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Train Linking Gulf States to Start Running in 2023

It is anticipated that a $15 billion train project linking Gulf Cooperation Council states will start operating in 2023.

Saudi Arabia, the United Arab Emirates and Oman will be linked by the first phase of the Gulf Railway Project, which is scheduled to be finalized that year.

The second phase linking Saudi Arabia, Kuwait and Bahrain is expected to be completed in 2025.

There was no mention of GCC member Qatar, which was included in the project when it was first announced in 2001 as a means to facilitate trading among Gulf states. For the past three years, however, it’s been boycotted by Saudi Arabia, the UAE and Bahrain.

The project has met hurdles on account of challenges with the financing of the project exacerbated by low oil prices, and lack of alignment of the interests of the six states involved. The expected date of completion of the project is uncertain, given the lack of clarity on the exact scale and operating model of the venture.

The Gulf Railway project was approved by GCC member states at the 30th GCC summit in Kuwait City in December 2009. Saudi Arabia was the only GCC country to have any railway infrastructure at the time the project was proposed. The original deadline to complete the project was 2018. This was postponed to 2021 at a meeting of GCC transport ministers in Riyadh in April 2016.

In November 2015, Saudi Railways Organization (SRO) President Mohamed Al Suwaiket stated that implementation of the GCC Railway had begun in Oman and the United Arab Emirates, and would begin in Saudi Arabia within two months. Qatar floated tenders for its portion of the Gulf Railway project in the summer of 2015, but later put the project on-hold.

In March 2016, Abdulla Al Subaie, managing director of Qatar Rail, stated that Qatar was ready to start work on the project but was waiting for other GCC countries to begin construction. In January 2016, Etihad Rail suspended the tendering process for Phase 2 of the UAE’s railway project, which includes the UAE’s portion of the Gulf Railway. UAE Minister for Infrastructure Development Abdullah Belhaif Al Nuaimi stated that the decision “was logical because you simply cannot build your part and wait for others to start”.

In May 2016, Oman announced that it was putting the project on-hold. Omani Minister of Transport Ahmed al-Futaisi said, “There was a challenge among countries in the pace at which the project was being implemented. Some countries started, but some others did not follow the design. So this was a challenge for Oman. Even if Oman finishes its part, it cannot connect because other countries have not started their work.”

He clarified that Oman “has not cancelled the project, only delayed it as other Gulf countries have decided to stop work on the project”. Oman subsequently focused on constructing its domestic rail network linking the ports of Salalah, Sohar and Duqm. Bahrain stated that it would not begin construction on its portion of the project linking with Saudi Arabia until 2023. The country intends to construct the link to Kuwait only after completing the Saudi link.

Futaisi and David Briginshaw, editor-in-chief of the International Railway Journal, have stated that the low price of oil and minerals that has resulted in budget deficits among GCC members is the primary reason hindering the project. Briginshaw said, “Low oil prices affect investment, and obviously [Oman’s] project is designed to take minerals to the coast, so if there isn’t demand it brings the whole project into question.” The project was first conceived during an era of high oil prices. Unlike the EU, the GCC is not economically integrated, and states act independently and pursue their own policies sometimes creating competing economic agendas.

Countries have chosen to give priority to their own domestic rail networks over the Gulf Railway, concerned that they may construct lines towards the border before their neighbor sufficiently completes work on their portion of the project. Other concerns hindering the project are visa issues for non-GCC nationals, illegal migration, smuggling, competing economic agendas and disagreements about where the lines should meet.

Helmut Scholze, partner at Roland Berger Middle East, believes the project is delayed due to the lack of clarity on when Saudi Arabia will build its portion of the network. Scholze states that without the Saudi portion, there was no point in UAE proceeding with it portion and even less incentive for Oman, as they would not gain access to Saudi Arabia (the region’s largest market) and the other GCC countries.

Scholze feels this has resulted in UAE and Oman focusing on constructing domestic rail networks to reduce road traffic and transport goods. Despite the delays, Scholze believes the project will be completed. Construction Week Online cited a rail industry source who also believed the project would be completed. However, the anonymous source felt that the “earliest [completion date] will be 2025 but, if you look at it realistically, the most likely completion date will be 2030”.

At the 37th GCC summit in Bahrain in December 2016, the GCC Supreme Council stressed the importance of members being committed to the railway project. At the request of Saudi King Salman, the Council decided to send the draft project to the economic and development commission to ensure timely implementation. Saudi Minister of Transport Sulaiman al-Hamdan stated that “a large part of this project in Saudi Arabia has been completed”.

On 28 February 2017, Abdulla S. Al Katheeri, director-general of the UAE’s Federal Transport Authority (FTA) – Land and Maritime, stated that the GCC could meet the 2021 deadline for the project despite fluctuating oil prices. Katheeri pointed out that the total value of proposed rail projects in the GCC was over $240 billion, and $69 billion worth of projects were currently under construction. At the Middle East Rail 2017 conference and exhibition in Dubai on 7 March 2017, GCC Secretary General Abdullatif Al-Zayani stated that the Gulf Railway was necessary to ensure sustained development in the region.

He also noted that consensus to complete the project had been established at previous GCC meetings. At the same event President of Saudi Arabia’s Public Transport Authority and of the SRO, Rumaih Al Rumaih announced that the GCC had begun conducting a feasibility study to establish a GCC regional rail authority.

In April 2017, Secretary General of the Federation of GCC Chambers Abdul Rahim Al Naqi stated that Saudi Arabia, the UAE, and Oman had made considerable progress in implementing the project. He also confirmed that Bahrain had appointed an international company to execute the project. Naqi clarified that the first phase was for all countries to develop rail connectivity between cities domestically, and then establish cross-border links with other GCC states.

 Naqi stated that the project in Kuwait was delayed by infrastructural and technical issues. Kuwait authorities encountered issues acquiring farms and other private property along the proposed route, and also had difficulty ensuring that the route did not conflict with oil facilities. He stated that construction of the project in Kuwait would begin in 2018, and complete by 2020. Kuwait began construction of 111-km railway line connecting with Nuwaiseb on the Saudi border in August 2018.

The UAE section of the project received a boost on 27 November 2018 when the UAE Ministry of Finance and the Abu Dhabi Department of Finance signed an agreement to fund Phase 2 of the country’s rail network comprising a 605 kilometer line from Ghuweifat on the border with Saudi Arabia to Fujairah.