Brazil$220 billion GCC metro expansion to deliver 'much more benefits'
Ramping up the metro infrastructure in the Gulf Cooperation Council could unlock hundreds of billions in socio-economic benefits, according to a new report by global consultancy firm Strategy&.
In order to meet demands of population growth and the influx of tourists, the six countries of the GCC – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – need to expand their metro infrastructure, which currently has a total track length of 400 kilometers.
Strategy&’s report estimates that around 1,100 km of additional metro rail will need to be operational by 2030. “If the GCC cities manage to do so, they could realize direct and indirect socio-economic benefits worth around $700 billion over a 20-year period,” said Mark Haddad, a partner at Strategy&.
Today, Saudi Arabia’s capital city Riyadh has the longest metro track system in the GCC, consisting of total 176 km across 85 stations. Riyadh has to date spent around $40 billion to build its metro system, but will according to Strategy& need an extra $34 billion in capital investment by 2030 to meet demand.
In its Master Plan, Dubai Metro plans to increase its footprint from the current 90 km of track to a staggering 420 km by 2030. The additional capacity is estimated to cost $32 billion.
Doha’s metro infrastructure currently spans 76 km of tracks, with plans to increase its length by 111 km supported by 72 additional stations. Other metro systems assessed by Strategy&’s researchers include Medina, Makkah, Muscat, Jeddah, Dammam, Manama, Kuwait City, and Abu Dhabi.
Tallying all spending that needs to be made to deliver the additional 1,100 km of metro track, the total bill for the GCC culminates into a massive $220 billion of additional investment by 2030.
However, although the cost is significant, “a properly implemented and funded metro system can generate three to four times in direct and indirect socioeconomic benefits,” said Haddad.
The report suggests that every dollar invested in a public transit system can generate 3 to 4 dollars in direct and indirect economic benefits, meaning that the $220 billion pumped into new metro lines could reap up to $700 billion in direct and indirect socioeconomic benefits between 2031 and 2050, if built by 2030.
The benefits of metro
Using the metro-rail as a form of transportation has many benefits. In general, metro trends to be cheaper than travelling by car, leading to a saving in fuel costs. More use of metro also means that congestion drops, which has a direct benefit in the form of added productivity.
In Dubai for instance, the Dubai Road and Transport Authority estimated that traffic congestion in 2021 costed the economy more than $790 million in wasted person-hours.
Less road traffic also means fewer road accidents, leading to a cut in healthcare and social costs, and less need to spend on road infrastructure. Improved air quality is another major benefit of less congestion and road traffic.
“Properly implemented and managed, metro systems can create long-term socioeconomic returns, promote sustainability, and improve the quality of life for residents,” concluded Haddad.
Strategy& is a global strategy consulting firm (formerly Booz & Company) that helps clients with some of their most pressing challenges and ambitions. The consulting firm has offices all over the world, including in major cities such as New York, London, Dubai and Hong Kong.
