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Qatar announced plans to build a rail network linking cities within the peninsular state and also connecting the nearby countries of Bahrain and Saudi Arabia, at an approximate cost of US $25 billion.

Qatari Diar, the real estate investment company controlled by Qatar Investment Authority, and the German national rail operator Deutsche Bahn AG launched a joint venture, Qatar Railway Development Company for the construction of the rail system, yesterday in Doha.

 

Qatari Diar will own a majority stake of 51 percent in the newly formed company, while DB will hold the remaining 49 percent.

 

The total project includes construction of a 350 km metro system in Doha and 325 km passenger and freight links between Doha and the industrial cities of Ras Laffan and Msaieed. It will also include a 180 km high-speed link through a causeway with Bahrain, and a 100 km rail line connecting Saudi Arabia and Qatar.

Construction of a 40 km causeway that would connect Bahrain to Qatar will start in the first quarter of 2010, with Deutsche Bahn as the exclusive partner in the billion euro project.

 

Project completion is expected in 2026.

 

November 22, 2009

 

 

Analysis and Forecast: decreasing risk

 

The proposed rail project will be one of the major GCC proposed rail projects. Part of it will connect to the proposed GCC-wide rail network. The project itself will bring several overall benefits to the Qatar economy. The economy is now almost entirely reliant on gas and oil exports. Efforts to diversify the Qatari economy have started and are gradually intensifying.

 

The proposed rail link will contribute to realizing the economic diversification efforts as it will increase Qatar’s links to regional markets, allowing increased export routes.