GCC Roads and Railways Infrastructure Research Report

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GCC Roads and Railways

Published:11-April-2013
Number of Pages: 50
Number of tables: 17
Number of charts: 16

Seeking Alternative Transportation

The GCC has historically focused its transportation investments in building roadways, thus ensuring high quality roads across most of the region. Almost xx% of the roads in the GCC are paved roads; compare this high percentage to the average in other emerging countries, which is below xx%.

Though the quality of roads is significantly better than other emerging markets, there is concern over the current capacity. The increase in both population and propensity to purchase an automobile has led to clogged roads across most of the major GCC cities. Currently, the majority of the GCC rank high in terms of traffic density as indicated by the number of automobiles per kilometer of road. Oman and Saudi Arabia also rank high in terms of road fatalities. Conversely, the region ranks low on a comparative scale in road density as indicated by the aggregate kilometers of road to the total area of the country.

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GCC Roads and Railways Infrastructure Research Report

  1. 1. Markaz Infrastructure Report 2013 GCC Roads & Railways Seeking Alternative Transportation Research Highlights: Examining and analyzing the status of GCC Roads & Railways Sector highlighting the demand, supply and investment trends. The report also presents growth drivers and key learning points.
  2. 2. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways – April 2013 Kuwait Financial Centre K.P.S.C. “Markaz” 2 Disclaimer This report has been prepared and issued by Kuwait Financial Centre K.P.S.C (Markaz), which is regulated by the Capital Markets Authority and the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report cannot be quoted without the prior written consent of Markaz. . Any user after obtaining Markaz permission to use this report must clearly mention the source as “Markaz “. The report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but no representation or warranty, expressed or implied, is made that such information and data is accurate or complete, and therefore should not be relied upon as such. Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinion of Markaz and are subject to change without notice. Markaz has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. This report may not consider the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors are urged to seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and to understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Investors should be able and willing to accept a total or partial loss of their investment. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily indicative of future performance. Kuwait Financial Centre K.P.S.C (Markaz) may seek to do business, including investment banking deals, with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of Markaz, Markaz has not reviewed the linked site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to Markaz’s own website material) is provided solely for your convenience and information and the content of the linked site does not in any way form part of this document. Accessing such website or following such link through this report or Markaz’s website shall be at your own risk. For further information, please contact ‘Markaz’ at P.O. Box 23444, Safat 13095, Kuwait; Email: research@markaz.com ; Tel: 00965 1804800; Fax: 00965 22450647. Research Support M.R. Raghu CFA, FRM | Head of Research rmandagolathur@markaz.com Layla Al-Ammar | Assistant Manager Jenevivu Lasrado | Secretary, Research jlasrado@markaz.com Divya Karthik |Administration Manager Nael Aboul Huda | Manager, Media & Communications naboulhuda@markaz.com
  3. 3. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways – April 2013 Kuwait Financial Centre K.P.S.C. “Markaz” 3 Table of Contents 1. Executive Summary ....................................................................................... 5 2. GCC Roadways Sector.................................................................................... 6 Summary ................................................................................................................. 7 Saudi Road Sector ...................................................................................................12 UAE Road Sector .....................................................................................................16 Kuwait Road Sector .................................................................................................20 Oman Road Sector...................................................................................................22 Qatar Road Sector ...................................................................................................26 Bahrain Road Sector ................................................................................................28 3. GCC Railways Sector.................................................................................... 30 Summary ................................................................................................................30 GCC Railways ..........................................................................................................32 Financing ................................................................................................................33 Saudi Arabia Railways Sector....................................................................................34 UAE Railways Sector ................................................................................................39 Qatar, Kuwait, Bahrain and Oman.............................................................................41 Looking forward—Key Learning Points .............................................................. 43 Appendix 1: Top GCC Road and Railways Projects Value Wise ......................... 48
  4. 4. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways – April 2013 Kuwait Financial Centre K.P.S.C. “Markaz” 4 Tables Charts 1 Value of Projects at Planning Stage–GCC (US$ bn) 1 Road length in km 2 Value of road projects under execution in the GCC (US$bn), 2013 2 Motor vehicles/km of road 3 Value of planned investments in the GCC (US$ bn), 2014-17 3 Road density—km of road/square km land area 4 Budget evolution and road construction in Saudi Arabia 4 Road fatalities/100,000 population 5 Major projects under execution 5 Share of projects and country ranking value wise (US$ 000) 6 Cancellations/Delays/On Hold – Saudi Arabia 6 Share of planned projects and country ranking value wise (US$ bn), 2014-17 7 Major projects under execution in the UAE 7 Cumulative Road Network, Implemented by Ministry of Transport (000 km) 8 Kuwait- Major Projects under execution 8 Saudi Arabia roads 9 Major ongoing projects in Oman 9 Number of new driving licenses issued in Dubai (000s) 10 Qatar: Projects Under Execution 10 Cumulative length of asphalted road classified by type (km) 11 Projects Under Execution - Bahrain 11 Cumulative number of licenses issued (000s) 12 Railway projects at planning stage 2013–2030 (US$ bn) 12 Length of roads by type in km 13 Estimate of national cost for GCC railways (US$ bn) 13 Country wise project description (US$ bn) 14 Dubai Metro Lines 14 The proposed pan-GCC rail network (phases 1 and 2) 15 GCC rail projects under execution (2012–2022) 15 Passenger and cargo trend in Saudi Arabia 16 GCC Bridges and Causeways Projects under Execution 16 Expansion projects planned and currently executed 17 GCC Bridges and Causeways Projects under the planning phase
  5. 5. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways – April 2013 Kuwait Financial Centre K.P.S.C. “Markaz” 5 1. Executive Summary The GCC has historically focused its transportation investments in building roadways, thus ensuring high quality roads across most of the region. Almost xx% of the roads in the GCC are paved roads; compare this high percentage to the average in other emerging countries, which is below xx%. Though the quality of roads is significantly better than other emerging markets, there is concern over the current capacity. The increase in both population and propensity to purchase an automobile has led to clogged roads across most of the major GCC cities. Currently, the majority of the GCC rank high in terms of traffic density as indicated by the number of automobiles per kilometer of road. Oman and Saudi Arabia also rank high in terms of road fatalities. Conversely, the region ranks low on a comparative scale in road density as indicated by the aggregate kilometers of road to the total area of the country. This has led to a boom in the number of road projects currently being planned across the region. However, most of the GCC countries are looking at alternative forms of transportation to ease the strain on the roads. Rail is more energy- efficient than cars, buses, or trucks. It also saves on manpower and would help to enhance safety. Though requiring high investment initially, it has relatively low operations cost compared to other modes of transport. Dubai has spearheaded the GCC in unveiling phase I of its metro. Other countries are now planning or discussing their versions of the metro. They are also planning for a pan-GCC rail network. The updated value of this project is considered to be around US$xx billion.1 It will consist of a first rail line connecting all the GCC countries and Qatar via a bridge. The second line will stretch through Kuwait, Saudi Arabia, the UAE, and end in Oman. Rail will be an interesting option for travelers because the current preferred form of transportation in GCC is by road or by air. Currently GCC has US$xx billion worth of road projects and US$xx worth of railway projects at execution phase. Additionally, US$xx billion worth of bridges and causeways projects are also at execution phase. GCC also has significant 1 Frost & Sullivan, Feb 2011. Almost xx% of the roads in the GCC are paved roads. Dubai has spearheaded the GCC in unveiling phase I of its metro.
  6. 6. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways – April 2013 Kuwait Financial Centre K.P.S.C. “Markaz” 6 investments tied up in projects which are currently at planning phase. The total value of planned rail projects (rail, metro, tram, and stations) is estimated to be US$xxbillion between 2013 and 2030. For the roads sector, the total value of planned projects amount to almost US$xx billion (2014-17). GCC also has US$ xx billion worth of bridges and causeways projects under the planning phase for the period between 2016-18. Table 1: Value of Projects at Planning Stage–GCC (US$ bn). Country Road Rail Bridges and Causeways Saudi Arabia xx xx xx Oman xx xx xx UAE xx xx xx Bahrain xx xx xx Qatar xx xx xx Kuwait xx xx xx Total xx xx xx Source: Meed Projects GCC also has US$xxBn worth of bridges and causeways projects under the planning phase.
  7. 7. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways-April 2013
  8. 8. MARKAZ INFRASTRUCTURE RESEARCH GCC Roads & Railways – April 2013

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