£70bn rail work in Gulf set to tempt UK firms

Nelson Ogunshakin

Gulf governments are investing more than £70bn in rail projects over the next 12 years in a move that will attract UK companies despite unprecedented political upheaval in the region, writes Michael Glackin.

Buoyed by another year of bumper oil revenues, the nations that comprise the Gulf Cooperation Council — Saudi Arabia, Bahrain, United Arab Emirates, Oman, Qatar and Kuwait — are using sovereign wealth funds to construct state-of-the-art rail systems.

A report released last month by research group Ventures Middle East said Qatar alone is investing more than £20bn in rail schemes ahead of the 2022 World Cup, including the Doha Metro project, which will create 98 stations in the city and 355km of track.

Qatar is also investing in railway links to Bahrain and Saudi Arabia as part of the £18bn Gulf Cooperation Council (GCC) railway project, which will link the six GCC nations by 2016.

Saudi Arabia has committed around £16bn to 23 rail projects including a Makkah to Madina high speed rail link worth £4bn, while Abu Dhabi is poised to be the biggest regional spender in public transport with a proposed investment of £40bn.

Despite the current political unrest across the Arab world, UK companies are keen to tap into the work.

Atkins is currently working on a number of Gulf rail schemes including carrying out preliminary work on the £7bn Etihad Union Railway project in the UAE. The consultant is also working on the £1bn Makkah Metro system, the first phase of which opened last year.

Julian Hill, Atkins regional head of rail, said: “We’re seeing large-scale infrastructure investment across the GCC states. We’ve vast experience on major rail and metro projects such as Dubai Metro, Qatar’s Lusail light railway, Makkah Metro and Etihad Rail, and hope to have a significant role in other similar projects.”

Carillion, which derives 21% of its total underlying operating profit from the Middle East, confirmed it was “looking at Middle East rail work” in light of the huge sums being invested.

Unveiling its full-year results in March Carillion said it expected to double its earnings in the Middle East to around £1bn over the next three to five years.

However, Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering, said companies should also be aware of the political upheaval in the region. “Firms need to be aware of certain risks. There is still fish in the water in terms of work in the region, but the current political upheaval also shows there could be some piranha in the water too,” he said.

UK Trade & Investments (UKTI) was due to hold a Q&A session on the implications for UK businesses of the continuing wave of political unrest across the Gulf region. Contributions were due from UK ambassadors to each of the GCC nations.