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Wednesday, October 14, 2009

Kuwait-Oman train

Ivan Gale

Last Updated: October 13. 2009 11:31PM UAE / October 13. 2009 7:31PM GMT An ambitious GCC rail network linking Kuwait with Muscat could be up and running by 2017, the project manager said yesterday.

Gulf nations are working to link their various rail projects into one network to service both freight and passengers.

Tracks of more than 2,000km would run from Kuwait City through Saudi Arabia, Bahrain, Qatar and the UAE before terminating in Oman.

Each country would also build extensions and spurs to serve industrial and transit centres.

David Lupton, the project manager of the GCC Railway Feasibility Study, said a final decision to proceed with the project was expected in 2011.

It will be followed by up to two years of detailed engineering design and four years of construction, making the network operational in 2017.

“The GCC Secretariat is working on development of the next phase involving establishing a railway company and authority and undertaking detailed design,” he told the Middle East Rail Projects 2009 conference, hosted by the magazine MEED.

In the UAE, for example, the spine of the railway would run for about 670km – although the entire length of track within the Emirates would total more than 1,300km.

Earlier this week, the newly established Union Railway company announced plans to add a 200km extension to the Shah gasfield, deep inside Al Gharbia, to carry millions of tonnes per year of sulphur by-product to its port in Ruwais for export.

The GCC project will cost more than US$10 billion (Dh36.7bn), he said, although how the project will be paid for remains unresolved.

Because of the high initial cost, the governments will be required to finance a portion of the construction, Mr Lupton said.

But he noted that there was much potential for private sector investment, such as a public-private partnership.

“We concluded the project has an internal rate of return of three per cent, and that would require public financing, which is common practice for railways,” he said.

“But the passenger and freight businesses would have positive operating cash flows, and with that you could look at a concessionaire.”

A technical committee made up of Systra, the French rail firm, CanRail of Canada, and Khatib and Alami, a Lebanese engineering firm, has estimated that some four million passengers could use the service in the first year of operation.

This level of use would generate up to US$240m a year in revenue, which, according to Mr Lupton, would be expected to increase to US$600 million a year by 2045.

The committee is suggesting the service should operate five passenger trains a day between Kuwait City and Dubai, and eight additional trains from Bahrain and Qatar to Muscat.

The freight rail boxcars could serve an estimated 30 million tonnes per year including minerals, petrochemical products and shipping containers, Mr Lupton said.

Other unresolved issues are whether the line would have one line or use a double-track, which would be make it considerably easier to run passenger services.

Some alignments are still being worked out, Mr Lupton added, saying Oman was hoping to extend rail lines from Muscat south to the border with Yemen, connecting with industrial centres and ports along the way.

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