The ambitious Gulf Co-operation Council railway scheme will run for 2,200km across the Middle East and is initially priced at £175bn, but procurement and securing an overall delivery body remain concerns.
Promoters of the Gulf Co-operation Council (GCC) railway, which will run across the Middle East, are more than aware of the challenges they face in delivering the massive, 2,200km long, $280bn-plus (£175bn) scheme.
“The railway development is the second largest in the world and the investment will go much higher than £175bn,” says Ramiz Al Assar, World Bank resident advisor to the Gulf Cooperation Council (GCC) secretariat general.
“The significant challenge is to complete the project substantially on time on budget. We know we are competing for the same resources,” he adds. “Resources are scarce; all the member states are competing for them; so maybe we need to work together to better manage the risks.
“One of the most critical issues - as in any major proiect - is procurement.”
The project proper dates back to 2009 when the GCC heads of state mandated to advance the GCC railway project; the governments of the members states agreed to pay the capital costs that relate to construction through their territories with a concession to be awarded to operate and maintain the line.
State Length of line (km)
Saudi Arabia 663
Back then it was expected that the full 2,200km long line would be operational by 2018, and officially that expectation has not changed. As Al Assar says: “The 2018 opening date is mandated.” But the reality is that the master procurement schedule is being reviewed.
At the moment the project still needs an overarching delivery body. “Fundamental to success is the formation of a GCC Railway Authority,” says Al Assar. “A study is underway.” The authority has to, among other things, get sign off on the precise route alignment, and hammer our interoperability issues and challenges around border crossings.
Al Assar is also well aware of the cost implications of pushing for a deadine. “We need to avoid fast-tracking projects as that leads to cost overruns,” he says. “We need to get out of that.”
But that’s not to say nothing is being done. Detailed design for £26.3bn of track capable of carrying diesel trains at up to 200km/h is being completed right now with construction due to commence in 2014/15.
Saudi Arabia has already started construction of 200km of railway, and awarded detailed design contracts for the remainder. The UAE meanwhile has built 120km of railway and is poised to award construction contracts for another 150km, says Al Assar. Qatar and Oman have awarded construction contracts for their first sections and Bahrain is expected to award its first contracts this year.
A feasibility study for a £2.6bn Bahrain to Saudi causeway link will be complete this year; while a similar study to link the entire railway to the Yemen border has already been completed.
So progress has been made. But there is much still to do, and Al Assar is well aware of the competition when it comes to getting good tenders. So he is determined to make the project attractive.
“We need to use international procurement guidelines, as selecting the lowest bidder is the single biggest reason for project over-runs and cost escalation.
“We are also aware that too many packages can delay progress. So it is important to look into the balance when dividing up packages to avoid excessive management costs,” he adds.
“And we will also need to focus on contractors’ approach to training and capacity building,” he says. “We need to progress implementation while building capacity for sustainable railway development.”