DUBAI
Leaders from across the Gulf Cooperation Council’s (GCC) rail industry are set to discuss financing methods for Gulf Railway, a proposed megaproject connecting all six of the GCC countries, at next week’s Middle East Rail event, according to Abdullah Al Katheeri, Director General of the Federal Transport Authority.
Following recent speculation that the network would be financed using the private public partnership (PPP) model, Al Katheeri noted at a press conference on Monday afternoon that financing would be a central subject at the summit.
“Finance will be discussed, as will the opportunities around financing. There will be a lot of discussion,” he said, adding “a lot of the concerned parties will be there, from the finance side and the client side. It’s one of the most important matters to be discussed.”
With current estimates for the cost of Gulf Railway running as high as $250 billion (Dh917.5 billion), there is some scepticism as to whether or not banks would have sufficient appetite for the risks associated with such a greenfield rail project, according to sources quoted by the Middle East Economic Digest (Meed) on February 23.
Highlighting the importance of financing to rail projects in the region, event organiser Jamie Hosie, General Manager at Terrapinn Middle East, said: “there’s a specific morning focused on alternative investment strategies, or fund modelling systems, that we are going to start looking at in the region.
He declined to say more, only adding “we are covering this subject, both from the private sector perspective, and the public sector perspective.”
Gulf News reported in January 2017 that the deadline for the rail network had been pushed back three years to 2021, amid government budgets that have been squeezed by low oil prices.
“In principle, we agreed on 2021 ... That is the target. Whether we can possibly achieve or not, that would depend on the internal plan of each country,” Abdullah Al Nuaimi, Minister of Infrastructure Development, said at the beginning of 2017.