The steel rail industry is likely to receive a boost from a number of rail projects being planned for the Persian Gulf region throughout this decade.
According to Industrial Info Resources (IIR), Sugar Land, Texas, the Gulf Cooperation Council (GCC) nations may spend more than $100 billion on rail projects in the next several years that will consume healthy amounts of steel and likely generate scrap in the process.
Citing an infrastructure report released by Kuwait Finance Centre SAKC (KUW:MARKAZ) (Safat, Kuwait), IIR says most of the GCC nations are beginning to focus on improving and augmenting their transportation sectors.
Historically, the Gulf nations, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE), have invested in roadways, which has led to the region boasting of one of the best roadway networks in the world.
In the next 10 years, investments are expected to continue in this sector, with $10.6 billion likely to be spent on the development of new roadways. However, the SAKC report uncovers larger investments in the region’s emerging railway network. Most GCC countries do not have railways, with Saudi Arabia being the only country to begin development of a railway network, construction of which is in the early stages. Recently, the UAE launched a passenger rail service.
GCC member nations are conducting feasibility studies to build domestic railway networks, according to IIR. Construction in several member countries is expected to begin in 2010. In the next 10 years, the member nations are estimated to spend $109 billion to develop and expand their railways. Bahrain, Qatar, Saudi Arabia, Kuwait, the UAE and Oman are among nations considering inter-city and intra-city rail links.
A pan-GCC railway link is also in the planning stage. The project will connect Kuwait with other GCC nations. The 1,300-mile (2,100 kilometers) railway line is estimated to cost about $60 billion. The line is scheduled to be operational by 2017.
According to another report from Dubai-based Ventures Middle East, the UAE leads in railway infrastructure investments, with projects worth $26.8 billion in various stages of planning and construction. Saudi Arabia is second on the list, with planned investments of $19.3 billion.