Substantial increases in road investment in Saudi Arabia has improved connectivity and generated employment

 

In recent years Saudi Arabia has been extending and upgrading its national road and highway network to meet the combined demands of a growing population, urbanisation, economic growth and a sharp increase in motor vehicle use.

There has been major public and private investment in multi-modal transport spanning railways, metros, traffic systems, buses, bridges and roads. The road system now covers more than 68,000 km in total. Given extremely high temperatures, the authorities have had to ensure road-surfacing materials are carefully selected to protect against deformation. High mountain ranges – especially in the south-west of the country – have also required specialised construction techniques.

Private Sector Input

One important innovation is that the Ministry of Transport (MoT) is considering the use of a public-private partnership (PPP) model for new road projects. This idea is understood to have been proposed in a report commissioned by the MoT on the potential for wider privatisation of transport projects. One suggested target was to introduce six PPP-funded toll roads in or around the capital Riyadh by 2020.

The minister of transport, Nabil Al Amoudi, told local media in December 2018 that the idea was still under consideration. An initial step would be to submit potential road toll rates for regulatory approval. There have been contemporaneous efforts to improve the PPP framework and make it more attractive for foreign participants.

These have included better guarantees for investors, an appeals committee to adjudicate disputes and potential exemptions from some restrictive labour legislation (see overview).

In July 2018 it was reported that the MoT had awarded a total of 23 new road-building projects with a value of $461.3m. They were located in various parts of the country, with seven in Makkah and six in Riyadh. A further four were in Assir, two in the Eastern Province, and one each in Al Bahah, Hail, and Tabuk. While investment in expanding the road network will continue apace, the authorities also recognise that in some urban areas vehicle traffic is reaching a saturation point, largely thanks to a marked increase in motor vehicle usage in recent years. In part as an attempt to allay this, the Riyadh Metro system will initially carry 1.16m passengers a day, rising to 3.6m after a number of years. At the same time, the new bus system will carry about 900,000 passengers a day, linking wider parts of the city to the metro network.

Ride-Hailing Services

One factor that may make a significant contribution to changing patterns of vehicle use is the spread of ride-hailing services. Among various companies operating in this sector, US-based Uber has moved into Saudi Arabia; according to Bloomberg, the Saudi government owns more than 10% of the firm through direct and indirect holdings. By mid-2018 Uber was operating in 18 cities across the country: Jeddah, Medina, Makkah, Taif, Yanbu, Jizan, Asir, Al Bahah, Tabuk, Riyadh, Qassim, Hail, Kharj, Dammam, Khobar, Ahsa, Qatif and Jubail.

Uber’s arrival coincided with a change in local legislation allowing women to drive for the first time. To take advantage of this opportunity, the company launched Masaruky, a women’s mobility initiative, designed to respond to their needs both as Uber drivers and as customers. Surveys conducted by the company showed that 31% of Saudi women were interested in driving to earn money. Uber was also considering a new feature that would allow female ride-hailing customers to express a preference for being served by women drivers.

Uber has stated that Saudi Arabia is one of their largest markets in the Middle East, Europe and Africa, and that they have more than 200,000 partners on board in the country. Additional services (such as Uber Eats, a food delivery service) are also being introduced, initially in Riyadh.

Regional Connections

Saudi Arabia and Bahrain are working on a major $3bn-4bn PPP project to build the King Hamad Causeway, linking the two countries and running parallel to the existing King Fahd Causeway. The main aim of the new 25-km connection is to allow crossings by passenger and freight trains and vehicles, thereby relieving pressure on the existing causeway.

In late 2018 the two countries’ governments said they were launching a tender for consultancy services. Work on the bridge was scheduled to start in mid-2021 and continue for approximately three years. A tender for the main construction work is to be issued in the first half of 2019.

In neighbouring UAE, Abu Dhabi has been offering its first big PPP motorway project, a 25-year concession to upgrade, finance, operate and maintain the 327-km Mafraq-Al Ghweifat highway linking the emirate to Saudi Arabia. The project is valued at around $2.7bn. There has been interest from a number of consortia, including Macquarie Group of Australia, Strabag of Austria and China Communications Construction Company. The announcement of the preferred bidder was expected in early 2019.

There have also been reports that long-standing plans to build a bridge or causeway linking Saudi Arabia and Egypt may be moving forward. The proposal was first made by King Salman bin Abdulaziz Al Saud during a visit to Egypt in April 2016. At the time, the idea was to support increased trade flows between the two countries, as well as facilitate travel by Egyptian pilgrims for the Hajj.

For its part, Egypt is also said to be interested in increasing population density in the strategic Sinai Peninsula. The project would allow for the passage of vehicles, freight and passenger trains, and the bridge would connect Saudi Arabia’s north-western coastal city of Tabuk to the Egyptian tourist resort city of Sharm El Sheikh, on the souther tip of the Sinai.

Road Safety

Progress has also been made on tackling Saudi Arabia’s high rate of road traffic accidents. It is estimated that road traffic accidents cause around SR4.4bn ($1.2bn) of material losses every year. Speaking in late 2018, Mohammed Mesfer Al Aboud, director-general of the safety department at the MoT, said there had been a 33% reduction in deaths caused by road traffic accidents during the year, to 13,221. This represented an annual death rate of 8 per 100,000 inhabitants, a major reduction on the 26 per 100,000 registered in 2015. Al Aboud said that the main causes of death on the roads have traditionally been reckless driving, distraction, tyre blow-outs, collisions with camels and a lack of safety equipment on vehicles. He attributed part of the improvement to the black points system, by which drivers are penalised for violating traffic and safety regulations and can potentially lose their licences. He calculated that the new system was delivering a financial saving of SR165m ($44m).

In November 2018 the MoT had also announced it would be spending SR773m ($206.1m) on eight projects to improve road safety. Among the projects are a new National Road Safety Centre, the purchase of various types of road traffic equipment and the introduction of rumble strip projects designed to alert drivers to changing conditions. Some of the money was also earmarked to implement recommendations made as part of an engineering and consultancy services review carried out in 2017. This had identified a number of traffic accident black spots and called for an update of the ministry’s safety documentation and policies. Further safety measures are planned, including safety facilities at animal crossings, protective barriers for lampposts and improved street lighting. There will be 23 projects in total, with a total cost of SR2.2bn ($586.5m).

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