On Track Rail Boom in the UAE and GCC

Transcription

1 On Track Rail Boom in the UAE and GCC Breakbulk Abu Dhabi 27 October 2014 Teresa Lehovd Head of Market Intelligence Höegh Autoliners 1 / 15 October 2015

2 Mega Forces Drive Rail Growth Across the World Population Connectivity Smart Mobility Urbanization Environment Industrialization 2 / 15 October 2015

3 Types of Rail Projects Long Distance Regional City & Suburbs High Speed Rail Heavy Rail Inter-City Light Rail Metro, Light Rail Trams, Streetcars Monorail APM, Cable cars Integrated Mobility Solutions 3 / 15 October 2015

4 Urban Smart Mobility Projects Dominate across the World Rail Projects by Type No. of projects Heavy Rail High-Speed Rail Light Rail Metros sep.08 sep.15 4 / 15 October 2015

5 Rail Projects Boom in All Parts of the World Rail Projects by Region No. of projects Africa Asia Oceania C. America Europe S. America N. America Middle East sep.09 sep.15 5 / 15 October 2015

6 GCC: Rail Drives Regional Transformation 6 / 15 October 2015

7 Unprecedented Investment Scale Saudi Arabia $119bn 140bn 19 lines including GCC Rail Link connections 9.900km of new rail lines Kuwait $17bn Metropolitan Rapid Transit 574 km National railway network Oman $16bn 2.240km National Rail Network $250bn GCC rail network $15,4bn Cross-border coordination Qatar $46,6bn Qatar Integrated Transport Project UAE $27bn 1.200km National Network (Etihad Rail) Metro & Light Rail Bahrain $8bn Bahrain Rapid Transport Network 7 / 15 October 2015

8 Saudi Arabia: Massive Expansion of National Rail Network Haramain High Speed Medina, Jeddah and Mecca Execution Construction delays Riyadh-Dammam High Speed Feasibility study North-South Rail Mineral route + passenger rail Saudi Landbridge Jeddah, Riyadh and other western cities Link to Bahrain and other GCC Phase 2: Planning; contract awards in 2016? Planning Prequalification of contractors end 2015; contract awards in 2016 Planning Causeway and rail line status: 8 / 15 October 2015

9 Saudi Arabia Plans a Metro in Every Major City City Description Value $bn Riyadh Mecca Jeddah Medina Metro; 6 lines 176.5km; 85 stations Metro and Bus Network; 6 lines 182km; 88 stations Metro and Light Rail 3 lines 152km; 92 stations Metro & Urban Rail 3 lines; 95km Stage 22,5 Construction; Government moves to cut spending 16,5 Under development 1 st phase of construction contracts to be awarded by end of this year 10,5 Design stage; tenders for construction expected in Feasibility studies and preliminary design Dammam Metro and Urban Rail 9 Early planning Finish st phase: / 15 October 2015

10 Qatar: Giant Integrated Transport Project to be ready for FIFA World Cup 2022 Integration of 3 major projects connecting to the GCC Rail Link; completion 2020 Doha Metro ($21bn) Under construction 4 lines: Gold, Red, Green; 95 stations Initial testing to start in late 2016 First phase of metro network due for completion in 2019 Lusail Light Rail Transit: Under construction 4-line tram network 528km Long-distance passenger and freight network Project management consultancy tendered 10 / 15 October 2015

11 UAE Builds on its Dubai Metro Success 1.200km UAE National Network (Etihad Rail) completion phases; Phase 1 completed; Phase 2 retendered early this year Dubai Metro extention under development «Route 2020» new metro line that will connect to the Dubai Expo Extension of existing Red and Green lines New line to run through old Dubai and also provide a link to the Dubai station on the UAE s federal Etihad Railway Connection to the new Al-Maktoum airport Abu Dhabi metro and light rail network Design stage, waiting to be tendered 11 / 15 October 2015

12 Early Stages of Kuwait Railway Development 511km National railway network completion stations 2 phases Connection to the GCC rail network 200km Kuwait City Metro (K- Metro) System 170km; 5 phases up to 2035 After long delays, tenders for both projects are expected early in / 15 October 2015

13 Oman s First Mega Rail Investment 2.144km national rail system connecting Muscat, Sohar, Duqm and Salalah Value: $15,7bn Project initiated 2014; estimated completion 2018 Sohar-Buraimi link bidding under way Link to UAE is uncertain as Etihad Rail dropped plans for UAE links to Oman in June Construction to start by the end of 2015 Muscat Metro and Urban Rail Early planning stages 13 / 15 October 2015

14 Bahrain Rail Projects at Early Development Stage King Fahd Rail Causeway with S. Arabia 90km rail link to the mainland Saudi Arabia as part of the GCC rail network, funded by GCC Feasibility studies Light Rail Network 22km elevated double track Feasibility studies Bahrain is preparing to tender a consultancy study 14 / 15 October 2015

15 A Railway without Borders GCC Railway Agency to Coordinate the Project 15 / 15 October 2015

16 Current Challenges Funding of new and ongoing projects Delays in contract awards Scaling back on projects Cancellations of future projects Price pressure New limitations Resource bottlenecks Security concerns 16 / 15 October 2015

17 GCC Hard Reality Oil price & revenues Large-scale capital spending 17 / 15 October 2015

18 Closing the Funding Gap Diversified Project Funding Draw down on reserves Debt Bonds & Sukuk Bank loans Export credit PPP Kuwait Dubai Qatar Oman PPP Debt Bonds & Sukuk Oman Bahrain Saudi Arabia 18 / 15 October 2015

19 GCC Project Funding Prospects Description S. Arabia UAE Qatar Kuwait Bahrain Oman Financial reserves 2015 budget breakeven oil price Fiscal position Funding solidity Impact on projects , Deficit Deficit Deficit Deficit Deficit Deficit Strong Strong Strong Strong Weak Strong? Some cuts in spending Minor Minor Speed up spending Cuts in spending Cuts in spending 19 / 15 October 2015

20 Global Rolling Stock Industry in Transition Growing demand attracts rolling stock production to large markets Emergence of China changes the industry competitive dynamics Industry in Transition Access to project financing becomes a key to sucess. Heated competition forces consolidation

21 Conclusions Rail will be an integral part of the future mobility solutions across the world Emerging and developed countries alike invest vast amounts of money in rail infrastructure $250bn will be invested in GCC s booming rail project market Project funding will increasingly be diversified The current rolling stock industry structure is under pressure Solid potential for Breakbulk industry in the region 21 / 15 October 2015

22 Questions?

23 Railway Boom & Gloom Saudi Arabia Kim Rathsack CEO, Almajdouie Logistics

24 Kim Rathsack CEO, Almajdouie Logistics Appointment date: November years of experience in the industry working in France, Russia, Ukraine, China and Dubai, amongst others

25 Agenda Freight Market Outlook Post Rail Forecast Road Freight Rail Freight Air Freight GCC Rail Network Where & Why we need to be? Challenges the big picture!! Conclusion

26 Freight Market Outlook $13 Billion Logistics market 95.5 % Road freight 3.2% GDP 0.8 % Air freight 3.7 % Rail freight

27 Post Rail Forecast % Rail freight increase 2.2 % Road freight increase 5.3 % Air freight increase

28 Road Freight Ṗositive: road haulage is driven by household spending, consumer demand and the mining sector The government intends to invest USD140bn in the country's transport networks over the next 10 years Negative: Congestion: King Fahad Causeway Road Density: ranked 5th lowest in the region Underdeveloped roads: outside major cities

29 Rail Freight Positive: Rail freight volumes to be boosted by North-South Railway & Landbridge initiative Negative: Coordination between GCC Countries Lack of service providers of intermodal logistics Rail freight network is underdeveloped considering the size of the country

30 Air Freight.Positive Middle Eastern air freight carriers, including Saudia, have grown their total capacity by 17.1% y-o-y to March 2015 Private consumption - a major driver of air freight volumes, especially in relatively wealthy countries where the population can afford to import higher end products transported by air The pharmaceuticals sector given the industry's need for timely pressure- and temperature-controlled transportation (worth $7.56bn) Negative Remains less connected to international air freight services

31 New Cargo Prospects The infrastructure in the region remains in a full steam progression, both as supporting of the main industries driving the economy (O&G & Petrochemical) as well as a KEY to diversifying the region economy we are seeing the region develop competitive advantages in the trade and logistics sector Dubai being a global air hub and the rest of the GCC following suite.

32 GCC Rail Network The rail network plan comes as part of a larger drive to increase infrastructure projects across the GCC which are forecasted to exceed $86 billion in The collective GCC rail sector is expected to spend $200 billion as the six member countries Saudi Arabia, Bahrain, UAE, Kuwait, Oman, Qatar aim to complete the integrated GCCwide network by 2018.

33 Where & Why we need to be? We cannot ignore the growing rail sector within the infrastructure market, estimated at $300 Billion. As a result, we were able to work with the recent Rail Links in Saudi Arabia an area that we supported since our existence in 1965 However, we also understand the threats and opportunities the new build rail system pose to the land transport sector. Therefore, we are geared to provide our clients with valued added services within the intermodal logistics model

34 The Big Picture The Macro challenges Political risk Economic reforms Slow cultural transformation Narrow diversification State Control Fiscal freedom The Micro challenges

35 Conclusion We also understand the challenges that come with lower oil prices and the strategic direction of GCC governments to diversify to new areas of competitive advantage. How to stay ahead of the curve? Leverage on current assets to serve a wide and varying sectors and the freight forwarding community at large Watch the trends closely & build competences to tap into emerging sectors Continue to build alliances & joint ventures in key niche services / sectors Remain risk-averts building on the values of our shareholders