Across the Gulf region, a multitude of infrastructure projects are underway, designed to enhance quality of life, to create jobs and to develop sustainable economic growth. One of the most significant aspects of this is the development of rail transportation – and the creation of the Etihad Rail network, is in line with both the Abu Dhabi Economic Vision 2030 and the UAE Vision 2021.
Etihad Rail was established in June 2009 under Federal Law no. 2, with a mandate to manage the development, construction and operation of the UAE’s national freight and passenger railway network.
The railway network will be built in phases to link the principal centres of population and industry of the UAE, as well as to form a vital part of the planned GCC railway network linking the six countries of the GCC: The Kingdom of Bahrain, The State of Kuwait, Oman, Qatar, The Kingdom of Saudi Arabia and UAE.
Built to international standards, Etihad Rail’s state-of-the-art network will act as a catalyst for economic growth and sustained social development. Once complete, the railway will redefine logistics and transport in the region; thus providing a modern, safe, efficient and sustainable network which will connect the UAE and its regions to its neighbouring GCC countries.
Etihad Rail’s efforts will of course deliver significant economic benefits, including freight cost savings, business travel time savings and numerous other economic remunerations. In turn, it is believed that the economic benefits will support businesses, commuters and other travellers across the region, whilst boosting tourism and the wider UAE economy.
It is also believed that the rail network will ultimately provide services for both freight and passengers, with social benefits including lower cost transportation, faster journeys than highway alternatives and reduced levels of highway traffic.
Of course rail transportation of freight is much quicker than by truck and it is hoped that Etihad Rail will therefore attract container and bulk freight.
Aside from the socio-economic benefits of the new rail transport system, the Etihad Rail website throws up some interesting environmental comparisons between trucks and railways:
“Based on forecasted traffic volumes, the Etihad Rail network will reduce greenhouse gases by more than 2.2 million tonnes annually – the equivalent of removing 375,000 vehicles off the roads or planting 52 million trees.
“One fully loaded train produces 70-80% less CO2 emissions than the equivalent trucks required and a single freight train can carry the load of up to 300 trucks, thus reducing road congestion and accidents.”
In October 2011, ADNOC became one of Etihad Rail’s first customers when a formal agreement was signed. They have decided to adopt a rail solution to transport sulphur from Shah and Habshan to Ruwais in the Western Region.
Additionally, a number of other organisations have signed a Memorandum of Understanding; thee include: Al Dahra, Arkan, Centre of Waste Management – Abu Dhabi, DHL, Du, Emirates Steel, Hellman Global Logistics, Etisalat, Global Shipping and Logistics (GSL), Hoyewr, Sharaf Logistics, Sharjah Cement Factory, Aramex and DP World – all of which underlines the obvious demand for a rail system.
A project of this magnitude requires an enormous amount of experienced coordination and Etihad Rail lacks for nothing in this aspect, having teamed up with some of the world’s leading consultants.
Listed among these companies is Atkins, who have been assigned as the Preliminary Engineering (PE) Services Consultant, overseeing the execution of all stages of the network.
The first stage involves a consortium comprising of Italy’s Saipem and Tecnimont and UAE company Dodsal Engineering and Construction, who have been awarded the main Civil & Track Works contract.
The Project Management Consultant (PMC) for this phase is a Parson-Aecom JV, while PCM Strescon Ventures Limited has been awarded the contract for the provision of railways sleepers in a purpose-built factory.
Seven locomotive diesels will be supplied by Electro-Motive Diesel and CSR Corporation will supply 240 covered hopper wagons.
Of equal importance is the financing of the project and UBS Investment Bank is providing advice on developing a strategic financial plan for the construction and operation of the railway network, while McKinsey & Company have been involved in devising a business strategy and operating model.
In total, Stage One of the Etihad Rail project is being financed through a purported USD 1.28 billion loan.
Stage Two is already being discussed, with the tendering already underway, with 3 invitations to tender issued to all pre-qualified companies relating to contracts that will involve the design and build of new lines between Ruwais and Ghweifat, Liwa Junction and Al Ain, in addition to the railway integration and systems contract, which will include service such as signalling, communications and commissioning.
Stage Two was further progressed with the August announcement that Etihad Rail had signed a Memorandum of Understanding with Bertschi, a leading Swiss-based logistics company specialising in liquid and dry bulk products for the chemical industry.
The MoU, signed by Etihad Rail CEO H.E. Dr. Nasser Al Mansoori and Bertschi Global AG Manager Business Unit Global, Michael Baechler, will enable the leading logistics company to use the rail network for efficient and safe crossborder transport of equipment and products such as hazardous and non-hazardous bulk liquid and dry chemicals. This will comprise trips between the UAE and other GCC countries, with a strong focus on Saudi Arabia.
The development of Etihad Rail promises to open up so many exciting opportunities for the whole region. Etihad Rail is working with key stakeholders with shared goals, aspirations and business objectives to deliver the railway professionally, efficiently and on schedule.
Among the notable current stakeholders is the GCC Secretariat General, while Abu Dhabi Ports Company, Dubai Ports and ZonesCorp will be working in collaboration with Etihad Rail.
A further MoU has been signed with DP World for the development of an intermodal rail terminal in Jebel Ali Port enabling the more efficient transfer of containerised freight arriving at the port.
This ambitious project is estimated to have a total investment of AED 40 billion and will extend the total network up to 1,200 kilometres upon completion.
Stage One is well underway and the Habshan to Ruwais link is scheduled for completion later this year, with Shah to Habshan due for completion during 2014. Construction is already taking place and the sleeper factory is fully functional and producing up to 2,400 sleepers each day.
Stage Two will concentrate on the rest of Abu Dhabi Emirate network and connection to Dubai and Stage Three will cover the rest of the network in the Northern Emirates.
Once completed, life will significantly change for the better.