Transport

Mega Mecca finally gets airport

Saudi Arabia's legislature has approved plans to build an international airport outside Islam's holiest city in an effort to cater to more than two million pilgrims who visit the city each year. The Shura Council, Saudi Arabia's advisory legislature appointed by the king, unanimously approved the airport. It was part of a proposal in the General Authority for Civil Aviation's annual report to the body. Since only Muslims are permitted to enter Mecca, the council recommended that the new airport be located outside the city center, so as to allow both Muslims and non-Muslims to fly into the region. The new airport is part of a Saudi government decision to end decades of underinvestment by allocating tens of billions of dollars to improve the kingdom’s transportation infrastructure so more Muslim tourists vacation there and spur the economy. Last year Saudi aviation officials announced plans to invest more than US$12 billion in the next decade overhaul the kingdom's airports. It will be setting up a new holding company to manage a total of 27 eventual aviation hubs. Abdullah Rehaimi, president of Saudi Arabia's General Authority for Civil Aviation, has indicated that the company will initially be government owned but will ""likely"" be privatized ""when the time is right. The plans include new airports, the expansion of existing airports, a much more extensive rail network, new highways and a new, dedicated pilgrimage airline. The International Finance Corp, an arm of the World Bank, is assisting Saudi Arabia in the development of three international airport cities in Jeddah, Dammam and the capital Riyadh. Next month Saudi aviation authorities will float a tender to build the kingdom's first privately owned airport in the Islamic holy city of Medina. The facility, to be built at an estimated cost of at least US$1.8 billion, will have a capacity of eight million passengers a year when completed around 2014. It will replace the existing Prince Mohammad Bin Abdul Aziz domestic airport.

Ras Al Khaimah: Flying high

Though there has been no shortage of news coverage about the state of the Gulf's airline industry after the international economic crisis, there are plenty of developments in the aviation sector ongoing outside the public eye, especially in Ras Al Khaimah (RAK). Investment in the sector is taking off, with huge expansion plans from practically every carrier. Oman recently increased the operating capital of its national airline, Oman Air, six-fold, from US$130 million to US$777 million. Low-cost carrier Air Arabia, coasting on net profits of US$123 million in both 2008 and 2009, has placed an order for 44 new craft and invested US$50 million in a new hub in Casablanca. Qatar Airways has ordered a staggering US$40 billion worth of new aircraft. And RAK Airways has invested more than AED100 million (US$27.22m) in infrastructure projects. But investment is not necessarily translating into profits: of the four carriers just mentioned, Air Arabia is the only one to turn a profit in the last two years. The major upgrades across the board mean that interested parties are competing for slices of what is still a very small pie. According to the International Air Transit Authority (IATA), only about 10 per cent of the world's air traffic passes through the Middle East. While all estimates predict strong growth in the region - Boeing figures estimate revenue passenger kilometers (RPKs) will increase at a compound annual growth rate of 6.6 per cent between 2008 and 2028, and a report from the Kuwait Financial Centre (Markaz) predicts passenger traffic will more than double by 2014 to 280 million from 126 million in 2008 - the level of investment in the sector is well out of proportion to the region's short-term revenue potential. Even if the impressive passenger and freight growth of the last few months continues, prices will have to increase exponentially for investors to see a return on the estimated US$45 billion that is being poured into the sector over the next four years. This disproportionate spending is understandable in this fast-developing area, where cash-rich governments, who are often the principle investors in the region's airlines, can afford to swallow short-term losses in order to capture long-term market share. Growing populations, and clout on the world economic stage, mean that the percentage of air traffic passing through the Middle East will almost certainly soar beyond the current 10 per cent. But with so much competition, it will be hard for all the current players in the industry to ride the rising tide.

Bahrain's US$8bn public transport network on track

Work on Bahrain's new BD3 billion (US$7.96 billion) public transport network should start by the end of next year, it has emerged. Ten consultants have now been shortlisted to complete a detailed feasibility study, which is expected to be ready by December next year, Works Ministry road planning and design director Huda Abdulla Fakhroo said. She said work on the project would start immediately after studies were finished and the entire network would be completed by 2030. The network, which consists of Light Rail Transport (LRT), a monorail, trams and a Bus Rapid Transport (BRT) system, will cover a total of 184.2 kilometers. Early blueprints for the project were unveiled in late April and Fakhroo said work would be conducted in phases. “We shall begin work on the BD453 million first phase, consisting of 24 kilometers of LRT and tram network, immediately after the studies are completed,” she told delegates at the Middle East Rail Opportunities Conference 2010. She explained the first phase will incorporate a 13 kilometers light rail track running from the Bahrain International Airport to Bahrain Mall and an 11 kilometers tramline running from Juffair to Bahrain Mall.

Qatar: Economy on track

Qatar is to invest billions of dollars in the coming years to develop an extensive rail network serving local commuters, international travelers and the country's growing logistics industry. By 2016, Qatar is expected to have a series of rail lines, with the capital Doha alone set to receive 350 kilometers of lines for its metro, and some 325 kilometers of broad gauge track. Most lines are to be dual purpose - carrying both passenger and freight services. The metro grid will consist of four separate lines and some 90 stations, with the Red Route running from Mesaieed to the New Doha International Airport, and on to downtown Doha and Lusail, before extending to Al Khor and Al Shamal. Two of the other lines, the Green and Yellow Routes, will connect east and west Doha, while the Blue Route will travel along the C-Ring Road. The main line component of the rail network will include a high-speed link to Saudi Arabia, with branches tying Qatar's railway with the planned Gulf Cooperation Council (GCC) regional rail grid, and a line connecting Ras Laffan, the centre of Qatar's upstream hydrocarbons sector, to Messaieed, the hub of the country's downstream gas and oil industries. Another rail project that will have a major impact on the local economy when completed some time after 2014 is the Qatar-Bahrain Causeway. It was first unveiled in 2006, with preliminary construction set to begin in 2008. However, work on the 40-kilometers bridge project was rescheduled after the two countries agreed to add a main line rail link to the scheme, a proposal that understandably required extensive modifications to the original plan and budget, with the expected cost rising to an estimated US$3 billion.

French CMA to operate part of Umm Qasr Port

The France-based firm CMA will operate part of the Umm Qasr Port in southern Iraq, Basra province, according to a contract with the Iraqi Transport Ministry. “CMA will invest US$20 million within a period of three years,” the Ministry said in a release. It described this step as an important one in order to develop Iraqi ports.