(MENAFN- Khaleej Times) Etihad Rail plans to link key cities and industrial hubs by 2018
Etihad Rail is on track to flag off its first freight service this year. As the wagons and locomotives have already arrived and the sleeper factory in Mirfa is fully functional, the federal railway organisation looks set to inaugurate the first train on the Habshan-Ruwais route by the year-end and then link key cities and industrial hubs in the emirate.
But this is just the beginning of a long journey as the government-owned entity has big plans to connect the emirate to a wider international network from the Middle East to Europe and Asia in the long run. Initially, a three-stage $10 billion plan is under way that will lay down a 1,200 kilometres network to connect Abu Dhabi, Al Ain, Dubai, Sharjah, Fujairah, Ras Al Khaimah and Khor Fakkan by 2018.
"Etihad Rail plans to operate some passenger trains between Abu Dhabi and Dubai once stage three is in place by 2018. We have considered the possibility of another separate connection between the two cities," Shadi Malak, executive director of commercial and operations, Etihad Rail, told Khaleej Times during an interview.
Elaborating, he said Etihad Rail has made significant progress since its inception in 2009 and will complete the project as per schedule in next five years.
"Looking at stage one alone, construction is well under way, the sleeper factory in Mirfa is fully functional, and wagons have already arrived. Our locomotives have also arrived in April 2013, and we are on schedule for the first train to run from Habshan to Ruwais by the end of this year," Malak said.
In terms of stage two, which will connect the railway to Mussafah, Khalifa and Jebel Ali ports and extend to the Saudi and Omani borders, he said the tendering progress is currently in process.
"Stage two to link trains between Abu Dhabi and Dubai is in place by 2017," he said, adding that the 1,200 kilometres network is expected to be completed by 2018, when it will connect the rest of the network in the northern emirates.
"We also have a rapidly expanding and diversifying customer base. To date, Etihad Rail has signed 15 Memorandums of Understandings (MoUs) with a number of customers throughout the Emirates - in industries ranging from oil and gas and agriculture, to aggregates and waste - all of whom recognise rail as the preferred mode of transport for their goods."
"Our key focus at the moment though is our core 1,200km network. There are many parties involved in the decision-making process for this aspect, so we will continue to coordinate with them in due course," he added.
GCC network
Malak said the UAE and Saudi Arabia have made 'considerable progress' on developing a rail network while other Gulf countries have also initiated work on mega project to link their all main ports and Indian Ocean to transport goods to the rest of the world.
"In order to boost trade, Gulf countries are expected to spend more than $100 billion on rail and metro investments. Work at the national level is still in its early stages in most of these countries, with considerable progress being made in Saudi Arabia and the UAE."
He said existing or planned national lines will either be part of the wider GCC network or have link to it. Each country is responsible for building its own segment of the GCC network, along with its stations and terminals. The construction phase will begin in 2013 and the network is expected to become operational in 2018.
"The GCC rail network is part of a wider GCC economic merger strategy, which in its turn, reflects a certain will for political integration. It is an opportunity to test the six countries' ability and readiness to cooperate and implement large-scale projects of strategic importance. Besides boosting trade, the rail network will connect all the countries of the GCC to the main ports of the Gulf and the Indian Ocean to transport goods to the rest of the world," he added.
Europe, Asia links
Malak said the GCC railway might plan to integrate and connect beyond the GCC region linking into other countries in the Middle East. Following a detailed feasibility study, this includes specific plans for connecting to the Yemen border. Other planned connections include reaching Jordan via the North-South Railway in Saudi Arabia and Iraq via Kuwait.
"Syria and Turkey are also target destinations representing an important step towards a European connection. In the long term, this will include exploring the possibility of extending a link via Central Asia and China, as well as other dynamic Asian economies. Similarly, linking with Turkey's rail through Jordan will give GCC member states access to the European rail grid."
"The goal is to become an important strand of a reconstituted 'Silk Road' to position GCC member states and the wider Middle East and North Africa region as significant players on the transportation and logistics world map," he added.
Economic benefits
Malak said the development of a national railway is part of the federal government's UAE Vision 2021 to diversify the economy by investing in excellent transport infrastructure that capitalises on the UAE's strategic geographical position, and Etihad Rail is a part of this vision.
"Etihad Rail moves on to plan passenger services in the future and will be coordinating closely with Department of Transport, Roads and Transport Authority (RTA) and other Emirate-level authorities to ensure close integration of urban and main line railway systems," he said.
"The UAE has a long and proud tradition as a trading economy, and the railway will strengthen its standing as a logistics hub, ensuring that it is well-connected to trading partners in the region and beyond," he said.
Malak said the rail network brings numerous benefits to a country and its surrounding regions, including job opportunities, road safety improvements, positive environmental impacts, decreased congestion and greater connectivity for both urban and peripheral communities.
"A railway network brings numerous benefits to a country and its surrounding region - including job opportunities, improvements to road safety, positive environmental impacts, decreases in congestion and improvements in the way goods and people move. The UAE is taking the lead in the region in investing in a system of infrastructure that will have a considerable impact on its people and the country as a whole," he said.
"The additional economic activity in UAE brought about by the railway means increased income for residents, business owners and property owners," he said.
Analyses show that the economic benefits that rail will bring are shared across all seven Emirates. It will benefit exports as well as support increased inward investment. It will support additional employment and increase the incomes of business and property owners, as well as workers.
"This is estimated by an independent economic study to accrue benefits equivalent to a gross domestic production (GDP) increase to the UAE economy of Dh3.5 billion per annum by 2030," he said.
"By 2030, the economic expansion enabled by the greater efficiency the rail network brings will lead to many additional jobs within the UAE economy. This, in turn, will increase household incomes per year thereby raising GDP. "Furthermore, the rail network will attract additional inward investment. Any structural change to the economy that the railway would support would be additional to the benefits highlighted here and such change could lead to even further growth in employment and associated GDP than that highlighted."
He said Etihad Rail has no plans to follow public-private partnership in future or float an initial public offering to fund the project.
Regarding an increase in project cost due to price fluctuations of materials in international markets, he said: "Investing in any project may be subject to the effect of commodities rising or falling. The extent to which such risks are shared between Etihad Rail and its contractors is related to the settlement structure of contracts."
He said Etihad Rail is a significant milestone in the economic development of the country and is in many ways symbolic and reflective of the unity between the Emirates and the greater GCC - the same unity that "our late and visionary leader Shaikh Zayed bin Sultan Al Nahyan built as the foundation of this nation".
In reply to a question, he said Etihad Rail, at the moment, has no plans to ship oil and gas itself.
"The initial purpose of the railway is to carry granulated sulphur, which is a byproduct of sour gas extraction. As Etihad Rail's network and capabilities expand, it will certainly be able to offer tailored logistic solutions to downstream companies in the petrochemical sector," Malak concluded.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.