The Gulf Cooperation Council (GCC) region has historically focused its transportation investments in building roadways, which ensured high quality of roads across most of the Gulf countries, Kuwait Financial Centre (Markaz) said in its report on “GCC Infrastructure Roads & Railways” released on Wednesday. The paved roads as a percentage of total roads in most of the GCC countries is close to 100 percent as compared to other emerging countries average which is below 75 percent. The authors of the report M.R. Raghu and Amrith Mukkamala said the GCC region has historically focused its transportation investments in building roadways due mainly to the significantly higher density of motor vehicles per kilometer of road in some of the GCC countries as compared to (Brazil, India, China) BRIC peers. Among the six GCC countries four countries - UAE, Kuwait, Bahrain & Qatar have significantly higher traffic density in comparison to rest of the countries. Also, the higher density of vehicles is because of the low road density. Other than Bahrain, the rest of the countries in the GCC have significantly low levels of road density. Majority of the countries in the GCC fare poorly when compared to developed nations also. The US and United Kingdom have a road density of 0.68 and 1.72 respectively compared to Saudi Arabia which is at 0.10, the report said. The lower road density and higher proportion of motor vehicles on roads as compared to rest of the countries is the major cause for higher instances of road accidents. The fatality rates in majority of the GCC countries as compared to the BRIC countries and developed countries are significantly high, though. In the US and United Kingdom, the number of fatalities per 1,000 people is at 13.68 and 19.11 respectively, compared to 30.7 in Oman and 26.32 in Saudi Arabia. Even in comparison to the BRIC countries, three of the GCC countries - Oman, Saudi Arabia and UAE have high fatality rates. The aggregate value of investments shows that GCC is planning to invest $10.6 billion in the next 10 years. A total of $14.45 billion was planned and of this $3.8 billion worth of projects have been cancelled so far. Of the total $3.8 billion worth of cancelled projects, $3 billion is from Saudi Arabia alone. Of the total $10.6 billion worth of planned projects, Kuwait has a share of close to 40 percent. Railways, as a sector, never really made inroads in the GCC region; in fact, most GCC countries do not even have railway networks currently. In Saudi Arabia, the only GCC country to have a railway, the network is still in the nascent stage. UAE has recently launched its metro (The Red Line). However, the GCC region's growing population is increasing demand for transport infrastructure. Consequently, congestion on roads has increased. Growing trade has also contributed to the congestion. This has spurred the governments of several GCC countries to look at inter- and intra-city railways as a viable option. The UAE, Bahrain, Oman, Kuwait and Qatar have already completed feasibility studies for national railway networks and are likely to commence on their plans in 2010. Saudi Arabia has also implemented a railways expansion project. The supply-side analysis of expected investments indicates that the GCC region could see investments totaling $109 billion in railways over the next 10 years. The supply-side estimate is based on the announced projects in Saudi Arabia, UAE, Bahrain, Qatar, Kuwait and the pan GCC project. Although a few projects are reportedly being considered in Oman (for example a railway line linking Sohar and Barka), these are still in the early stages and no details are available. A total of $113 billion worth of projects were announced. Dubai has witnessed two projects aggregating to a value of $3.2 billion being put on hold. The GCC countries are expected to post strong growth rates on the back of revenues from hydro carbon related sectors. This is expected to lead to an increase in population growth rate due to an influx of expatriates. Currently, the expats in the GCC countries form on average 60 percent of the total population. Coupled with this, the natural growth rate of population is high in the GCC countries at an average of 3 percent, that is expected to increase the stress on the transportation segment. Already, there are visible signs of inadequate capacity, especially in the case of the roads segment in Oman, UAE, Kuwait and Saudi Arabia, the report noted. “We believe that the scenario might continue to be stretched if additional capacity is not brought in. Additional capacity can be brought in the form of expanding current road capacities or by introducing viable alternative solutions for transport,” the authors of the report said. Already some of the countries in GCC have put forward plans for alternative transport systems such as the Dubai Metro and Saudi Arabia's various rail plans. “We believe that this might result in relieving some amount of stress from the road network,” they added. Also, the pan-GCC railways planned at an overall cost of $60 billion will open lot of interesting opportunities for pan-GCC travelers. Currently, the only option to travel across GCC is either by road or by air. However, implementation of these plans is crucial, the report pointed out. The aggregate amount of projects cancelled in the roads and the railways segment currently stands at $7.05 billion. Most of these projects have been cancelled due to significant cost escalations or lack of economic viability of plans post the financial crisis, the report added.
