Motoring @ AsiaOne

Transport companies' route to opportunity

Urbanisation and rapid growth in car population have contributed to road congestion in the Middle East, an area where Singapore can share its expertise
Chuang Peck Ming

Thu, May 17, 2007
The Business Times

THE image of the Middle East is that it's slow moving. But things there can also move so fast that it takes your breath away, as the Singapore Land Transport Consortium has found out.

'Sometimes they move so fast that it can be a challenge catching up with them,' says Mark Ng, business development director of the consortium (SLTC),formed in May last year by five Singapore companies to take on transportation projects in overseas markets.

Fuelled by plenty of oil money, the Arab economies are speeding ahead of their infrastructure development. As a result, roads, for one, are starting to choke on too many and bigger cars because of growing affluence.

In any case, trying to catch up with the expanding car population and to deal with the traffic threatening to clog roads in the Arab world has opened upa new frontier of opportunities for Singapore companies, says Tham Poh Cheong,director for infrastructure services at International Enterprise Singapore, the government agency pushing Singapore companies to go international.

'The rapidly growing number of traffic and transport projects implemented by Middle East countries continues unabated as they strive to deliver world-class transportation systems,' Mr Tham says.

The looming problem of road congestion in the Arab world is already familiar in Asian cities, where quick urbanisation and fast growth in car population have contributed to road jams and a decline in public transport services. The common solution was found in intensive management of urban road networks and improved public transit.

Consequently, there has been a rapid introduction of Intelligent Technology Systems and better acceptance and deployment of demand management techniques.

'Singapore has done well in many of these areas and we can lend some of our experience to other countries,' Mr Tham says. 'For example, London, Dubai and Taiwan are considering various options of road pricing system pioneered by Singapore.'

He points out that ComfortDelGro, Singapore's largest land transport operator, is proof that the country's land transport system can be exported.

'It (ComfortDelGro) has extensive global footprint with operations in seven countries - Singapore, the United Kingdom, Ireland, China, Australia, Vietnam and Malaysia,' Mr Tham says. 'It runs the gamut of land transport services,including buses, taxis, rail, learner driver training, vehicle inspection and testing services, workshops, car rental and leasing, car dealerships, outdoor advertising as well as insurance brokerage services.'

Overseas markets account for 45.5 per cent of ComfortDelGro's revenues. Globally, the company is the second largest land transport operator. In China alone, ComfortDelGro is the single biggest foreign operator, with a presence in12 cities and 23 investment projects.

SLTC, a showcase of the expertise and competence that contributed to the success of Singapore's land transport system, recently tied up with Q-Link to take on land transport projects in Abu Dhabi. Q-Link is a subsidiary of Al-Qudra Holding, the emirate's leading private investment company.

An urban transport system's importance to a city is still under-appreciated,Mr Tham feels. 'Successful urban transport systems ought to increase commercial and labour efficiency, increase access to amenities and make changes in the scale and form of urban agglomerations possible, all without undue adverse effects on the environment,' he says.

In most developing countries, Mr Tham says the urban sector accounts for at least half of the gross national product. 'Cities there often devote 15 to 25per cent of their annual expenditures to transport systems and sometimes more.'

Public investment typically makes up 2 to 2.5 per cent of gross domestic product - and this is estimated to rise to 3.5 per cent in countries where the transport infrastructure is in need of modernising or replacing, according to Mr Tham.

The oil-rich Middle East is splurging even more on land transport systems,given the penchant of the Arabs to outdo each other with the best and biggest projects.

'There is great potential in this market as the various (Arab) countries in the region prosper and there are extensive developments and intense competition among them to build the various superlatives - the first, the tallest, the fastest, the deepest, the grandest,' says Ho Kum Fatt, business development director of MSI Global.

MSI Global, a Singapore-based land transport consultancy service provider,has undertaken projects in Asia, Europe and the Middle East.

The Arab governments have committed more than US$147 billion in land transport projects. Saudi Arabia, the largest Arab country, has pumped US$5.6billion in the construction of bridges and railway networks.

Dubai's Roads and Transport Authority has initiated projects worth more than US$4 billion, including a metro line estimated at US$3.9 billion. Qatar has committed about US$3.4 billion in road projects over the next seven years. And Bahrain has invested US$1.8 billion in a causeway to link Bahrain and Qatar.

Dubai's light rail transport project will result in the first urban railway in the Middle East. 'Dubai has a rapidly growing population and severe traffic congestion problems,' Mr Tham says.

The country's population has swelled from 183,000 in 1970 to roughly 1.1million today - and the increase is tipped to continue at an annual rate of 6.4per cent to hit some three million by 2017.

'Dubai municipality has identified the need for an urban rail system to supply additional capacity, relieve growing motor traffic and support the city's continuing development,' Mr Tham says.

'Systra (a leading European rail and transport engineering firm) was awarded the preliminary engineering contract, and now a consortium of four companies headed by Japan's Mitsubishi Heavy Industries is leading the project to build the first two lines of a high-tech driver-less rapid transit system in Dubai.'

Singapore's MSI Global also got a role in the project, playing consultant to Mitsubishi on the systems assurance, systems integration and electro-magnetic compatibility aspects of the rail system.

While Singapore companies may not be big enough - a handicap which consortiums like the SLTC are trying to overcome- to fill the gap in such mega projects overseas, there are still lucrative niches that small players like them can carve out. And nimble enough to seize such opportunities.

 
 
 
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