x Abu Dhabi, UAEFriday 21 July 2017

Rail network could cost Dh30bn

System could be a key driver in the UAE's economic development, says new chairman.

The planned 1,200km UAE-wide railway system could cost between Dh25 billion (US$6.8bn) and Dh30bn, according to early estimates by the new chairman of Union Railways. Hussain al Nowais, who was appointed on Wednesday by Presidential Decree, said rail links would be a key driver in the country's economic development, cutting transport costs, reducing road transport emissions and creating stronger economic links among the emirates.

"The development we are envisaging in the UAE will be accelerated through this logistical network," Mr al Nowais said on Wednesday. "It will be faster and safer, less polluting and more efficient." Mr al Nowais, a key figure in Abu Dhabi's industrialisation efforts, said Union Railways was close to awarding a consulting contract to provide a road map for the project. An engineering firm will be selected in the first quarter of next year for detailed engineering work, and the first construction contracts could be awarded by the end of next year.

The entire project could be built over five to eight years, he added. Union Railways is considering creating one firm to oversee the project's infrastructure and another to operate the trains. Mr al Nowais said the operator could be created as a joint venture involving "a major global player in the railway business", with Union Railways retaining a 51 per cent stake. The developments could mean that, for the first time, a tourist arriving at Abu Dhabi International Airport will be able to take a train to the beach in Fujairah, for example, while a chemicals maker in Ruwais will be able to send a container of plastics to the Jebel Ali port at lower cost.

The railway would offer a major boost in particular to Fujairah's economy, which relies on exports of limestone and construction gravel by lorry to the other emirates, said Mohammed al Afkham, the head of the Fujairah Municipality. "Fujairah is the only emirate on the east coast, which gives it a very unique position. This train will help us add to that value," he said. "It will enhance the Fujairah port and airport."

The railway will carry passengers at speeds of up to 200kph, but it is primarily focused on moving freight between major industrial centres. Trains carrying freight will move slower at a maximum 120kph. Key connections have already been identified for Abu Dhabi including Khalifa Port, Musaffah industrial zone, the Ruwais oil and petrochemicals complex, and other industrial clusters in Al Ain. The head of Dubai's Roads and Transport Authority (RTA), Mattar al Tayer, was appointed vice chairman of Union Railways while other directors hail from the governments of Sharjah and Fujairah, as well as Dubai's ports and maritime industry.

Mr al Nowais said construction in the capital could be completed in four to five years. Leaders in the other emirates still need to finalise routes, but Mr al Nowais estimated construction would take no more than eight years in total, including the time needed to build tunnels on the east coast. The rail system is planned to eventually connect with the proposed GCC-wide network. "Discussions on the Gulf railway have accelerated in the last few years," Mr al Nowais said. "The UAE is going to co-operate, to link to Saudi Arabia, to link to Oman."

Estimated costs for the regional project have recently jumped from $14bn to between $20bn and $25bn, Mohammed al Mazrouie, the GCC assistant secretary general for economic affairs, told Reuters on Wednesday. "If we are done with the detailed study this year, realistically we will need five to six years to complete the project," he said. The UAE's rail project promises to change the face of commerce and industry across the country by cutting transport costs and reducing the volume of lorries on the country's roads, which contribute to road accidents and polluting emissions. Estimates of the UAE lorry fleet range as high as 400,000.

The railway's greatest effects will be felt by industrial firms such as steel and chemicals makers. "Today, big industrial giants need to work with economies of scale," said Mr al Nowais, who also serves as chairman of Emirates Steel Industries, Abu Dhabi Basic Industries and the National Petroleum Construction Company. igale@thenational.ae cstanton@thenational.ae