By Paul Holdsworth, Staff Writer, Gulf Jobs Market News
$968 Billion in Project Investments Forecasted in the GCC For the Coming Decade
Over the next ten years 1,638 projects across the GCC are expected to see implementation, resulting in $968 billion in investments. These projects are supported by record-high revenues in the oil sector and will affect a variety of sectors within the GCC, according to a report by the Markaz.
According to the report a majority of these projects, more than 80 percent, involve the petroleum industry, construction and infrastructure.
Consistently high oil prices have permitted the GCC member nations to implement investment commitments targeting development and growth projects, as stated in the report.
Execution of these vital projects will require a compatible and clear set of policies and systems that allow for integration and support efficient implementation. Many of the member states have acknowledged the importance of PPPs (or public private partnerships) to accelerate and facilitate these projects, along with other mechanisms such as joint venture agreements and direct foreign investments.
Kuwait will implement 218 of these projects, totaling more than $133 billion spread across the next decade. Despite this nation’s massive financial wealth, it has been reserved in the spending and awarding processes.
It is expected that between 2011 and 2020, $97 billion will be spent in the GCC on new rail and road projects. Rail projects, such as stations, metro, train and tram projects, are forecasted to reach $79 billion including a $30 billion shared cost rail network stretching across the GCC.
The value of ongoing roads projects should total about $18 billion, according to the report.
Many GCC nations are considering or planning their own metro systems, especially after the success of the metro launch in Dubai. A 131km metro system in Abu Dhabi is forecasted to begin in 2015. A pan-GCC rail system is in the works, with an updated value of about $30 billion. This network will include the first rail line linking all the GCC member states.
A bridge and one rail line stretching 1,970km will link Qatar and the GCC members. Another line stretching 1,984km will connect the UAE, Saudi Arabia and Kuwait, before ending in Oman. Forecasted land acquisitions for this network total $3.1 billion, while the budgeted purchase of locomotives and trains to ride the network is forecasted at $1.8 billion.
Once the engineering studies have been completed in 2012, work should begin on this network.
Port expansion projects are forecasted at almost $15 billion across the GCC. Implementation of these projects to meet expanding business needs is expected to span the next five years.
Expansion will occur in most of the 35 major ports in the GCC, in order to deal with an approximate 8 percent growth in 2010, where capacity hit almost 25 million TEU’s. According to the report, ports in the UAE handle 59 percent of total GCC volume.
In 2010 Dubai came in as the ninth largest port in the world, while Oman’s Salalah was named 32nd on the list of global ports and Saudi Arabia’s Jeddah captured 30th place, according to the report.
Healthy growth in seaport investments is expected to push capacity even higher. Much of the increased investments have occurred in Abu Dhabi and Dubai, and Markaz noted that other GCC member states have plans to improve port conditions.