The Business Year

Dr. Osama bin Ibrahim Abdouh

SAUDI ARABIA - Transport

Transforming Mobility in Jeddah

CEO, Metro Jeddah Company

Bio

Dr. Osama bin Ibrahim Abdouh is CEO of Metro Jeddah Company.

“Fund availability is vital to develop any public transportation infrastructure project.“

Can you walk us through the evolution of your operations over the past few years?

In line with Vision 2030, the Kingdom of Saudi Arabia (KSA) with the strategic goal to implement the Public Transportation Programs in the Kingdom. This initiative will help cities in moving large numbers of people safely, quickly, reliably, in a cleaner environment and at affordable cost. Metro Jeddah Company (MJC) is responsible for implementing Jeddah Public Transportation Program (JPTP). JPTP is an essential and important transportation and city-development initiative for Jeddah. It focuses on developing mass rapid transit as a core mobility option in a multi-modal transportation system that will help Jeddah continue to grow towards a prosperous and sustainable future. JPTP components includes Metro lines, LRT, Corniche Tramway, Bus Network, Water Ferries, Obhur Creek Bridge and a Multimodal Station. MJC has completed Preliminary Engineering Design and Tender Documents for all these modes of transportation using Design & Build (EPC) approach. However with the shift in strategic direction and to look for alternate finance and private sector participation in economic development, MJC has embarked to implement JPTP with PPP procurement approach. Currently, we are working with our Transaction Advisors to complete four transactions, viz-a-viz Bus Network Project Phase 1, Obhur Creek Bridge, Water Taxis and Development of Corniche Tram. These four transactions will be rolled out to the market in same order. JPTP has the potential to transform the urban landscape of Jeddah and provide vastly improved transportation to a substantial population in Jeddah for decades into the future.

Why are you starting with the bus package, and what are the operational implications following the tender announcement?

We are using incremental delivery of benefits approach and the Bus Public Transportation component as initial stage of the long term public transportation strategy for Jeddah. The Bus Network Project will provide a sound basis and initial step in developing a sustainable urban transport outcome for Jeddah that has sufficient travel demand and overall public market share to merit Jeddah Bus Network project. Also, the Bus Network Project is more than just a physical investment, it is transformative and meeting the needs of Jeddah’s residents. The bus project requires less initial Capital Expenditure (CapEx) and allow faster delivery of initial public transport enhancement for the city. We will be facing similar challenges for modal shift (mode share) like other global public transportation systems during early days of commercial operations and these challenges will overcome by introducing policies to encourage use of public transport.

What are the main challenges faced during the design phase you are currently in, and what is your strategy to overcome them?

MJC has assembled and mobilized multi-disciplinary professional resources from globally premier consultant’s for Pre-Program Management and Technical Peer Design Review/Checking, for Jeddah Public Transportation Master Plan (JPMTP) and Preliminary Engineering Design and for Architectural Competition, Design, Branding and Way Finding and has delivered Preliminary Design of a global integrated public transportation program, innovative and sustainable, meeting the high-level requirements. This JPTP program, through its magnitude, its complexity, expected improvement of Jeddah Transport, is a World premiere. The JPTP program was also complex because of the necessary coordination of many different pre-program management, engineering and architectural teams, and working in parallel on, among others: town planning, rail alignment, geotechnics, hydrology, tunnel, viaduct, foundations, utilities relocation, architecture, electro-mechanical, signaling, telecoms, power supply, automatic train control, fare collection, maintenance workshop, and network operation. To meet the deliverables deadlines, MJC had to ensure a very effective coordination and using partnering approach between MJC and the consultants and the different teams based in different locations Jeddah, London.and Paris, in particular through dedicated on-line collaborative tools. The program was organized by modes of transportation (packages), with a strong coordination team ensuring proper interfaces and consistent approaches between the modes. The team leading every single package first prepared a detailed work breakdown schedule and the associated work planning. The timely availability of the input data coming from Jeddah Municipality was key: geotechnical data, topographical survey data, building condition survey, existing utilities, existing roads, etc… In terms of geotechnical data, boreholes in strategic areas were prioritized in order to provide the design team with the necessary inputs for them to define, in particular, the type of tunnel. The entire program of drilling was then carried out in a sequence coordinated with the design team. All the program interfaces with external projects (roads/development…) were captured in a dedicated matrix, in order to ensure a full traceability and on-time coordination between the field teams and the design teams. Dozens of meetings with external stakeholders were set up in Jeddah to get inputs in a timely manner so as not to delay the preliminary design. We integrated 40 young Saudi graduates who bring the knowledge of the local context to the team, and we ensured that Robust Change Management and Configuration Management were implemented to trace the changes at the earliest to minimize abortive works. The overall schedule required just-in-time planning, lean construction philosophy, and concurrent engineering approach that needed a very strict weekly follow-up of the progress. Considering the amount of documents to handle, large and dedicated document control teams were mobilized, in Jeddah, London, and in Paris, and a single program level Electronic Document Management Systems (EDMS) known as Proliance was implemented.

What are the salient technological aspects of this masterplan?

JPTP is an integrated multimodal public transportation system and during design and implementation leverage is based on technological aspect such as concurrent engineering, EDMS, 3D BIM model and Intelligent Transport Systems (ITS). The multimodal transportation modes are coordinated through an integrated travel network management and integrated operations control center (ICC). Integrated and automated fare collection system, applications for travel planning, and real-time travel updates. JPTP is using technology that feature a uniform brand and symbol for easy recognition by travelers. In addition, during planning and design phases, MJC is keen to discuss updated technological solutions available in the market or expected to evolve in the future.

What are the main aspects that need to be considered when financing a transportation project?

Financing public transportation systems is complicated and challenging globally and finance or fund availability is vital to develop any public transportation infrastructure project. Though several factors need to be considered while financing transportation infrastructure and some of them are project specific business case and business model, source of funding, financial instrument, avoiding capital cost subsidy, amount of revenues (fare box and non-fare box), subsidy size, keeping capital and operational cost minimum, assets and age of assets, avoiding preferential treatment for few financial investors and regulatory policies.

What approach would you suggest to overcome the challenge of overreliance on direct revenue generation to approve the project’s financial model?

Project financial model output is used in cost benefit analysis or economic feasibility of project and in performing financial analysis. Beside merely depending on generation of revenues (direct and indirect) in approving financial model of a project, the assessor or interrogator of financial model shall look into inputs such as capital cost, operating cost, service cost, finance cost, escalation rate and general assumptions made in the model. Additionally element of all the social benefits translated into monetary value and government guarantees, tax exemption or reduction, certainty of revenue stream, termination compensation, incentive for new market penetration and subsidies plays an important role in project financial model. As a guide a project financial model can be approve if it shows that it covers operating cost and debt service expenses over tenure of debt.

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