.

“If you don’t have those numbers, it’s very much like looking into a crystal ball because you have to predict how much is going to be taken away from other transportation modes,” he added.

Sufficient funds

But a project structure in which a government regulator assumes more of the risk may not necessarily be a bad option for GCC countries as their governments hold sufficient funds to see their projects to profitability in the long term.

Joss Dare, a partner at Ashurst, a legal consultancy which served as an adviser on the Dubai Metro project, said more government control of rail projects means speedy implementation and avoidance of conflicts that may result from conflicts of interest between the designing, construction and operation and maintenance companies.

“One of the challenges is making sure you’re continuing the build process in a safe and timely manor,” Dare said of the ongoing construction of Dubai Metro’s Red and Green lines.

“And it’s a challenge I think [the Dubai government] is meeting very well.”

GCC countries have announced rail projects worth more than $100 billion including high speed train lines and light and heavy city metro systems.

Abu Dhabi: The Gulf Cooperation Council (GCC) countries’ proactive approach to building railroad networks, whose estimated cost is more than $60 billion (Dh220 billion), will help boost cross-border trade, cut freight costs and result in faster movement of cargo and passengers, experts have said.

Dubai Metro seems to be a precursor to GCC-wide railway developments. The long-awaited Gulf network is expected to start in 2010 or 2011. Image Credit: Gulf News

“Rail is safer, faster, cleaner and [a] more economical mode of transportation. Strong logistics networks encourage trade and provide industry with a competitive advantage,” Hussain Al Nowais, chairman of the UAE’s newly created Union Railway Company, told delegates at a rail conference organised by Meed.

Construction of the long-awaited rail network that will link the six members of the GCC is expected to start in 2010 or 2011. The cost will be shared among the six Gulf states — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

In the UAE, the Union Railway Company has estimated it will cost up to Dh30 billion to build a countrywide network of railways by 2016, with a track length of almost 1,400km.

In Dubai, the cost of building the Metro stood at Dh28 billion for the two lines.

If everything proceeds smoothly, the GCC railway network, stretching 2,000km from the Kuwait-Iraq border to Oman, will come online in 2017.

Strategic location

Union Railway leverages the strategic location of the UAE. It aims to connect the UAE to Oman and Saudi Arabia — connecting to Sohar in Oman through Al Ain, and connecting to Fujairah in the Eastern region.

It will offer two routes that provide alternative access to the Indian Ocean. The railway will also connect to Saudi Arabia through the Guweifat border and greater GCC and Mena regions.

Union Railway expects to transport 30 million tonnes of bulk and break bulk by 2015. At present, rail transport in Saudi Arabia is managed by the Saudi Railway Organisation, which provides freight services on three main lines totalling 1,018km. There are plans to extend the network to the Red Sea port of Jeddah and eventually, to the borders of Jordan, Yemen, and perhaps all the way to Egypt.

Alstom: Dubai Tram contract

French engineer Alstom said it is in talks for a five-year contract to maintain a 550 million euro (Dh2.9 billion) tram system in Dubai. It added that it is close to signing a high-speed rail project deal in Morocco.

Marc Chagnas, vice president of business development for transport in south Europe, said Alstom was also chasing a tender for a multi-billion dollar high speed rail linking Jeddah with Makkah and Madinah in Saudi Arabia.

—Reuters

Liberal Democrat leader Nick Clegg was given a tour of an award-winning Melksham firm as part of a whistlestop visit to Wiltshire.

Vince Cable and Nick Clegg with Adie Webb, operations manager

Mr Clegg is the second high profile guest to visit Knorr Bremse Rail Systems (KBRS), in Westinghouse Way, Bowerhill, after the Duchess of Cornwall was guest of honour in July, to present the firm with a prestigious Queen’s Award.

Mr Clegg was joined on Thursday by deputy leader and shadow chancellor Vince Cable and local prospective MP Duncan Hames, as they toured the building and learnt about how KBRS, which supplies and develops equipment for the rail industry worldwide, is thriving despite the current economic dowturn.

The firm is managing to buck the recession due to securing multi-million pound contracts mainly in China and the Middle East, for both its braking systems and platform doors.

It has just completed a project to supply and kit out the Dubai metro system with 1,100 platform door sets, as well as the braking systems on 87 brand-new trains, along with other products.

It is now about to embark on its biggest ever contract for 1,800 platform doors in Mecca, Saudi Arabia, which has to be completed by September 2010 in time for the Muslim festival of Hajj in the November.

The Lib Dem politicians, who were promoting their green recession-busting policies, visited the production hall of the building, which was opened after a £10 million revamp in 2005.

They were then introduced to employees by managing director Paul Goodhand.

Mr Clegg said: “The Knorr-Bremse facility is immensely impressive. The people here are highly skilled and specialised and are working in a modern, clean and open environment.

“This is an example of exactly the kind of company that we need going forward in this country.

“We need to move away from the reliance we’ve had in the past on financial services and concentrate on supporting a modern manufacturing base, companies such as Knorr-Bremse who, in addition to developing and exporting products and systems around the world are supporting their local community and economy.”

Mr Clegg said the Lib Dems are keen supporters of rail as a green and environmentally sound transport.

KBRS evolved from Westinghouse Brake and Signals, which was based in Chippenham before it split into Westinghouse Signals and Westinghouse Brakes.

In 2000, Westinghouse Brakes was sold to Knorr-Bremse, one of the world’s largest brake manufacturers and became KBRS, before moving to their purpose-built Bowerhill plant in 2005 Earlier this year, KBRS was awarded the Queen’s Award for Industry in the Innovation category for their EP2002 Distributed Brake control system.

The EP2002, which is a specially designed braking system that uses software to help the brakes adapt to different conditions, was designed and manufactured at the west Wiltshire plant.

It is in service on metro trains around the world, incuding the London Underground and the new Dubai metro, which just opened.

The estimated cost of the Gulf rail network has rocketed from the initial $14 billion (Dh51.4bn) to between $20bn and $25bn, a senior official has revealed.

The increase is the result of improvements to the specifications ordered by the rulers of the GCC member-states, said Mohammed Obaid Al Mazrouie, the organisation’s Assistant Secretary-General for Economic Affairs. He added: “The GCC leaders demand very high standards.”

The project will link the six GCC countries.

Al Mazrouie said the costs that will be shared by each state had been calculated, and Saudi Arabia and the UAE would pay the most because the largest parts of the network would be built on their territory.

A major study into the project has just been launched by the member states. “An international partnership has been asked to compile the study and work on it began a few days ago,” Al Mazrouie said, while speaking on the sidelines of the 33rd meeting of the Council of Governors of Arab Central Banks and Monetary Agencies.

Al Mazrouie said a technical committee had recently been formed to prepare for the construction of the railway. If the project proceeded the trains should start running in 2017.

Al Mazrouie highlighted the importance of member-states setting up local train services to boost the benefits of the GCC network.

Local train specifications should be compatible with those of the Gulf service.

He said the Dubai Metro was a major driving force behind the moves to establish a Gulf network.

“The Metro is a project that encourages the idea of the use of trains in GCC member-states. We believe the Gulf countries will benefit greatly from the example of the Metro as they set up similar projects.”

A new, automated rail system has begun operations in Dubai. The Red Line of the Dubai Metro is the first to open, with about 47 kilometers of track and 10 stations in operation. Each station is about a kilometer-and-a-half apart, and more stations are expected to open in the coming months for the Red Line and a separate Green Line.

An in-bound train arriving at the Mall of the Emirates station.

Below are some photos of the Dubai Metro taken Saturday, 12 September, the second day of operation. The weekend for most here is Friday plus Saturday for some. Both are big shopping days at the malls. Ten Metro stations on the Red Line were in business on the Friday opening day, with 19 others scheduled to open during the next few months as construction work is completed.

The attached photos were taken at two stations: Khalid Bin Al-Waleed, a ten-minute walk from my apartment, and at Mall of the Emirates station. Also included are some photos taken inside the trains and of various sights along the way from the elevated tracks. Khalid Bin Al-Waleed Station (locally-known as Bank Street) is the first underground station going in-bound toward Deira (central Dubai). Outbound from Khalid Bin Al-Waleed, the line emerges from the ground and remains elevated the remaining 38-kilometers to its southern terminus at Jebel Ali.

The opening day crowd at Khalid Bin Al-Waleed station.

Opening day (Friday) was like going to a rock concert. Khalid Bin Al-Waleed station was jam-packed so I ventured in only far enough to take some photos of the opening day crowd. The following afternoon, I headed back and bought my rechargeable plastic card with 50 Dirhams credit (about $14), enough for ten-roundtrip fares within the central fare zone (which includes most places I would ordinarily go to, including my office and Terminal 3 at DXB). The trains were crowded, but had no problem getting a standing spot next to a door so that I could take some photos along the way.

The exit stairway at the Mall of the Emirates station.

One of the open stations is at Mall of the Emirates (the one with the ski run), located 18-km south from Khalid Bin Al-Waleed. I rarely went to the Mall of the Emirates because of the traffic, plus once there, it could take twenty minutes to get parked in the gargantuan, but ever-crowded parking garage; plus another twenty minutes to get out of the place. Getting there by the Metro took just 15 minutes, though admittedly, the train just slowed down a bit while passing through a half-dozen unfinished stations, so the trip will probably take another ten minutes when all stations are operational.

On the subway platform at Khalid Bin Al-Waleed, with automated doors that lead to the driverless trains.

The Metro station at Mall of the Emirates is off to a busy start. It looks like about half of the riders got off here yesterday, passing through the tubular airport-like passageways (complete with moving walkways) directly into the mall. Inexperience was clearly in evidence as hundreds of riders were trying to go in and out of the same turnstiles, with security personnel not up to the job of sorting things out. The three operational turnstiles were simply not enough for the hundreds of people trying to push through in either direction; it looks like the design consultants didn’t get it quite right, though fortunately the station has space enough for more turnstiles.

A view from the pedestrian passageway at Mall of the Emirates station.

The trains run by the clock, leaving every seven minutes whether they are full or not. I think this has something to do with their being driverless, unlike manually-controlled subway trains in New York, where trains don’t leave the station until every last body squeezes through the doors. In fact, compared to New York, the Dubai Metro crowds were downright civil, even jovial, perhaps this being the latest new thing in Dubai. It will be interesting to see if that mood lasts, especially considering the reckless, anything-but-civil, driving on the roads, which is why I can’t wait for the Green Line to open next March, so I can ride the Metro to work.

Christopher Corbett is Senior Master Planner and Acting Head of Master Planning for AECOM’s Dubai office. This is the fourth time he’s worked in the Middle East. He was previously with the Planning Department in the Ministry of Municipal Affairs in Doha-Qatar 1995-1998; then with CH2M-Hill in Dubai 1998-2000; and then with GHD (an Australian engineering consultancy) in Doha-Qatar during 2002-2003. During 2005-06, he worked for CDM in Louisiana on FEMA-sponsored post-Katrina community recovery planning and during 2007 for same in Greensburg-KS following destruction of the town by a May 2007 tornado. He has a Master’s of Urban Planning from the Univ. of Washington in Seattle. His current USA home is San Francisco.