Effective metro system investment

Getting on track

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Executive summary

In the Middle East, significant metro system projects are underway in the cities of the Gulf Cooperation Council (GCC). Cities in the GCC have around 400 km combined of metro system track. We estimate that they will need around 1,500 km in total to cope with projected growth. Therefore, cities, or the local authority, must make sizable investments and do so through a clearly defined implementation framework. Using this framework, cities can make considerable gains, with a large-scale metro system generating three to four times the cost of investment in direct and indirect socioeconomic benefits, according to our calculations.

Cities can use an implementation framework to build metro systems in a cost-effective manner that maximizes socioeconomic returns. The framework has four pillars, which are supported by a foundation of four elements. Each city will lean on different pillars to varying degrees based upon its metro system starting point.

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The four pillars of the metro system implementation framework are discrete yet complementary.

Pillars

1. Clear objectives

Cities must define clear objectives at the outset to prevent conflicts among different goals during metro system implementation. Each metro system has numerous goals that vary widely and that can be potentially inconsistent; for example maximizing ridership, meeting financial targets, and pursuing environmental sustainability.

2. Integrated planning

Integrated planning is vital if cities are to provide riders with a convenient and smooth experience. For example, it is important to consider first-mile and last-mile challenges—that is, how riders get to the public transportation system, and how close that system puts them to their final destination. The metro system is at the heart of integrated planning, as it carries the largest number of passengers.

3. High-quality service and customer-centric experience

A metro system should provide its users with a high-quality experience that is convenient, safe, and smooth. People have high expectations for their quality of life and their transport service. If these are not met, they may avoid using the metro system. One way to provide a high-quality experience is to make the interaction between the digital and physical aspects of the service seamless. Mobility-as-a-service apps, for instance, can help riders plan their entire journey and offer electronic ticketing, fare payment, and service updates.

4. Commercial mindset

A metro system should aim to realize its full commercial potential through arrangements that capture long-term revenue generation opportunities beyond ticketing. Such a commercial mindset yields options in the short to medium term such as advertising, sponsorships, and retail spaces at metro stations. In the long term, there are possibilities for the metro system to work with developers to build new commercial and residential areas attached to the metro system.

Foundation

Effective governance

The governance structure allows cities to manage vital decisions across the planning, delivery, and operations of the metro, thereby avoiding the danger of having transport modes operating in silos and investments failing to deliver the anticipated benefits.
Policies and incentives

Cities need an ecosystem of policies and incentives that encourage people to swap private car journeys for public transportation. They can encourage more people to use metro systems by providing attractive and sustainable first-mile and last-mile mile options such as placing bikes and e-scooters near stations. Cities can also provide fare incentives, including discounts for users such as university students and frequent commuters.
Funding

It is vital that funding for any new metro system endure through the development, launch, and early operation phases. Such a guarantee of support prevents gaps in investment, prevents significant delays, and ensures that operational funding is accessible to provide the quality and availability that attracts riders.
Local capabilities

Cities need to develop local capabilities such as design, planning, and maintenance to ensure the metro system is managed well and operates effectively over the long term. That is particularly important for those cities with little experience in metro systems.

Conclusion

Cities in the Middle East have the opportunity to transform their public transport systems. Irrespective of where they are on that journey now, they require an implementation framework to ensure that their large-scale investment meets future demographic and economic demands. Properly implemented and managed, metro systems can create long-term socioeconomic returns, promote sustainability, and improve the quality of life for residents.