On Track Rail Boom in the UAE and GCC - Breakbulk · PDF file1 / 15 October 2015 On Track Rail...
Transcript of On Track Rail Boom in the UAE and GCC - Breakbulk · PDF file1 / 15 October 2015 On Track Rail...
/ 15 October 20151
On TrackRail Boom in the UAE and GCC
Breakbulk Abu Dhabi27 October 2014
Teresa LehovdHead of Market IntelligenceHöegh Autoliners
Mega Forces Drive Rail Growth Across the World
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Smart Mobility
Population
IndustrializationEnvironment
Connectivity Urbanization
Types of Rail Projects
Long Distance
Regional
City & Suburbs
• High Speed Rail• Heavy Rail
• Inter-City • Light Rail
• Metro, Light Rail• Trams, Streetcars• Monorail• APM, Cable cars
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Integrated Mobility
Solutions
Urban Smart Mobility Projects Dominate acrossthe World
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34 40
88
48
10187
204
154
Heavy Rail High-Speed Rail Light Rail Metros
Rail Projects by Type
sep.08 sep.15
No. of projects
Rail Projects Boom in All Parts of the World
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537
9 4
145
623
317
119
43
5
290
17
125
15
Africa Asia Oceania C.America
Europe S.America
N.America
MiddleEast
Rail Projects by Region
sep.09 sep.15
No. of projects
GCC: Rail Drives Regional Transformation
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Unprecedented Investment Scale
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Oman• $16bn• 2.240km National Rail
Network
Qatar• $46,6bn • Qatar Integrated
Transport Project
Bahrain• $8bn• Bahrain Rapid
Transport Network
GCC rail network• $15,4bn• Cross-border
coordination
UAE• $27bn• 1.200km National
Network (Etihad Rail)• Metro & Light Rail
Kuwait• $17bn • Metropolitan Rapid
Transit • 574 km National
railway network
Saudi Arabia• $119bn – 140bn• 19 lines including GCC
Rail Link connections• 9.900km of new rail
lines $250bn
Saudi Arabia: Massive Expansion of National Rail Network
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ExecutionConstruction delays
Haramain High Speed Medina, Jeddah and Mecca
Feasibility studyRiyadh-Dammam High Speed
Phase 2: Planning; contract awards in 2016?
North-South RailMineral route + passenger rail
PlanningPrequalification of contractors end 2015; contract awards in 2016
Saudi LandbridgeJeddah, Riyadh and other
western cities
PlanningCauseway and rail line – status:Link to Bahrain and other GCC
Saudi Arabia Plans a Metro in Every Major City
City Description Value $bn
Stage Finish
Riyadh Metro; 6 lines176.5km; 85 stations
22,5 Construction; Government moves to cutspending
2019
Mecca Metro and Bus Network; 6 lines 182km; 88 stations
16,5 Under development1st phase of construction contracts to be awarded by end of this year
1st phase: 2020
Jeddah Metro and Light Rail3 lines 152km; 92 stations
10,5 Design stage; tenders for construction expected in 2016
2020-2022
Medina Metro & Urban Rail 3 lines; 95km
1 Feasibility studiesand preliminary design
2020
Dammam Metro and Urban Rail 9 Early planning
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Qatar: Giant Integrated Transport Project to be ready for FIFA World Cup 2022
Integration of 3 major projects connectingto the GCC Rail Link; completion 2020• Doha Metro ($21bn) Under construction
• 4 lines: Gold, Red, Green; 95 stations• Initial testing to start in late 2016• First phase of metro network due for
completion in 2019
• Lusail Light Rail Transit: Under construction
• 4-line tram network
• 528km Long-distance passenger and freightnetwork – Project management consultancytendered
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UAE Builds on its Dubai Metro Success1.200km UAE National Network (EtihadRail) – completion 2018• 3 phases; Phase 1 completed; Phase 2 re-
tendered early this year
Dubai Metro extention – under development• «Route 2020» new metro line that will
connect to the Dubai Expo • Extension of existing Red and Green lines • New line to run through old Dubai and also
provide a link to the Dubai station on the UAE’s federal Etihad Railway
• Connection to the new Al-Maktoum airport
Abu Dhabi metro and light rail network• Design stage, waiting to be tendered
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Early Stages of Kuwait Railway Development• 511km National railway network –
completion 2028• 90 stations• 2 phases• Connection to the GCC rail
network
• 200km Kuwait City Metro (K-Metro) System• 170km; 5 phases up to 2035
• After long delays, tenders for bothprojects are expected early in 2016
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Oman’s First Mega Rail Investment• 2.144km national rail system connecting Muscat, Sohar, Duqm and
Salalah• Value: $15,7bn• Project initiated 2014; estimated completion 2018• Sohar-Buraimi link – bidding under way• Link to UAE is uncertain as Etihad Rail dropped plans for UAE links to Oman
in June• Construction to start by the end of 2015
• Muscat Metro and Urban Rail
• Early planning stages
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Bahrain Rail Projects at Early Development Stage
• King Fahd Rail Causeway with S. Arabia• 90km rail link to the mainland Saudi Arabia as part of the GCC rail network,
funded by GCC
• Feasibility studies
• Light Rail Network• 22km elevated double track
• Feasibility studies
• Bahrain is preparing to tender a consultancy study
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A Railway without BordersGCC Railway Agency to Coordinate the Project
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Current Challenges
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Funding of new and ongoing projects
Delays in contract awards
Scaling back on projects
Cancellations of future projects
Price pressure
New limitations
Resource bottlenecks
Security concerns
GCC Hard Reality
Oil price & revenues
Large-scalecapital
spending
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Draw down onreserves
DebtPPP
Closing the Funding GapDiversified Project Funding
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Bonds & SukukOmanBahrainSaudi Arabia
PPPKuwaitDubaiQatarOman
DebtBonds & SukukBank loansExport credit
GCC Project Funding Prospects
Description S. Arabia UAE Qatar Kuwait Bahrain OmanFinancial reserves
660 77 210 35 5,6 15
2015 budgetbreakevenoil price
103 73 59 47 94 94
Fiscalposition
Deficit Deficit Deficit Deficit Deficit Deficit
Fundingsolidity
Strong Strong Strong Strong Weak Strong?
Impact onprojects
Some cutsin spending
Minor Minor Speed up
spending
Cuts in spending
Cuts in spending
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Global Rolling Stock Industry in Transition
Access to projectfinancingbecomes
a key to sucess.
Growing demandattracts rolling stock productionto large markets
Heatedcompetition
forcesconsolidation
Emergence ofChina changesthe industrycompetitivedynamics
Industry in Transition
Conclusions
• Rail will be an integral part of the future mobility solutions across theworld
• Emerging and developed countries alike invest vast amounts of moneyin rail infrastructure
• $250bn will be invested in GCC’s booming rail project market
• Project funding will increasingly be diversified
• The current rolling stock industry structure is under pressure
• Solid potential for Breakbulk industry in the region
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Questions?
Railway Boom & Gloom Saudi Arabia
Kim Rathsack CEO, Almajdouie Logistics
Kim Rathsack• CEO, Almajdouie Logistics• Appointment date: November 2014• 26 years of experience in the industry working in France,
Russia, Ukraine, China and Dubai, amongst others
Agenda• Freight Market Outlook• Post Rail Forecast• Road Freight• Rail Freight• Air Freight• GCC Rail Network• Where & Why we need to be?• Challenges – the big picture!!• Conclusion
Freight Market Outlook
$13 BillionLogistics market
3.2% GDP
95.5 %Road freight
0.8 %Air freight
3.7 %Rail freight
Post Rail Forecast – 2016
2.2 %Road freight increase
5.3 %Air freight increase
10 %Rail freight increase
Road Freight
.Positive:• road haulage is driven by household
spending, consumer demand and themining sector
• The government intends to investUSD140bn in the country's transportnetworks over the next 10 years
Negative:
• Congestion: King Fahad Causeway• Road Density: ranked 5th lowest in
the region• Underdeveloped roads: outside
major cities
Rail Freight
Positive:• Rail freight volumes to be
boosted by North-South Railway& Landbridge initiative
Negative:• Coordination between GCC Countries• Lack of service providers of intermodal
logistics• Rail freight network is underdeveloped
considering the size of the country
Air Freight
.Positive• Middle Eastern air freight carriers,
including Saudia, have grown their totalcapacity by 17.1% y-o-y to March 2015
• Private consumption - a major driver ofair freight volumes, especially inrelatively wealthy countries where thepopulation can afford to import higherend products transported by air
• The pharmaceuticals sector given theindustry's need for timely pressure- andtemperature-controlled transportation(worth $7.56bn)
Negative
• Remains less connected to internationalair freight services
New Cargo ProspectsThe infrastructure in the region remains in a full steamprogression, both as supporting of the main industriesdriving the economy (O&G & Petrochemical) as well as aKEY to diversifying the region economy – we are seeing theregion develop competitive advantages in the trade andlogistics sector – Dubai being a global air hub and the rest ofthe GCC following suite.
GCC Rail Network
The rail network plan comes as part of alarger drive to increase infrastructureprojects across the GCC which areforecasted to exceed $86 billion in 2014. The collective GCC rail sector isexpected to spend $200 billion as the sixmember countries – Saudi Arabia,Bahrain, UAE, Kuwait, Oman, Qataraim to complete the integrated GCC-wide network by 2018.
Where & Why we need to be?• We cannot ignore the growing rail sector within the
infrastructure market, estimated at $300 Billion. As aresult, we were able to work with the recent Rail Links inSaudi Arabia – an area that we supported since ourexistence in 1965
• However, we also understand the threats and opportunities
the new build rail system pose to the land transport sector.Therefore, we are geared to provide our clients withvalued added services within the intermodal logisticsmodel
The Big Picture
The Macro challenges • Political risk• Economic reforms• Slow cultural transformation• Narrow diversification• State Control• Fiscal freedom The Micro challenges
ConclusionWe also understand the challenges that come with lower oil prices and thestrategic direction of GCC governments to diversify to new areas ofcompetitive advantage. How to stay ahead of the curve? • Leverage on current assets to serve a wide and varying sectors and the
freight forwarding community at large• Watch the trends closely & build competences to tap into emerging sectors• Continue to build alliances & joint ventures in key niche services / sectors• Remain risk-averts building on the values of our shareholders