France’s Alstom on track to expand presence in Saudi Arabia

France’s Alstom on track to expand presence in Saudi Arabia
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Alstom has supplied 69 trains for the Riyadh Metro and an Urbalis signaling system. The project’s lines 3, 4, 5 and 6 have been built by Alstom and its partners.
France’s Alstom on track to expand presence in Saudi Arabia
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Alstom has supplied 69 trains for the Riyadh Metro and an Urbalis signaling system. The project’s lines 3, 4, 5 and 6 have been built by Alstom and its partners.
France’s Alstom on track to expand presence in Saudi Arabia
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Alstom has supplied 69 trains for the Riyadh Metro and an Urbalis signaling system. The project’s lines 3, 4, 5 and 6 have been built by Alstom and its partners.
France’s Alstom on track to expand presence in Saudi Arabia
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Alstom has supplied 69 trains for the Riyadh Metro and an Urbalis signaling system. The project’s lines 3, 4, 5 and 6 have been built by Alstom and its partners.
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Updated 19 April 2021

France’s Alstom on track to expand presence in Saudi Arabia

France’s Alstom on track to expand presence in Saudi Arabia
  • The French technology provider has been part of several other key projects in the Kingdom

RIYADH: French transport technology provider Alstom, which is working on the Riyadh Metro project, is targeting expansion in Saudi Arabia.

Andrew DeLeone, who is president of Africa, the Middle East and Central Asia at Alstom, said the company was a  long-standing partner of Saudi Arabia.

“We have been active for decades and played an integral role in the Kingdom’s energy sector,” he told Arab News. “We installed the first gas turbine in the Kingdom in 1951. We are one of the largest technology players in the Riyadh Metro program, which is one of the largest public transport systems in the world. We are supplying solutions and the Riyadh Metro’s lines 3, 4, 5 and 6 have been built by Alstom and its civil partners, as part of the FAST consortium, and the system is set to provide comprehensive, citywide, mass-transit coverage.”

The Al-Eqtisadiah newspaper reported in January that the Riyadh Metro would be launched in the third quarter of this year. 

When fully operational, it will comprise six lines with a total length of 176 km, and 85 stations. Once launched, Alstom will continue to provide services for the metro. 

“We will be continuing in Riyadh for many years as part of the O&M (operations and maintenance) for these four lines and (as a) major presence in the metro system,” DeLeone added.

Alstom has supplied 69 trains for the Riyadh Metro and an Urbalis signaling system. 

It has also implemented HESOP (harmonic energy saver) technology in the project. HESOP recovers the electrical energy generated by trains during braking which, in addition to reducing operational costs, will cut about 3 million kilos of carbon emissions and decrease power consumption by 6.6 million kilowatts a year.

Alstom also has a number of other projects in its current Saudi portfolio.

FASTFACTS

• Alstom installed the first gas turbine in the Kingdom in 1951.

• It is one of the largest technology players in the Riyadh Metro program.

• Alstom has supplied the key components for the high-speed trains that connect Makkah and Madinah.

“We will also deliver the transit solutions for the King Abdullah Financial District when the project resumes and completes. We have supplied the key components for the high-speed trains that connect Makkah and Madinah. We will also be delivering the people mover system in the Kingdom, which is now operating in Jeddah airport.”

DeLeone said that Saudi Arabia was already making inroads into driverless technology solutions. 

“We already see it in Jeddah airport as our people mover system is driverless. Our monorail system is also driverless. Riyadh Metro system is also a driverless transportation system. Driverless transport is here in the Kingdom and will be an essential part of the Riyadh Metro system.” 




Andrew DeLeone

With Saudi Arabia committing to developing an additional 10,000 km of rail and metro by 2030, and a key factor in this commitment being its ambition to lead the way in reducing transport emissions, relieving traffic congestion, and improving residents’ health and quality of life, DeLeone was confident Alstom could win even more projects in the Kingdom and wider region.

“Alstom has secured a five-year service contract extension for automated people mover systems at Dubai Airports and to provide comprehensive O&M services. We had a similar contract in Jeddah airport and (an) extended service contract. Despite the pandemic, our technology and services have seen growth. We will supply tram orders for the city of Casablanca.”

Last week, at a webinar organized by the Future Investment Initiative, the governor of Saudi Arabia’s Public Investment Fund (PIF) Yasir Al-Rumayyan said that environmental, social, and governance (ESG) programs made solid business sense in the Kingdom and worldwide. 

Alstom was already making progress on developing sustainable and greener modes of transport.

“Today is a big day for Alstom, with our first order of hydrogen trains in France, which is really a historic step in our leadership around CO2-free sustainable urban mobility. The dual mode electric-hydrogen train will mark a historic step in rail transport’s reduction in CO2 emissions, and in the development of a hydrogen ecosystem,” DeLeone said.

In January, Alstom merged with Canada’s Bombardier Transportation. 

Reuters reported the deal to be worth around €5.5 billion ($6.7 billion) and the combined conglomerate will have €15.7 billion in revenues with an order book of €71.1 billion. It will also employ around 75,000 staff in 70 countries.

The Kingdom and the wider region was a significant area for the new combined entity, with over 1,500 people delivering major projects in Riyadh, Dubai, and Qatar, according to DeLeone.

“A large percentage of our workers are in Saudi Arabia, delivering the programs, and we look forward to growth. It’s a place where we (can) grow our business, so we are going to grow our employee presence, supplier presence and grow the local impact.”


Bitcoin drops after report Binance under US probe, Tesla move

Bitcoin drops after report Binance under US probe, Tesla move
Updated 14 May 2021

Bitcoin drops after report Binance under US probe, Tesla move

Bitcoin drops after report Binance under US probe, Tesla move
  • Bitcoin dropped to $45,700, the lowest since March 1, then steadied at $49,312 in Asia morning trade on Friday
  • The world’s largest cryptocurrency fell 17 percent on Wednesday following Elon Musk’s remarks

NEW YORK/LONDON/TOKYO: Bitcoin slid to a 2-1/2-month low on Thursday after a regulatory probe into crypto exchange Binance added to pressure from Tesla Inc. chief Elon Musk’s reversing his stance on accepting the digital currency.
Bloomberg reported on Thursday that as part of the Binance inquiry, the US Justice Department and the Internal Revenue Service have sought information from individuals with insight into its business.
Bitcoin dropped to $45,700, the lowest since March 1, then steadied at $49,312 in Asia morning trade on Friday.
The world’s largest cryptocurrency fell 17 percent on Wednesday following Musk’s remarks that Tesla would stop accepting the digital token as payment for its electric cars for environmental reasons.
“Environmental matters are an incredibly sensitive subject right now, and Tesla’s move might serve as a wake-up call to businesses and consumers using bitcoin, who hadn’t hitherto considered its carbon footprint,” Laith Khalaf, an analyst at AJ Bell, said.
Bitcoin remains about 70 percent higher for the year and is more than 1,000 percent higher than its 2020 low of $3,850.
Binance did not immediately respond to a request for comment. A Binance spokeswoman told Bloomberg that the company doesn’t comment on specific inquiries but takes its legal obligations seriously and engages with regulators in a collaborative fashion.
Ethereum, the second-largest cryptocurrency, dropped to a session low of $3,543.62 and last changed hands at $3,656, down about 4 percent. On Wednesday, ethereum hit a record high of $4,380.64.
Tesla’s announcement on Feb. 8 that it had bought $1.5 billion of bitcoin and would accept it as payment for its electric vehicles has been one factor behind the digital currency’s surge this year.
Musk has faced pressure over bitcoin’s environmental impact. The cryptocurrency relies on computers competing to solve elaborate math problems, which use huge amounts of electricity.
“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk tweeted.
Musk’s comments roiled markets even though he said Tesla would not sell any bitcoin and would resume accepting it as soon as “mining” for it transitioned to more sustainable energy.
In a second tweet on Thursday, Musk denounced the “insane” amount of energy used to produce bitcoin, which pushed bitcoin lower.
Jeffrey Wang, Vancouver-based head of Americas at Amber Group, a cryptocurrency service provider, said broader selling of risk assets in traditional markets was another factor behind Wednesday’s bitcoin plunge.
“I don’t think everything is selling off just because of this news. This was kind of the straw that broke the camel’s back in terms of adding to the risk sell-off,” Wang said.
Bitcoin has struggled since hitting a record $64,895.22 in mid-April, dropping to the cusp of $47,000 just 11 days later before hovering around $58,000 since the start of May.

Environmental concerns
At current rates, bitcoin mining devours about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency showed.
Tesla shares were down 2.4 percent, while the biggest US cryptocurrency exchange, Coinbase, tumbled nearly 9 percent. Smaller cryptocurrencies were less affected by the news.
“The reason given in the tweet is fossil fuel use for the mining of BTC, but most cryptocurrencies have already found more efficient ways to do that and therefore outperformed.”
Cryptocurrency dogecoin lost more than a third of its price on Sunday after Musk, whose tweets had stoked demand for the token earlier this year, called it a “hustle” on the “Saturday Night Live” comedy show.
By Tuesday, however, he was asking his followers on Twitter if they wanted Tesla to accept dogecoin and it jumped on Friday in Asia after Musk tweeted about it again and said he was working on improvements to its transaction systems.
Dogecoin rose 20 percent to 52 cents on Friday according to Binance and last traded at $0.4825.


As Saudi construction sector recovers, price of building materials rises

As Saudi construction sector recovers, price of building materials rises
Updated 14 May 2021

As Saudi construction sector recovers, price of building materials rises

As Saudi construction sector recovers, price of building materials rises
  • While steel made the biggest surge, the growth slowed as the year progressed, going from 40% to 28% in March

RIYADH: The price of building materials, especially steel, rose in the first quarter (Q1) of this year, as construction activity began to recover from the slowdown caused by the coronavirus disease pandemic last year.

According to the latest data from the General Authority for Statistics (GASTAT), the price of steel surged to SR3,514.73 ($937.26) per ton in Q1 of 2021, a 33 percent increase year-on-year and the highest price since 2008.

The cost of ready-mix concrete rose 14 percent year-on-year to SR203.9 per cubic meter during the same timeframe, while cables rose 21 percent year-on-year to SR38.33 per meter.

In addition, wood prices rose 15 percent year-on-year to SR3,067.49 and cement was up 5 percent to SR14.03 per 50kg bag in Q1.

While steel made the biggest surge, the growth slowed as the year progressed, going from 40 percent growth in January to 28 percent growth in March.

The increase in prices for materials comes as construction activity increased in Q1, according to a new report by real estate consultancy firm JLL.

“From a supply perspective, the first quarter recorded an increase in construction activity,” the JLL report said. According to its figures, in the residential sector in Riyadh 7,700 units were handed over in Q1, bringing the total to 1.3 million units in the capital. In Jeddah, around 2,000 units were added, bringing the total to 838,000 units.

The report estimated that 36,000 units in Riyadh and 12,000 units in Jeddah are due to be delivered this year.

FASTFACT

The report estimated that 36,000 units in Riyadh and 12,000 units in Jeddah are due to be delivered this year.

In addition to the increased activity in the residential sector, Riyadh is also set to see an additional 386,000 square meters of office space, 240 square meters of retail space and 2,800 new hotels rooms built this year.

In Jeddah, the city is forecast to gain an additional 43,000 square meters of office space, 200,000 square meters of retail space and 2,700 new hotel rooms.

However, JLL said that while it remained “cautious about the timely delivery of future projects” it believed that going forward “the government initiatives that are pushing Riyadh to be the business hub of the region are expected to spur local and international demand.”

Announced in January this year by Crown Prince Mohammed bin Salman, the ambitious Riyadh Strategy 2030 aims to create 35,000 new jobs for Saudi nationals, pump up to SR70 billion into the national economy and double the size of the capital city’s population to as many as 20 million by 2030.

The increased development in the first quarter is a welcome change from 2020, when construction activity declined in the wake of restrictions due to the pandemic.

According to the Contract Awards Index produced by the US-Saudi Business Council (USSBC), the total value of construction contracts awarded in Saudi Arabia during the third quarter of 2020 declined by 84 percent year-on-year.

However, Albara’a Alwazir, an economist at the USSBC, told Arab News that he was confident the sector would rebound, just as it had done after the downturn between 2016 and 2018. “While numerous projects have been delayed because of the pandemic, the government has stated that there will be a continued focus on megaprojects especially those that relate to Vision 2030,” he added.

This was already evident in the USSBC’s Q4 report, which found that the total value of contracts rose 115 percent quarter-on-quarter in the last three months of 2020.


World Bank: Saudi Arabia among biggest sources of remittances in 2020

World Bank: Saudi Arabia among biggest sources of remittances in 2020
Updated 14 May 2021

World Bank: Saudi Arabia among biggest sources of remittances in 2020

World Bank: Saudi Arabia among biggest sources of remittances in 2020
  • Remittances from Saudi Arabia have been slowly declining since 2015 as oil prices have moderated and the government has encouraged the hiring of Saudi nationals

RIYADH: Saudi Arabia was the third largest source of remittances globally in 2020, just behind the UAE and the US, according to the latest report from the World Bank.

The US was the biggest source country, sending $68 billion abroad last year, while foreign workers in the UAE sent home $43 billion and those in Saudi Arabia transferred $35 billion, said the report, published Thursday. Among middle-income countries, immigrants to Russia were the biggest remitters, sending $17 billion.

Remittances from Saudi Arabia have been slowly declining since 2015 as oil prices have moderated and the government has encouraged the hiring of Saudi nationals. For instance, foreign workers sent $1.8 billion to the Philippines in 2020, down 36 percent from 2015.

Despite the large drop in foreign workers in Gulf Cooperation Council states, remittances from Saudi Arabia held up in 2020 thanks in part to the cancelation of travel to Saudi Arabia, which diverted funds set aside for the Hajj pilgrimage to remittances to Bangladesh and Pakistan, according to the report. Both of those countries offered tax incentives last year to boost remittances from migrant workers abroad, while a devastating flood in July 2020 also led to an increase in payments.

Remittances to the Middle East and North Africa rose by 2.3 percent to about $56 billion in 2020, following a 3.4 percent increase in 2019, the report said. The gains came amid unexpectedly strong inflows to Egypt (up 11 percent to a record $30 billion), the fifth-largest recipient of remittances globally, and to Morocco (6.5 percent to $7.4 billion). Tunisia saw a 2.5 percent increase, while other countries, including Lebanon, Iraq, Jordan, and West Bank and Gaza all experienced double-digit declines.

Globally, remittances to low and middle-income countries fell 1.6 percent to $540 billion, a smaller decline than expected, the World Bank said. The figure is forecast to increase to $553 billion this year and to $565 billion in 2022.

In December, analysis by Arab News of the monthly remittance levels in Saudi Arabia during 2020 showed some big fluctuations throughout the year, as the impact of the coronavirus pandemic began to take hold.

Figures from the Saudi Central Bank (SAMA) showed the biggest spike was in June when the monthly amount surged 60 percent compared with June 2019.

July also witnessed a rise of 32 percent, while August, September, and October saw monthly levels increase 24.7 percent, 28.5 percent, and 19.2 percent, respectively, compared with the equivalent months last year.

Mazen Al-Sudairi, head of research at Riyadh-based financial services company Al Rajhi Capital, told Arab News: “Debt to GDP (gross domestic product) ratio in emerging economies has increased up to 70 percent recently, and the unemployment rate led by (the coronavirus disease) COVID-19 has also increased in countries such as India and the Philippines, which are the countries forming the majority of the expat population in the Kingdom. Therefore, we believe that increased remittances are due to rising unemployment and difficult economic conditions back in the home countries of expats.”

He said another reason why expats may have been sending more funds home was because their surplus income had increased as a result of being unable to travel or spend as much as normal due to COVID-19 restrictions. “Once the unemployment risks recede for expats in Saudi Arabia, as well as in home countries, this level should normalize in our view,” Al-Sudairi added.


US stocks rebound following inflation scare

US stocks rebound following inflation scare
Updated 14 May 2021

US stocks rebound following inflation scare

US stocks rebound following inflation scare
  • Rebound comes despite worries that soaring inflation could trigger interest rate rises

LONDON: US stocks rebounded on Thursday, a day after slumping on worries that soaring US inflation could trigger interest rate rises sooner than expected, and in turn harm global economic recovery.

Focus was also on bitcoin, which resumed sharp falls after Tesla’s Elon Musk stopped allowing people to pay for his electric cars with the cryptocurrency.

While US stocks opened higher, with the Dow adding 0.3 percent, their sharp losses on Wednesday pulled Asian and European stocks along with them on Thursday.

Tokyo’s main stocks index closed down 2.5 percent and European stocks also suffered sharp losses but recovered as the opening bell in New York approached.

With little in the way of news to spur the reversal, this invites “the notion that the scope of recent losses has gone far enough to whet the appetite of buy-the-dippers who have successfully feasted over the last year or so on down moves like the one that has recently unfolded,” said analyst Patrick J. O’Hare at Briefing.com.

Stock markets were already awash with red this week owing to growing fears that the blockbuster global economic recovery and vast stimulus measures will see cashed-up consumers go on a pent-up spending spree that will strain supplies and push up costs.

And those concerns were given oxygen Wednesday by figures showing US consumer inflation spiked at 4.2 percent in April, far higher than estimates and the highest since 2008 just before the global financial crisis kicked in.

That was followed on Thursday by data showing that producer prices jumped by 6.2 percent in April, the highest pace since 2010.

The advances were driven by a rally in commodity prices such as widely used copper, iron and lumber, which are sitting at record or multi-year highs.

“For stocks this might be an even tougher moment, given that companies may find themselves struggling to pass on price increases to customers, hitting profitability and putting the year-long earnings recovery in jeopardy,” noted Chris Beauchamp, chief market analyst at IG trading group.

Tech firms, which blossomed during lockdowns as people were forced to stay home, have led the share-price losses as they are more susceptible to higher interest rates.

The Fed has repeatedly insisted it expects such sharp price spikes but they will be transitory owing to last year’s low base and policymakers will not make any adjustments until they are happy unemployment is under control and inflation is running hot for some time.

However, investors are not convinced and there is growing unease that the central bank could lose control of the situation if it does not act in time, with analysts warning it could risk people’s confidence in the institution.

Tai Hui, at JP Morgan Asset Management, remained broadly upbeat about the outlook for equities, saying that while the sell-off was heavy, the gain in US Treasury yields — a gauge of future interest rates — was less severe.

“The market’s reaction ... (was) mild, reflecting the belief that this jump in inflation will eventually calm and revert closer to the Fed’s long-term target,” he said.

Regarding Bitcoin meanwhile, after Musk cited the environmental impact caused by the computing-intense mining process of creating new units, the cryptocurrency slumped around 16 percent.

It later recovered before trading down around 10 percent at $50,400 on Thursday.


How big is Bitcoin’s carbon footprint?

How big is Bitcoin’s carbon footprint?
Updated 14 May 2021

How big is Bitcoin’s carbon footprint?

How big is Bitcoin’s carbon footprint?
  • Concerns mount about the way bitcoin is ‘mined’ using fossil fuels

LONDON: Tesla boss Elon Musk’s sudden u-turn over accepting bitcoin to buy his electric vehicles has thrust the cryptocurrency’s energy usage into the headlights.

Some Tesla investors, along with environmentalists, have been increasingly critical about the way bitcoin is “mined” using vast amounts of electricity generated with fossil fuels.

Musk said on Wednesday he backed that concern, especially the use of “coal, which has the worst emissions of any fuel.”

So how dirty is the virtual currency?

Power hungry

Unlike mainstream traditional currencies, bitcoin is virtual and not made from paper or plastic, or even metal. Bitcoin is virtual but power-hungry as it is created using high-powered computers around the globe.

At current rates, such bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, data from the University of Cambridge and the International Energy Agency shows. Some bitcoin proponents note that the existing financial system with its millions of employees and computers in air-conditioned offices uses large amounts of energy too.

Coal connection

The world’s biggest cryptocurrency, which was once a fringe asset class, has become increasingly mainstream as it is accepted by more major US companies and financial firms. Greater demand, and higher prices, lead to more miners competing to solve puzzles in the fastest time to win coin, using increasingly powerful computers that need more energy.

Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles, an energy-intensive process that often relies on fossil fuels, particularly coal, the dirtiest of them all.

Green Bitcoin?

Bitcoin production is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year, or between the levels produced by Jordan and Sri Lanka, a 2019 study in scientific journal Joule found.

There are growing attempts in the cryptocurrency industry to mitigate the environmental harm of mining and the entrance of big corporations into the crypto market could boost incentives to produce “green bitcoin” using renewable energy. Some sustainability experts say that companies could buy carbon credits to compensate for the impact. And blockchain analysis firms say that it is possible in theory to track the source of bitcoin, raising the possibility that a premium could be charged for green bitcoin. Climate change policies by governments around the world might also help.

Alternative energy

Projects from Canada to Siberia are striving for ways to wean bitcoin mining away from fossil fuels, such as using hydropower, or at least to reduce its carbon footprint, and make the currency more palatable to mainstream investors.

Some are attempting to repurpose the heat generated by the mining to serve agriculture, heating and other needs, while others are using power generated by flare gas — a by-product from oil extraction usually burned off — for crypto mining.

China crisis

The dominance of Chinese miners and lack of motivation to swap cheap fossil fuels for more expensive renewables means there are few quick fixes to bitcoin’s emissions problem, some industry players and academics warn. Chinese miners account for about 70 percent of production, data from the University of Cambridge’s Center for Alternative Finance shows. They tend to use renewable energy — mostly hydropower — during the rainy summer months, but fossil fuels — primarily coal — for the rest of the year.