$200bn worth of rail and metro projects planned in Middle East

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Updated 12 October 2014
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$200bn worth of rail and metro projects planned in Middle East

The MENA region is experiencing an unprecedented spate of rail investment. From Africa’s first high-speed rail network in Morocco to Oman’s first ever rail scheme, billions of dollars are being invested in rail and metro projects for the first time.
Today, every country has announced rail or metro plans and in total there are more than $200 billion worth of rail and metro projects either planned or under way in the Middle East. This translates to more than 33,700 km of mainline routes and 3,000 km of new metro lines.
The award of major metro and rail contracts in the Middle East has made the region among the most important sources of new work for all those designing, building, supplying and operating railways.
“The Middle East is perhaps the fastest growing market for rail and transit in the world,” says Cosema Crawford, senior vice president and rail and transit global practice leader at Louis Berger.
“Cities are growing and mobility is increasing, driving the need for robust public transportation networks. High-speed rail networks are being built in great numbers, particularly in China, which now boasts about half of the world’s systems,” adds Crawford, who will be speaking at the 10th annual MEED MENA Rail & Metro Summit, which opens in Dubai next month. An increasing number of system suppliers have entered the market, which should help stabilize pricing,” he added.
More than 250 delegates and guests are expected to attend the conference scheduled from Oct. 20-22, at the Conrad Hotel in Dubai with global experts providing tactical insights on challenges and opportunities confronting the metro and rail sector across the region. Among those who have confirmed include Ramiz Al-Assar, World Bank resident adviser to the GCC on railway projects.
Crawford will also speak at the conference’s focus day about high-speed rail in the region. The sector is booming across the world, and the Middle East can learn important lessons from the experiences of others.
High-speed rail, seen in the Middle East as an innovation, has an extensive history. Confidence is now growing in its capacity to reach new levels of performance and speed. “Japan is celebrating the 50th anniversary of the Shinkansen this year, and it is developing the next generation of maglev trains, which will travel at 500 km an hour between Tokyo and Osaka,” Crawford adds. “Louis Berger is involved in bringing the same maglev technology to the United States providing one hour service from Washington DC to New York.”
Crawford says that demand for high-speed rail solutions will increase for more than one reason. “High-speed rail popularity will grow as a better and significantly greener alternative to air and car travel,” she says. “As confidence grows in ridership and revenue figures, PPP opportunities will develop as well.”
The GCC’s first high-speed railway is the 450 km Haramain High Speed Rail project that links Jeddah with Makkah, Madinah and Rabigh. It is scheduled to open in 2015 and will break the mold for the Middle East. Also due to open the same year is Morocco’s TGV network from Tangiers to Casablanca, which will be the first high-speed rail technology to be employed on the African continent.
“As traffic congestion continues to grow, public transportation networks become essential, including intercity travel on high-speed rail,” says Crawford about the need for new transport solutions in the region.
“High-speed rail is ultimately an instrument for development, and the costs for implementation should be considered and financed in that light. High-speed rail systems are dependent on good local public transportation networks to take riders to their final destinations. Most importantly, there needs to be a cultural shift to accept public transportation systems,” Crawford says.
“Seasonal high temperatures and lack of pedestrian infrastructure need to be addressed in the design of the stations,” he added.
The engineering challenges are also formidable. “High-speed rail requires straight alignments in order to maintain speed. Developed areas may have difficulty identifying suitable corridors, resulting in compromises on speed, substantial property takings, or extensive tunneling, with the latter two adding to the cost and schedule. True high-speed rail cannot co-exist with other rail modes on the same tracks, such as freight rail,” Crawford says.
“In addition, special solutions are required to maintain the required level of track integrity over long distances of desert conditions with blowing sand,” he added.


Crisis at India’s Jet worsens as it grounds planes, faces strike

The debt-laden carrier has delayed payments to banks, suppliers, pilots and lessors. (Reuters)
Updated 28 min 25 sec ago
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Crisis at India’s Jet worsens as it grounds planes, faces strike

  • More than 20,000 people are employed in the company
  • The company had to stop more than 50% of their aircraft due to insufficient funds

MUMBAI: India's Jet Airways was fighting multiple crises Wednesday after grounding six planes, leaving it with only a third of its fleet flying, while pilots have threatened to walk out and a major shareholder is reportedly looking to offload its huge stake.

The problems at India's number-two carrier come as other airlines struggle to turn a profit despite the sector rapidly expanding in the country over recent years.

Jet, which employs more than 20,000 people, is gasping under debts of more than $1 billion and has now been forced to ground a total of 78 of its 119 aircraft after failing to pay lenders and aircraft lessors.

In a statement late Tuesday announcing its latest grounding, the firm it said it was "actively engaging" with lenders to secure fresh liquidity and wanted to "minimise disruption".

But with hundreds of customers left stranded, Jet's social media accounts have been flooded with often suddenly stranded passengers demanding information, new flight tickets and refunds.

"@jetairways We book our flights in advance so that we save on travel cost and you are sending cancellation (message) now?", read one irate tweet on Wednesday.

"I have sent a DM (direct message) regarding my ticket details. Please respond!", said Sachin Deshpande, according to his Twitter profile a design engineer.

Another, Ankit Maloo, wrote: "Received an email for all together cancellation of flight days before departure without any prior intimation or communication over phone!"

The firm is also facing pressure from its many pilots who have not been paid on time, with unions threatening they will walk off the job if salaries do not arrive soon.

"Pilots will stop flying jet planes from 1st April 2019 if the company does not disburse due salaries and take concrete decisions," a spokesperson for the National Aviator's Guild, a pilots union, told AFP.

India's aviation regulator on Tuesday warned Jet Airways to ensure that staffers facing stress are not forced to operate flights.

Meanwhile, Bloomberg reported that Etihad Airways of the United Arab Emirates has offered to sell its 24 percent stake in Jet to State Bank of India (SBI).

A collapse would deal a blow to Prime Minister Narendra Modi's pragmatic pro-business reputation ahead of elections starting on April 11.

India's passenger numbers have rocketed six-fold over the past decade with its middle-class taking advantage of better connectivity and cheaper flights.

The country's aviation sector is projected to become the world's third-largest by 2025.

But like other carries, Mumbai-based Jet has been badly hit by fluctuating global crude prices, a weak rupee and fierce competition from budget rivals.

Alarm bells for Jet first rang in August when it failed to report its quarterly earnings or pay its staff, including pilots, on time. It then later reported a loss of $85 million.

In February, it secured a $1.19 billion bailout from lenders including SBI to bridge a funding gap, but the crisis has since deepened.

"Jet Airways is rapidly reaching a point of no return and running out of assets to keep itself afloat," Devesh Agarwal, editor of the Bangalore Aviation website, told AFP.

"The only solution is equity expansion by diluting its stakes but Jet is just trying to cut losses and running out of options," Agarwal said.

Shares in Jet Airways were down more than five percent on Wednesday.