Qatar’s Impending Rail Revolution

The next few years will be very exciting. The country will experience an unprecedented transformation, with Doha becoming a truly world-class city,” Hyder Consulting’s Middle East rail director, Geoff Leffek, said in the company’s recent Global Rail Market Report. “There is determination and the resources to achieve the ambitious targets that Qatar has set itself.”

Doha today, as everybody living in, working in or visiting the city cannot fail to realise, is a city on the move. The capital is planning a massive infrastructure development programme with a strict 2022 deadline, set in stone by the obtainment of the rights to host the soccer World Cup a decade from now. However, the deadline represents a herculean task if Doha is to put in place the required infrastructure to host the world’s largest single-event sporting contest. The city must undergo one of the largest, most intensive and transformative development programmes in modern history if it is to welcome the world – and at the heart of that programme lays rail transportation. And with the clock ticking, the first contracts to construct phase one of the Doha Metro project look set to be awarded in late September. Tenders have been received by the Qatar Railways Development Company (QRDC), which is overseeing the work.

An announcement regarding the successful firms has already been pushed back, and the private sector is on anticipating it eagerly, although those companies involved will not have long to wait: “In a couple of months we should have some visibility on the process,” Safwan Moubaydeen, a Doha-based lawyer at SNR Denton, which is working closely with QRDC, told TheEDGE.

A smattering of engineering consultancy contracts was awarded in early August, but six major construction packages remain available, among these four contracts, covering tunnelling and underground station build, are each valued at QR7.4 billion, with the remaining two packages covering station excavation works only.

THE GRAND PLAN

Qatar’’s grand plan for rail development is centred on Doha over the next decade, with the overarching strategy – to open up the wider peninsula via rail transportation through to 2030 – already on the table. The proposal is to traverse the peninsula with a QR55 billion, 270 kilometre (km) high-speed passenger rail network linking Doha with Port Mesaieed to the south, Ras Laffan and Al Shamal to the north, and Dukhan to the west. A link to Bahrain via the Friendship Bridge, pending completion of the bridge itself, will be included, as will a route south into Saudi Arabia. A 325km freight railway network will also be constructed.

But before concentrating on the big picture, the race is on to fast track the elements of the scheme centred on the capital. The four-line Doha Metro will connect the New Doha International Airport with the city centre via a high-speed line, also pushing out to the World Cup stadia. Phase one of the Doha Metro will include 216km – 95km through bored tunnel beneath the city streets, with 91km at ground level – and must meet its 2022 deadline. Phase two will extend the network to 300km, with completion expected in 2026. Like the national network, the metro also demands investment of QR55 billion.
In addition, a further two light rail systems are in the pipeline. Construction is already underway on the first, the 30km Lusail Light Rail Transit System (LRT), which is being developed by Qatari Diar Vinci Construction (QDVC), a joint-venture between Qatari Diar Real Estate Investment Company and Vinci Construction Grands Projects. It is set to be the nation’s first fully operational rail network, with completion expected in 2016.The QR8 billion, 10km Doha West Bay People Mover completes the picture, with handover expected in 2018. The total estimated bill for Qatar’s rail ambitions is believed to be in the region of QR130 billion.

A number of smaller projects are also in the pipeline. At the end of July, Qatar Foundation awarded a contract to a consortium including German company Siemens and United Arab Emirates (UAE) -based Habtoor Leighton Group to supply an energy-efficient tram system at the science and technology hub. As part of its long-term plan, Siemens plans to double its workforce in Qatar over the next two years, contributing to the growth of the nation in the process.

PROGRESS SO FAR

Qatar’s journey into the rail world as it is recognised today began in November 2009, when Qatari Diar signed a joint venture with German passenger and logistics giant Deutsche Bahn to establish the QRDC. The organisation is charged with unifying all planned railways in Qatar, as well as connecting the network to Bahrain and Saudi Arabia.

As things stand today, only the LRT has broken ground. In February, the Qatar Railways Company (Qrail), a subsidiary of Qatari Diar, signed a QR1.95 billion contract with Qatari Diar Vinci Construction (QDVC) for the current phase of works on the project, building on works it had already carried out. This year, QDVC says, additional partners are expected to come on board to cover the rolling stock and power supply areas of the project.

Despite the LRT heading the pack, the Doha Metro is not far behind, with the number of firms to have expressed interest in the initial tendering round believed to have numbered in the hundreds. The wider cross-peninsula network has passed the initial study stage, a Deutsche Bahn spokesman confirmed, and the Qatar side of the QRDC joint venture will carry construction work forward, with Deutsche Bahn involved only in a consultancy capacity. “We see that as important, but in terms of moving the project forward on the ground, the Qataris will oversee the work” the spokesman confirmed.
The sheer size and scale – combined with the demanding timetable – means that opportunity will abound for private sector firms from a diverse range of economic sectors. The question that the Qatar business community should now be asking itself is, how best to ensure it is positioned to snap up a share of the work?

In terms of most recent developments, QRail appointed seven major law firms, including SNR Denton, to its legal panel for a two-year period and, despite the fact that the task of building a railway is a decidedly international one – with no such project having ever been built in the country previously – not all of the contracts were awarded to international firms. Qatar Rail, acting general counsel Rashid Al Saad says the company selected firms that would “provide essential international experience to projects that will facilitate the improvement of Qatar’s transportation infrastructure throughout future generations”. Doha-based Al Sulaiti Law firm was among the seven, while GCC-based Al Tamimi was also selected from a competitive bidding process. Allen & Overy, Clifford Chance, K&L Gates, and White & Case completed the list. The fact the Qatar side of the QRDC joint venture is in charge of the contracting arrangement is a further encouraging sign for local business, demonstrating that if work can stay inside of Doha, it will most likely do so.

LOOKING BEYOND 2022

The need to establish Doha, and its transportation infrastructure, as being worthy of hosting a major international sporting event is driving the demanding 2022 metro timetable. But Qatar is looking well beyond this date as it lays out plans for its wider rail network. The overarching project is one that has the potential to open up the peninsula, paving the way for sectors such as leisure, tourism, business travel and logistics to grow and expand into previously inaccessible parts of the country.

The key word on planners’ lips at this early stage in Qatar’s long-term railway journey is ‘legacy’. Can the country now put in place the appropriate infrastructure to facilitate the economic growth and, more importantly, the economic diversification that will be so important in coming years? The necessity to consider the issue of legacy when developing major infrastructure programmes is an often preached, yet impalpable topic, one that is impossible to measure until years after the event, but is rightly considered vital.

Ezzat Ragab is chief operating officer (CEO) of Qatari project management company QPM. The firm – Qatar’s first dedicated project management company – is seeking to play a major role in the development of the railway network. From his comments it is clear the legacy issue is one that private sector contractors are very aware of, as well as those at the planning stage. “We need to look inside these projects and ask: what are we doing to increase the probability of achieving the expected benefits from our projects?” says Ragab. “Are we deploying our resources appropriately and selecting the right projects in order to maximise benefit? Are we developing the capacity to understand, and learn from, our project failures,” he continues, “and do we have a framework for institutionalising program and project management best practices?”

Beyond 2022, Qatar’s development path is set by principles laid out in the National Vision 2030 document. While Doha Metro must arrive at its final destination by 2022, the remainder of the network is aiming for completion sometime between 2026 and 2030.The work will be tough but potentially lucrative, and Qatari businesses must not get left standing at the station as the express pulls away.

THE GCC RAIL REVOLUTION

Qatar is far from alone across the region in its drive to develop railway infrastructure. The entire GCC is in the midst of a rail revolution, with the eventual aim being to connect each state’s domestic system to form an inter-GCC rail network. The potential economic benefits are well documented. According to a study into the GCC rail sector released by consultancy giant Frost & Sullivan, one freight train can on average carry 1000 tonnes of freight, replacing the movements of around 50 trucks; rail transport uses about 60 to 80 percent less energy per kilometre travelled than road transport; rail travel is considered to be nine times safer as a mode of transport than road; and perhaps most importantly for a region seeking to diversify its economy while ensuring the continuation of economic growth, rail-based cargo transport is at least 30 percent cheaper than road.

A network connecting the region, Frost & Sullivan said, would “offer immense efficiencies in transportation, apart from furthering the vision of a closely-integrated regional community”. Yet according to the report, there are a number of reasons why the GCC countries have not previously focussed on rail transport. These include the small geographic size of nations in all cases bar Saudi Arabia; the volatile ground surface characterised by shifting sand dunes across the region; and the availability of relatively cheap fuel for road transport. The plan is for a sprawling, 2200km line hugging the northern coast of the region from the Omani capital Muscat, running through the United Arab Emirates (UAE) and Saudi Arabia to Kuwait City. A branch line will run to Doha and onto Manama via the Friendship Bridge, before rejoining the main line in Saudi Arabia.

Of the GCC nations, Saudi Arabia has reportedly earmarked investment of SAR96 billion (QR93 billion) spread across 23 separate rail projects. The country does have previous rail experience – the Mecca Metro has been fully operational for almost two years. Like Saudi Arabia, the UAE also has some experience under its belt, with the opening of the Dubai Metro. And more is to follow. Last October, the AED3.3 billion (QR3.27 billion) construction contract for the first phase of the UAE’s Etihad Rail project was awarded to a consortium led by Italy’s Saipem. The remaining GCC nations, however, will be building rail from a position of no previous experience. The successful completion of Saudi Arabia and the UAE’s initial projects, however, point to the region remaining on track.