/ 15 October 20151

On TrackRail Boom in the UAE and GCC

Breakbulk Abu Dhabi27 October 2014

Teresa LehovdHead of Market IntelligenceHöegh Autoliners

Mega Forces Drive Rail Growth Across the World

/ 15 October 20152

Smart Mobility

Population

IndustrializationEnvironment

Connectivity Urbanization

Types of Rail Projects

Long Distance

Regional

City & Suburbs

• High Speed Rail• Heavy Rail

• Inter-City • Light Rail

• Metro, Light Rail• Trams, Streetcars• Monorail• APM, Cable cars

/ 15 October 20153

Integrated Mobility

Solutions

Urban Smart Mobility Projects Dominate acrossthe World

/ 15 October 20154

34 40

88

48

10187

204

154

Heavy Rail High-Speed Rail Light Rail Metros

Rail Projects by Type

sep.08 sep.15

No. of projects

Rail Projects Boom in All Parts of the World

/ 15 October 20155

537

9 4

145

623

317

119

43

5

290

17

125

15

Africa Asia Oceania C.America

Europe S.America

N.America

MiddleEast

Rail Projects by Region

sep.09 sep.15

No. of projects

GCC: Rail Drives Regional Transformation

/ 15 October 20156

Unprecedented Investment Scale

/ 15 October 20157

Oman• $16bn• 2.240km National Rail

Network

Qatar• $46,6bn • Qatar Integrated

Transport Project

Bahrain• $8bn• Bahrain Rapid

Transport Network

GCC rail network• $15,4bn• Cross-border

coordination

UAE• $27bn• 1.200km National

Network (Etihad Rail)• Metro & Light Rail

Kuwait• $17bn • Metropolitan Rapid

Transit • 574 km National

railway network

Saudi Arabia• $119bn – 140bn• 19 lines including GCC

Rail Link connections• 9.900km of new rail

lines $250bn

Saudi Arabia: Massive Expansion of National Rail Network

/ 15 October 20158

ExecutionConstruction delays

Haramain High Speed Medina, Jeddah and Mecca

Feasibility studyRiyadh-Dammam High Speed

Phase 2: Planning; contract awards in 2016?

North-South RailMineral route + passenger rail

PlanningPrequalification of contractors end 2015; contract awards in 2016

Saudi LandbridgeJeddah, Riyadh and other

western cities

PlanningCauseway and rail line – status:Link to Bahrain and other GCC

Saudi Arabia Plans a Metro in Every Major City

City Description Value $bn

Stage Finish

Riyadh Metro; 6 lines176.5km; 85 stations

22,5 Construction; Government moves to cutspending

2019

Mecca Metro and Bus Network; 6 lines 182km; 88 stations

16,5 Under development1st phase of construction contracts to be awarded by end of this year

1st phase: 2020

Jeddah Metro and Light Rail3 lines 152km; 92 stations

10,5 Design stage; tenders for construction expected in 2016

2020-2022

Medina Metro & Urban Rail 3 lines; 95km

1 Feasibility studiesand preliminary design

2020

Dammam Metro and Urban Rail 9 Early planning

/ 15 October 20159

Qatar: Giant Integrated Transport Project to be ready for FIFA World Cup 2022

Integration of 3 major projects connectingto the GCC Rail Link; completion 2020• Doha Metro ($21bn) Under construction

• 4 lines: Gold, Red, Green; 95 stations• Initial testing to start in late 2016• First phase of metro network due for

completion in 2019

• Lusail Light Rail Transit: Under construction

• 4-line tram network

• 528km Long-distance passenger and freightnetwork – Project management consultancytendered

/ 15 October 201510

UAE Builds on its Dubai Metro Success1.200km UAE National Network (EtihadRail) – completion 2018• 3 phases; Phase 1 completed; Phase 2 re-

tendered early this year

Dubai Metro extention – under development• «Route 2020» new metro line that will

connect to the Dubai Expo • Extension of existing Red and Green lines • New line to run through old Dubai and also

provide a link to the Dubai station on the UAE’s federal Etihad Railway

• Connection to the new Al-Maktoum airport

Abu Dhabi metro and light rail network• Design stage, waiting to be tendered

/ 15 October 201511

Early Stages of Kuwait Railway Development• 511km National railway network –

completion 2028• 90 stations• 2 phases• Connection to the GCC rail

network

• 200km Kuwait City Metro (K-Metro) System• 170km; 5 phases up to 2035

• After long delays, tenders for bothprojects are expected early in 2016

/ 15 October 201512

Oman’s First Mega Rail Investment• 2.144km national rail system connecting Muscat, Sohar, Duqm and

Salalah• Value: $15,7bn• Project initiated 2014; estimated completion 2018• Sohar-Buraimi link – bidding under way• Link to UAE is uncertain as Etihad Rail dropped plans for UAE links to Oman

in June• Construction to start by the end of 2015

• Muscat Metro and Urban Rail

• Early planning stages

/ 15 October 201513

Bahrain Rail Projects at Early Development Stage

• King Fahd Rail Causeway with S. Arabia• 90km rail link to the mainland Saudi Arabia as part of the GCC rail network,

funded by GCC

• Feasibility studies

• Light Rail Network• 22km elevated double track

• Feasibility studies

• Bahrain is preparing to tender a consultancy study

/ 15 October 201514

A Railway without BordersGCC Railway Agency to Coordinate the Project

/ 15 October 201515

Current Challenges

/ 15 October 201516

Funding of new and ongoing projects

Delays in contract awards

Scaling back on projects

Cancellations of future projects

Price pressure

New limitations

Resource bottlenecks

Security concerns

GCC Hard Reality

Oil price & revenues

Large-scalecapital

spending

/ 15 October 201517

Draw down onreserves

DebtPPP

Closing the Funding GapDiversified Project Funding

/ 15 October 201518

Bonds & SukukOmanBahrainSaudi Arabia

PPPKuwaitDubaiQatarOman

DebtBonds & SukukBank loansExport credit

GCC Project Funding Prospects

Description S. Arabia UAE Qatar Kuwait Bahrain OmanFinancial reserves

660 77 210 35 5,6 15

2015 budgetbreakevenoil price

103 73 59 47 94 94

Fiscalposition

Deficit Deficit Deficit Deficit Deficit Deficit

Fundingsolidity

Strong Strong Strong Strong Weak Strong?

Impact onprojects

Some cutsin spending

Minor Minor Speed up

spending

Cuts in spending

Cuts in spending

/ 15 October 201519

Global Rolling Stock Industry in Transition

Access to projectfinancingbecomes

a key to sucess.

Growing demandattracts rolling stock productionto large markets

Heatedcompetition

forcesconsolidation

Emergence ofChina changesthe industrycompetitivedynamics

Industry in Transition

Conclusions

• Rail will be an integral part of the future mobility solutions across theworld

• Emerging and developed countries alike invest vast amounts of moneyin rail infrastructure

• $250bn will be invested in GCC’s booming rail project market

• Project funding will increasingly be diversified

• The current rolling stock industry structure is under pressure

• Solid potential for Breakbulk industry in the region

/ 15 October 201521

Questions?

Railway Boom & Gloom Saudi Arabia

Kim Rathsack CEO, Almajdouie Logistics

Kim Rathsack• CEO, Almajdouie Logistics• Appointment date: November 2014• 26 years of experience in the industry working in France,

Russia, Ukraine, China and Dubai, amongst others

Agenda• Freight Market Outlook• Post Rail Forecast• Road Freight• Rail Freight• Air Freight• GCC Rail Network• Where & Why we need to be?• Challenges – the big picture!!• Conclusion

Freight Market Outlook

$13 BillionLogistics market

3.2% GDP

95.5 %Road freight

0.8 %Air freight

3.7 %Rail freight

Post Rail Forecast – 2016

2.2 %Road freight increase

5.3 %Air freight increase

10 %Rail freight increase

Road Freight

.Positive:• road haulage is driven by household

spending, consumer demand and themining sector

• The government intends to investUSD140bn in the country's transportnetworks over the next 10 years

Negative:

• Congestion: King Fahad Causeway• Road Density: ranked 5th lowest in

the region• Underdeveloped roads: outside

major cities

Rail Freight

Positive:• Rail freight volumes to be

boosted by North-South Railway& Landbridge initiative

Negative:• Coordination between GCC Countries• Lack of service providers of intermodal

logistics• Rail freight network is underdeveloped

considering the size of the country

Air Freight

.Positive• Middle Eastern air freight carriers,

including Saudia, have grown their totalcapacity by 17.1% y-o-y to March 2015

• Private consumption - a major driver ofair freight volumes, especially inrelatively wealthy countries where thepopulation can afford to import higherend products transported by air

• The pharmaceuticals sector given theindustry's need for timely pressure- andtemperature-controlled transportation(worth $7.56bn)

Negative

• Remains less connected to internationalair freight services

New Cargo ProspectsThe infrastructure in the region remains in a full steamprogression, both as supporting of the main industriesdriving the economy (O&G & Petrochemical) as well as aKEY to diversifying the region economy – we are seeing theregion develop competitive advantages in the trade andlogistics sector – Dubai being a global air hub and the rest ofthe GCC following suite.

GCC Rail Network

The rail network plan comes as part of alarger drive to increase infrastructureprojects across the GCC which areforecasted to exceed $86 billion in 2014. The collective GCC rail sector isexpected to spend $200 billion as the sixmember countries – Saudi Arabia,Bahrain, UAE, Kuwait, Oman, Qataraim to complete the integrated GCC-wide network by 2018.

Where & Why we need to be?• We cannot ignore the growing rail sector within the

infrastructure market, estimated at $300 Billion. As aresult, we were able to work with the recent Rail Links inSaudi Arabia – an area that we supported since ourexistence in 1965

• However, we also understand the threats and opportunities

the new build rail system pose to the land transport sector.Therefore, we are geared to provide our clients withvalued added services within the intermodal logisticsmodel

The Big Picture

The Macro challenges • Political risk• Economic reforms• Slow cultural transformation• Narrow diversification• State Control• Fiscal freedom The Micro challenges

ConclusionWe also understand the challenges that come with lower oil prices and thestrategic direction of GCC governments to diversify to new areas ofcompetitive advantage. How to stay ahead of the curve? • Leverage on current assets to serve a wide and varying sectors and the

freight forwarding community at large• Watch the trends closely & build competences to tap into emerging sectors• Continue to build alliances & joint ventures in key niche services / sectors• Remain risk-averts building on the values of our shareholders