GCC Railway: New Phase of Economic Integration and Trade Between GCC Countries

GCC Railway

The 44th Session of the Gulf Cooperation Council Supreme Council will be held in Doha on Tuesday at a time when the GCC countries are working on strengthening their plans for economic and trade integration by adopting the general agreement to connect the GCC countries through the railway project, known as Gulf Railway, and setting the specific date for its implementation and operation in Dec. 2030.

The GCC countries adopted a number of measures to implement this ambitious integrated project, such as the budget of the GCC Railway Authority for the year 2024, which was established last year, in addition to approving a number of its documents and discussing the land transport strategy of the GCC countries and the executive regulations of the unified law for international land transport between them.

These developments came after the GCC Railway Project Committee discussed in detail an asset management system and the operational plan for the project, the Authoritys document numbering system, the project and technical requirements for track junction points between neighboring countries, and cooperation with the Intergovernmental Organization for International Carriage by Rail (OTIF).
These developments come at a time when the momentum of bilateral railway projects in the Gulf countries has been renewed, as Qatar and Saudi Arabia agreed during 2022 to restart the railway line linking the two countries, with the French company SYSTRA chosen to conduct a feasibility study on the line. The proposed high-speed railway, which will connect Doha to Riyadh, is expected to be approximately 550 kilometers long.

Additionally, Oman is cooperating with Saudi Arabia to establish a railway linking Duqm to Riyadh to serve the economic zone that the two countries plan to build in the Al Dhahirah Governorate of the Sultanate of Oman. The UAE and Oman also launched the Oman-Etihad Rail company in September 2022 to implement a 303km railway network to connect the two countries. The project received an additional impetus after the aforementioned company signed a strategic agreement with Mubadala Investment Company, based in Abu Dhabi, to support its development.

In the same context, the Kingdom of Saudi Arabia approved the agreement to establish a railway linking it to the State of Kuwait, as part of the GCC project, in addition to the King Hamad Causeway project to connect Bahrain and Saudi Arabia with a similar line and the QatarBahrain Causeway.

The project, which is considered one of the most prominent joint Gulf projects, aims to facilitate and increase trade movement between the six countries and develop public means of transportation that provide services for transporting people and goods between cities, in a way that enhances cooperation between the countries of the region in the field of transport and communication, thus reducing the cost of trade exchange operations, improving regional connectivity and reducing transportation time and cost between major ports.

The Gulf Railway is expected to contribute to the economic development of all Gulf countries and accelerate the implementation of their joint economic projects, such as the customs union, the common market, and monetary union. It will also enhance trade movement between the GCC countries, provide alternative options for air transport, reduce transport costs in general, increase the pace of regional trade, support the national industries of the six countries, and contribute to providing job opportunities for their citizens, in addition to building the institutional capabilities and skills required to develop the sustainability of railways.

The initial investment cost of the GCC Railway project, whose agreement was concluded in 2004, is approximately $15 billion, subject to increase. The project is to connect the GCC countries with an integrated railway network extending from the State of Kuwait to the Sultanate of Oman, with a total length of 2,177 kilometers, provided that it route begins from Kuwait, passing through Dammam in Saudi Arabia, to the Bahraini capital, Manama. There will be a line from Dammam to Doha via the Salwa border gate and will connect Qatar to Bahrain, and another from Saudi Arabia to the Emirates via Abu Dhabi and Al Ain before going to the Omani capital, Muscat, via Sohar.

The project costs include the construction, maintenance and development of linking roads and main roads in the GCC countries, as well as the costs of preparing and applying unified specifications, regulations and systems, in addition to establishing the transport sector database, and other costs related to transport services and safety. Nonetheless, Cooperation Council decided to leave the approval and regulation to each country individually. Also, the implementation is subject to the plans of each Gulf country according to its readiness and capabilities to implement the system.

The Railway will be used to ship goods first, and then passenger traffic will be operated at a later stage, with more than 95 million tons of goods and 8 million passengers annually being transported along the line by the year 2045. 

In a statement to Qatar News Agency (QNA), Economic expert Dr. Abdullah Al Khater noted the importance of the GCC railway connection, saying that it is part of Gulf and even Arab national security, stressing that in light of the current events and the dangers facing the Arab nation, all political obstacles that hinder the project must be overcome, highlighting in this regard the importance of announcing the projects budget for the year 2024 as an essential step before the launch.

Dr. Al Khater called for separating the political from the economic, saying that we in the Gulf must deal with a vision based on the fact that our homelands, our countries, and the region in general are part of a changing world, while also the focus of global attention, so it is important that the Gulf vision and strategy become integrated, adding that Gulf unity is the basis of work, as there must be interconnection at all economic, political, diplomatic, and even humanitarian levels, and in transportation, which enables the movement of the capital, workers and goods. Therefore, the project to connect the train network comes as a basis that must viewed as national security, economic security and a cornerstone in establishing an integrated Gulf and even Arab economy, he added.

Regarding his aspirations for the upcoming Gulf summit in Doha, Al Khater said, what is required is nothing less than Gulf unity, which will be a cornerstone for a more comprehensive Arab unity, as the risks are great. We want a conscious economic unity that is aware of the magnitude of the risks that threaten the nation, and as a first step in this direction, it must be a means of creativity in operating the economy, as well as the business sector, enabling young people to establish and develop their projects continuously and sustainably, he said, adding as an example, the Gulf common market, the monetary union, and other complementary projects are all areas that open the doors of economic cooperation and are in the interest of the Gulf economy, in order to make it capable of dealing with changes in the region and the world and establishing a network of interests that supports the aspirations of the peoples of the region for economic unity.

He pointed out that the implementation of an effective Gulf railway transport system is an important stage in the economic integration between the countries of the Gulf Cooperation Council, given that transport is one of the main economic sectors that facilitates the exchange of goods and products and stimulates the attraction of local and foreign investments, especially since the investor is looking for countries with integrated infrastructure and high efficiency.

Officials in the Gulf logistics sector had previously expected that the economic returns on the train network project linking the Gulf countries would be very large, given the length of the Gulf railway line, which will be the second longest railway in Asia after the Chinese railways.

The idea of launching the GCC Railway project dates back to 2009, when the six Gulf Cooperation Council countries approved it after discussions that continued for years. It was supposed to end in 2018, but the project ran into trouble due to the challenges of financing it, which were exacerbated by the decline in oil prices in 2014, and the spread of the COVID-19 pandemic in 2020, which led to its delay, but the six countries agreed in 2021 to establish the GCC Railway Authority to carry out the tasks of coordinating and supervising the implementation of the project.

(QNA)