Middle East to Spend $80 Billion on Public Transport

This week, the International Association of Public Transport (IAPT) World Congress held its 59th annual conference in Dubai. Two thousand delegates from 80 countries around the world attended the four-day event. In between their meetings, delegates took rides on the city's public transportation, including the longest driverless metro line in the world, completed less than two years ago.

Long known as a city dependent on its cars for convenient and comfortable travel, Dubai has been ramping up its infrastructure to relieve increasing traffic congestion driven by urbanization. Car traffic is forecasted to increase four times by 2020 as the population jumps from 1.2 million people in 2005 to more than 5 million by 2020.

To realize its vision of “Safe and Smooth Transport for All,” Dubai’s Roads and Transport Authority (RTA) has been fervently working on projects that cover several different modes of transport. These include 166 miles of metro lines, 268 new tram lines, 90 bus routes with 2,000 buses and 5 new waterways covering 130 miles with 67 water taxis.

Dubai is only one of several areas focused on these projects. The RTA Executive Director estimates that countries in the Middle East would most likely invest $80 billion in the public transport system over the next 10 years. A special report produced by the Financial Times highlights the progression of these projects. Across Saudi Arabia, Qatar and United Arab Emirates, numerous rail commuter and long-distance links are under construction or projected to be underway soon.

One high-speed rail project, the Mecca-Medina line, highlights a unique travel need in the region. To fulfill the requirements of the hajj, Muslims are expected to make the hajj pilgrimage to Mecca, the sacred city of Islam, at least once in their lifetime. And millions do.

Known as the largest annual gathering of people in the world, during the last month of the Islamic year, 2-to-3 million believers make the pilgrimage every year. Last November marked the first time that a metro light rail transported those making the journey at an estimated 199 miles per hour.

It will be interesting to see these exciting projects develop over the next several years. Between the urban areas of already crowded cities, to the spread-out, low-density regions across the desert, the pace of growth demands the infrastructure to support “safe and smooth” public transportation for local residents and visitors around the world.

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About Frank Holmes 282 Articles

Affiliation: U.S. Global Investors

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure.

The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories.

Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.”

He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies.

Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications.

Visit: U.S. Global Investors

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