UAE. Investors looking for the greatest return on the funds they invest in port infrastructure should look no further than the GCC region, according to research by International Built Asset Consultancy, EC Harris.
However, in the other transport sectors the lack of cross-border agreements between each member state could see investors focus their attention elsewhere.
The ‘Investment in Transport Infrastructure’ study ranked 17 locations across the globe on the relative attractiveness of their transport sector to potential investors.
The criteria used to judge each country covered a broad range of factors typically considered by various investor groups including the political and economic stability in each market, the government incentives and policies on offer, and the private finance funding channels already in place to support inward investment.
When ranked according to the size of the planned investment programmes to help improve transport infrastructure, the GCC region was in sixth place. In the final league table, which ranked each location in terms of the overall attractiveness of their transport sector, the region was in seventh position with the on-going political instability emerging as one factor that continued to concern some potential investors.
GCC region best placed to attract inward private investment in port infrastructure:
Whilst the region was in seventh place overall, it was judged to be the best place across the globe in which to invest in port infrastructure, finishing well ahead of other countries including China, India, Brazil and the US.
Tim Risbridger, Head of Transportation at EC Harris in the Middle East, said: “Given the volume of oil that leaves from ports across the Middle East on a daily basis, the waterways throughout the GCC are of huge strategic importance to the global economy. With the demand for oil set to rise over the coming years, the business case for building new ports and improving the efficiency of existing facilities has never been more prescient”.
Need for greater co-operation and links between individual GCC countries:
Whilst huge programmes of work are also planned in both the rail and highways sectors, a lack of cross-border agreements has emerged as a deterrent for some investor groups who remain concerned that they are still investing in individual countries rather than the region as a whole.
“Recently announced plans to build modern metro infrastructures in the UAE, Qatar and Saudi Arabia demonstrate the ambition that exists within the Middle East. However, until a transport network is extended across the entire GCC, the region will not be able to fully capitalise on this investment. A clear example can be seen in Europe where the inter-connected rail network has helped to open up lucrative trade routes for even the smaller member countries”, added Risbridger.
Proposed EU legislation could help boost GCC aviation industry:
The research also revealed that planned changes to the EU Carbon Trading Scheme, which would see airlines taxed on their carbon emissions, could offer GCC countries an opportunity to establish themselves as a strategic stop-off point for airlines flying in to Europe from long-haul destinations.
By choosing to stop off before they enter the EU fly zone, airlines could minimize their carbon emissions and the subsequent charge facing them. This could significantly increase the volume of air traffic passing through the Middle East, which would in turn help to deliver substantial economic benefits to the region.
The research also indicated that across the globe, environmental pressure to reduce carbon emissions was leading to greater investment in rail and port infrastructure projects. A clear example of this was evident in China where almost 70% of their transport budget was earmarked for investment in rail projects, whilst in Western Europe, the Spanish government has stated their belief that by the end of 2013, the number of people using high-speed rail will equal the number who take domestic flights.
About the Research:
EC Harris looked at 17 different nations from across the globe and ranked their attractiveness based on key determining factors including political and economic stability, government incentives and policies, expected FDI growth and the ease of entering and doing business in that market. Each country was assessed across the four main transportation sectors – aviation, rail, highways and ports – and their overall ranking was then calculated based on the sum of these four figures.
About EC Harris:
EC Harris is an international Built Asset Consultancy, advising clients in the planning and execution of strategies that deliver the best results from money spent on their built assets. The firm has 40 offices in 28 countries employing over 3,000 people worldwide. Group revenue in 2009/10 was £270 million.
For further information visit www.echarris.com