Posted on October 21, 2013

The upcoming multi-billion-dollar Qatar Rail project is expected to throw up a plethora of business opportunities worth billions for local companies and entrepreneurs, through retail stores, kiosks, coffee shops, cafeterias and restaurants at stations.

Other permanent business is likely to be in the form of contracts for the maintenance of the Metro tunnels. These opportunities will, however, arise when the rail project, particularly the Metro rail, is ready for operation, which is years away. Before the launch of the main project and during the construction phase itself, business opportunities worth hundreds of millions of dollars would be up for grabs. A report by Qatar Development Bank (QDB), which finances small and medium enterprises to help boost Qatar’s economic diversification effort, suggested that one of the avenues of business is to provide prefabricated tunnel linings for the 80-km long metro tunnels. According to local media reports, the supply of  tunnel linings would involve contracts worth USD 110 mn (over QR 400 bn).

Opportunities galore

QDB sees, based on project breakdowns prepared by McKinsey, the American global management consulting firm, an opportunity worth USD 200 mn for the manufacture of protection walls for 110 km to minimise noise and vibrations from the railway, including design, manufacture and installation.

Another key area of business includes the lease of heavy machinery and construction equipment such as cranes, bulldozers, excavators, and trucks. The lease opportunities would likely be worth USD 550 mn. In addition, earthwork services would involve contracts worth a staggering USD 970 mn. Other opportunities include building rail stations and project management, including maintenance of the rail tunnels. QDB said these are some of the key opportunities local businesses and entrepreneurs can seize for the benefit of the national economy.

Transport projects worth USD 140 bn set to take off in GCC region

Over 50 railway, metro, monorail, tram and bus rapid transit (BRT) projects with a combined value of USD 140 bn are either under bid, under design or under study in the GCC region.

Saudi Arabia has the greatest potential with projects worth USD 50 bn due to be completed by 2025, MEED Projects show. Rail, Metro, tram and BRT projects in Qatar worth more than USD 30 bn are scheduled to be finished by 2020, ahead of the 2022 FIFA World Cup. The third-biggest rail market is the UAE, where USD 27 bn worth of projects is due for completion by 2030.

One of the biggest issues is pressure on the Middle East project supply chain and competing demands for steel, cement and skilled labour from other sectors of the region’s booming projects market. About USD 2.2 tr of projects are under bid, design or study, about half of this figure in the GCC. MEED Projects figures show that Saudi Arabia alone has a pipeline of more than USD 350 bn of projects.

Project pipeline

The project pipeline in rail, metro, tram and BRT projects is formidable. According to MEED Projects figures, almost USD 40 bn of projects are under bid in the sector at present. About USD 90 bn worth of projects are under design and more than 75 percent of projects under bid, design and study are due to be finished by 2020.

MEED Projects figures show that more than USD 90 bn of metro and light rail projects are planned in the MENA region by 2030. Planned passenger and freight rail investments of a similar value are projected in the same period. High-speed railway projects of about USD 15 billion are under study. Monorail and tram projects worth more than USD 10 bn apiece are planned.

There is a single large-scale investment in BRT, a USD .5 bn project in Abu Dhabi. Prequalification of companies wishing to work on the project is now underway and other cities are now seriously considering BRT as an alternative and supplement to new urban railways and tramways.

MEED MENA Rail & Metro Summit

Opportunities in the MENA region’s rail, metro, tram and BRT capital investment programme to 2030 will be highlighted at the MEED MENA Rail & Metro Summit which opens in Abu Dhabi on October 19, 2013.

source: bqDoha