Gulf cargo gap spurs $11bn UAE railway

Dubai and Abu Dhabi, which boast the world’s tallest building, largest mall and biggest international airline, lack one key element of more basic infrastructure: a railway. That’s about to change as UAE awards a construction contract for the first phase of a 1,200km freight line connecting its seven sheikdoms and their ports and factories, speeding transit times for cement, metals, oil, gas and chemicals and paving the way for container trains. With the Gulf’s major settlements connected by sea for millennia, the region largely missed out on the coming of the railroad in the colonial era, while recent investment has focused on more modern technologies. That’s left bulk shipments reliant on slow sea journeys and the local transfer of goods from factories to ports confined to trucks using crowded roads. “This is a strategic project, not just another mode of transport,” said Mohammed Obaid al-Mazrouie, the former assistant secretary general for economic affairs at the Gulf Cooperation Council, who has helped develop a plan to extend the line to almost 2,200km, stretching from the Indian Ocean to the borders of Iraq. “It’s vital for supporting trade and industry, connecting the region and creating jobs.” Etihad Rail, established to build the AED40bn ($11bn) railway in the UAE, will pick a lead contractor from 10 local and international bidders in the next two months, chief executive officer Richard Bowker said in an interview. The first phase will extend for 266km and permit Abu Dhabi National Oil Co, or Adnoc, to transport 22,000 metric tons of granulated sulfur a day from inland sources in Shah and Habshan, southwest of Abu Dhabi, to the harbor at Ruwais for export. Construction is slated to start by the end of this year, with the first trains due to begin running in early 2013. A second track will link Abu Dhabi and its new port and industrial zone of Khalifa with Dubai and the port of Jebel Ali, 80 kilometers to the north, before connecting with Saudi Arabia and Oman. Work will begin in the second-half next year. A third line, to be built at the same time, will run from Dubai to the five northern emirates, including Sharjah and Fujairah. When the double-track network is completed, it will have capacity for 50 million tons of cargo a year, including twin- stack containers, on freight trains running at 120km an hour. It will also be able to handle 16 million passengers a year on 200-kmph commuter expresses. “Industries that need to move bulk materials will benefit most,” said Tim Risbridger, the Abu Dhabi-based head of Middle East transportation at construction consultant EC Harris Group. “In the future, smaller-scale industries will be able to use the system to move container freight and the like.” The project stems from the UAE’s policy of investing earnings from the world’s sixth-largest oil exports away from hydrocarbons and into developments such as Khalifa Industrial Zone Abu Dhabi, or Kizad, two-thirds the size of Singapore.