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Gulf to collaborate on $17bn Suez Canal road and rail rival

A worker at Al Faw Grand Port. The Development Road project aims to connect the port with Turkey Reuters
A worker at Al Faw Grand Port. The Development Road project aims to connect the port with Turkey
  • Road and rail alternative to Suez Canal
  • Tying south Iraq to Turkey
  • 2029 potential completion date

The $17 billion “Development Road” project is moving ahead after the UAE, Iraq, Qatar and Turkey signed a quadrilateral cooperation agreement. 

The road and rail collaboration aims to tie the Al-Faw Grand Port in Iraq’s oil-rich south to Turkey, thereby shortening travel time between Asia and Europe in a bid to rival the Suez Canal.

A memorandum of understanding was signed by UAE energy and infrastructure minister Suhail Mohamed Al Mazrouei, Iraq’s transport minister Razzaq Muhibis, Turkey’s transport and infrastructure minister Abdulkadir Uraloğlu and Qatar’s transport minister Jassim bin Saif Al Sulaiti.

“This MoU focuses on collaboration for the strategic development road project,” state-run Iraqi News Agency reported, quoting a government statement.

The project is part of Iraq’s plans to ramp up train services in the country. These only operate a handful of lines, including slow oil freight and a single overnight passenger train from Baghdad to Basra that takes up to 12 hours to cover 500km.

In February the National Investment Commission issued International Investment Opportunity documents for Baghdad metro and phase one of a 90km four-station railway linking Najaf International Airport with Karbala city centre.

Last November transport minister Razzak Al-Saadawi was quoted by local media as saying that 30 train stations would be built as part of the Development Road project, which will stretch 1,200km from the country’s southern tip to the northern border with Turkey.

Iraq’s government envisions high-speed trains moving goods and passengers at up to 300 kilometres (186 miles) per hour, links to local industry and an energy component that could include oil and gas pipelines.

According to the new statement, the road and rail project aims to stimulate economic growth and enhance regional and international cooperation, increasing international trade and establishing a new competitive transport route.

“The development road is not just a road to move goods or passengers,” Farhan Al Fartousi, director general of the General Company for Ports of Iraq, told the news agency last year when the plans were first revealed.

“This road opens the door to the development of vast areas of Iraq.” The project is expected to be completed in 2029 if work starts early in 2024, Fartousi said.

Crowd, Person, AudienceQatar Transport Ministry
Ministers from the UAE, Turkey, Iraq and Qatar sign a joint cooperation agreement for the development project

Iraq has historically been a challenging market for international investors. The latest Corruption Perceptions Index by Transparency International ranked it 154 out of 180 countries.

Berlin-based Transparency International said Iraq’s efforts to tackle corruption were undermined by weak political structures. Iraq held its first local elections in more than a decade in December, although one of the main political parties boycotted the election altogether.

However, according to FDI Markets, part of the Financial Times Group, Iraq was the third-best performing country in the world for foreign direct investment. It drew $24 billion of FDI in the first eight months of 2022. This is six times the annual average recorded between 2010 and 2019. 

Earlier this month, Abu Dhabi Ports Group entered into a preliminary agreement with the General Company for Ports of Iraq to establish a joint venture to develop Al-Faw Grand Port and its economic zone. 

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