Business | Investment

Thales eyes more transportation joint ventures in the Middle East

French giant plans to bid for $11b Etihad Rail project

  • By Shweta Jain, Senior Reporter
  • Published: 00:00 April 13, 2011
  • Gulf News

A Dubai Metro train passes by Shaikh Zayed Road
  • Image Credit: Hadrian Hernandez/Gulf News
  • Thales is responsible for installing signalling, communications and fare collection systems on the Dubai Metro’s Red and Green lines.

Dubai: Thales, a leading global supplier of rail control systems and services for transport, is eyeing additional joint ventures with local companies in the Middle East.

The company presently has 11 joint ventures with local companies in the region, according to the company's top official.

In line with its strategy to expand business in the region — which currently accounts for 10 per cent of Thales' global revenues (in aerospace, space, transportation, security systems) — the €13.1 billion (Dh69.85 billion) French electronic systems giant is also planning to bid for the Etihad Rail project in Abu Dhabi, said Olivier Badard, President, Thales International Middle East and Western Asia.

"We have 11 joint ventures in this region [that stretches from Egypt to India] with local companies. We do expect the number of joint ventures that we have in the region to grow as it testifies to Thales' investment and commitment to work with the local industry," Badard told Gulf News.

"We are always studying capabilities and developing relationships with local industries."

The company is already doing business with the Roads and Transport Authority in Dubai and is installing signalling, communications and fare collection systems for the Dubai Metro's Red and Green lines.

Commenting on the Etihad Rail project, Badard said: "Our relationship with RTA is giving us a unique opportunity to promote the capabilities that we have in the UAE for the Etihad Rail project."

He added that Thales has not yet signed a contract with the Abu Dhabi company.

"It is my understanding that Etihad Rail is in the process of receiving tenders from civil works and other companies at the moment.

"We are currently involved in responding to requests that are coming in to understand the systems that Thales could build for Etihad Rail in the future as the project develops," he said.

The $11 billion Etihad Rail project is designed to link the entire UAE and provide a link to the rest of the Gulf, with the first phase of the network to be ready in June involving investment of Dh40 billion.

Localising capabilities

With plans to capitalise on the $80 billion future public transport boom expected to take place in the region, Thales' intent is to localise its capabilities and leverage them and make them available for all other transport, namely both urban and mainline projects, both passenger and freight, according to Badard.

"We will focus on dev-eloping that in the region over the next several years," he said.

"Our intention is to continue and leverage what we have built here in Dubai, and to assist and serve a demand for future projects in the transportation domain in the GCC."

Also involved in a number of existing rail projects in Saudi Arabia such as the Makkah metro, Thales currently boasts two centres of expertise in the region — one in Saudi Arabia, which is dedicated to the Saudi market, and "what we have built over the last five years in Dubai, would be dedicated to the GCC market", as Badard pointed out.

Asked about Thales' projected increase in revenues from the Middle East, Badard said: "Obviously, the company will continue to grow, but even through the growth of the company we expect the percentage that the Middle East represents in the global business of Thales to also majorly grow over the next several years because large investments are being made in the region."

He did not, however, elaborate on the increase.

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