Saturday, December 23, 2017

GCC transport project value tops $392bn in 2017

Gulf countries continue to invest in transport projects to diversify the region’s $1.4 trillion economy and prepare for post-oil era, with the combined value of 1,424 active transport projects in the region crossing $392.2 billion in 2017, said a report.

Of these, 139 projects worth $207.5 billion involve the development of the railway sector - in bits and pieces - that will later be interconnected to the GCC railway system and create a region-wide rail network to help accelerate cross-border movement of goods, services and people, according to BNC Network, a leading project research and intelligence provider in the region.

However, the highest number of projects – 1,069 – are dedicated to roads and highways sector, with a combined value of $122.6 billion that will improve and expand the road networks across the region, stated BNC in its latest GCC Construction Analytics report.

As many as 100 projects with a combined value of $37.4 billion are in the aviation sector, mostly in aviation infrastructure projects. 

Saudi Arabia is developing a number of small airports to have them connected to the rest of the country as mobility among the GCC residents are growing, necessitating greater connectivity.

In the UAE, Al Maktoum International Airport also represents a significant portion of these projects.

Around 116 marine projects with a combined estimated value of $24.7 billion will also expand the region’s marine transport sector.

The GCC's transport sector constitutes 6 per cent of all active projects in the region and in dollar terms, these projects account for 16 per cent of the total estimated value, according to the report.

The relatively higher spending in the roads and transport infrastructure sector reflects a clear focus on economic diversification of the GCC countries where transport, logistics, trade and tourism will dominate the economic landscape in future.

BNC Network CEO Avin Gidwani said: "Relatively high investment in infrastructure clearly shows that the governments of the GCC countries are planning to reduce dependence on hydrocarbon and make their economies more sustainable by expanding and improving infrastructure that will help cross-border trade, tourism and public mobility that are essential for diversification."

The news of crude oil price bouncing back to the $65 per barrel level will help boost investor sentiment. Higher oil price means higher spending in infrastructure and if the current price stabilizes, we could see increased investment in roads and transport sector.

“Once completed, these projects will change the way people move within the region as well as the way goods are traded and transported from one country to the other,” remarked Gidwani.

In the third quarter of 2017, 15 projects with a combined estimated value of $2.08 billion were announced in the GCC's transport sector.

The number of projects announced in this sector increased by 25 per cent in the third quarter of 2017 as compared to the second quarter of 2017.

Notable projects announced in the third quarter in the GCC's transport sector include Expansion of Um Al Hassam Interchange project located in Manama, Bahrain, worth $1.2 billion; Haima to Thumrait Railway Line in Oman worth $400 million which is part of Oman Mineral Railway Line located in Muscat and Sea Taxi at Abhor located in Jeddah worth $150 million.

As many as 32 projects with a combined estimated value of $3.7 billion were awarded in the GCC's transport sector in the third quarter of 2017, while 60 projects with a combined estimated value of $6.64 billion were completed.

A total of 11 transport projects with a combined estimated value of $811.6 million moved to the construction stage from other stages last month, said the BNC report. 

The largest transport project in dollar terms to be awarded in November was Roads and Infrastructure Works for Al Salmi Road worth $620 million located in Al Salmiya, Kuwait.

A total of 32 transport projects with a combined estimated value of $1.4 billion were completed during November, it added.-TradeArabia News Service

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