Work in progress: Connecting the country and improving logistics

Economic growth has created an unprecedented demand for construction equipment and raw material to build infrastructure, industrial bases, residences, retail outlets and all the other elements that are driving Qatar’s economy. This in turn requires a robust transport and logistics network to import and export goods and material. However, the process of bringing these goods and materials into the country is currently hindered by a number of bottlenecks.

New Links

The government has embarked upon a multibillion-dollar construction programme to build the required transport and logistics links. Qatar National Vision 2030 provides a broad framework that shapes these investments, outlining plans for constructing a robust infrastructure network to drive economic growth. Several major projects have also been prioritised to meet obligations for hosting the FIFA World Cup in 2022. Key construction projects that have been started or are in the pipeline include investments to improve or build new rail, sea, air and road links.

The country’s geography limits road connections to the border with Saudi Arabia. However, while the government is rapidly improving the local road network, surface transport through Saudi Arabia is inadequate for the type and quantity of building materials and equipment that are required for Qatar’s construction programme. Existing air and seaports lack the capacity to transport the goods and materials required within the country. Developing effective commercial sea links is thus critical to support Qatar’s growth.

The government is aware of this need and is currently working on the New Port Project to address it. Construction of the port, which is estimated to cost over $7.4bn, started in 2011, when the government awarded one of the single biggest contracts under the project to deepen and reinforce the basin for the port. The $880m contract, the first of nine contracts for the project, was awarded to China Harbour Engineering and Construction. The second major contract was issued in 2013 to dredge and deepen a 10-km channel to ensure the biggest container ships can access the port.

The $1.23bn deal was awarded to Middle East Dredging Company. The third, $1bn contract was awarded to a joint venture of Consolidated Contractors Company and Teyseer, a local firm, in March 2013 to construct core infrastructure for the container terminal.

The port is expected to handle the first shipments by 2016 and will eventually cover a 26.5-sq-km site, which will be designed to integrate with rail and road links and a new industrial and economic zone. The first terminal will have the capacity to handle 2m containers, considerably more than the old port, which handled 376,000 containers in 2012. Further expansions are set to increase total capacity to over 6m containers by 2030. Specific facilities will be built to enable shipments of grain, livestock and industrial material.

The facility will allow the government to eventually decommission the current Doha port, which can then be repurposed to serve other needs. The Ras Laffan Port will continue serving the energy sector and the Mesaieed Port will focus on supporting shipments for Doha, due to its proximity. Construction Week Online estimates there are 4000 people working on the New Port Project, with expectations that this will increase to 19,000 as more contracts are issued. Work on the port is expected to finish in 2022.

Airport

The second major transport and logistics construction project is nearing completion. The Hamad International Airport handled its first cargo shipment, destined for Qatar Petroleum, in December 2013. The new airport is being built at a cost of $15.5bn and has an expected capacity of 30m passengers under phase one of development. The airport will eventually be able to handle 50m passengers and will have one of the longest runways in the world, enabling access to jumbo passenger and cargo planes. Bechtel, the US engineering company, won the contract for engineering and project and construction management. The airport, which is expected to be fully functional by 2015, will have one of the largest cargo terminals in the world with a capacity to handle 2.5m tonnes of cargo. It will also be able to manage over 5700 shipments, more than doubling capacity at the existing airport, and an automated storage system will enable efficient transfers of cargo into and out of the country. Qatar Airways reports that the airport will have 42 loading docks for airplanes and facilities to handle livestock and other shipments. The cargo terminal will be connected with the road network, with 32 loading docks for trucks.

On The Road

The third major component of Qatar’s transport strategy is an ambitious highway project that will improve connectivity between the country’s industrial zones and major towns, as well as with neighbouring countries. According to Trade Arabia, Qatar will issue contracts worth over $20bn to upgrade and build the national highway system. In addition to local highways, Qatar and Bahrain have agreed to build a 40-km causeway linking the two states. The concept was approved in 2005 and is expected to cost at least $4.5bn. However, the technical design is still under way, with no fixed deadline for starting construction.

Rail

Finally, Qatar is gradually developing plans to develop a rail network that is integrated with the country’s air, sea and road networks. The six GCC members have been negotiating a regional rail network for several years. The ambitious project, expected to cost more than $200bn according to KPMG, requires a tremendous level of coordination on Customs and duties, import and export laws, and technical consistency across the network. Each country is expected to build the local network, which will link at the borders. Saudi Arabia and the UAE have started construction, while Oman is still in the design and planning stage. Qatar Rail, the entity responsible for the urban and national rail systems in Qatar, has begun construction of the metro lines but is yet to commence work on the national rail system. The planned network is envisioned to include a high-speed rail link between Doha and Bahrain and another line to the border with Saudi Arabia. The rail network is expected to include 350 km of tracks, enabling passenger trains to travel at up to 220 km per hour. The construction of an efficient rail system is a vital component of Qatar’s transport strategy. Freight trains can replace the equivalent of 50 trucks due to their capacity, enabling efficient transfer of goods and materials and reducing carbon and other emissions.

There are challenges to completing all these large-scale developments on time as construction projects for transport and logistics themselves require access to global supply chains. As the greatest benefit of the network will be improved regional connectivity, delays on key projects such as the Qatar-Bahrain Causeway would likely have significant knock-on effects. The broader regional rail network, for instance, will bypass Qatar without the link to Bahrain. Building transport links that both improve logistics and help connect the country with global supply chains will therefore be critical to delivering the long list of other projects.

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The Report: Qatar 2014

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