29 October 2004
Middle East Economic Digest
© 2004, Emap Communications. All rights reserved

REGIONAL

Regional network's route debated

The creation of a regional railway network moved a step closer to reality in late October following a meeting of GCC transport ministers in Kuwait. Approval was given for a feasibility study to be launched on the estimated $4,000 million-5,000 million project, which has a proposed route stretching more than 2,000 kilometres from Muscat in the south to the Kuwait/Iraq border in the north.

Under the proposed project schedule, terms of reference (TOR) for the one-year feasibility study contract will be released by the end of the year, with both local and international consultants invited to bid. Tenders for the project management and main works contracts will be issued in the second half of 2006. Total design and implementation is expected to take at least six years.

The feasibility study will involve traffic studies, the extrapolation of topographical and statistical data, the creation of a legal model and the formulation of a project financing framework. Options under consideration include both build-own-operate (BOO) and build-own-transfer (BOT) schemes as well as conventional financing.

The study will also decide on the project's route, two of which have already been proposed. The first runs from Muscat, through the UAE and Saudi Arabia before terminating in Kuwait. The other option includes incorporating both Qatar and Bahrain into the network. This route is more expensive, but has a higher rate of return.

The decision to go ahead with the project was based on the positive results of the preliminary study drawn up by Kuwait's Global Investment House together with the US' Parsons Brinckerhoff International.