Abu Dhabi: Rail link to Dubai under tender

Railway developments are moving forward in Abu Dhabi, with the first phase of an expansive national project expected to be completed this year. A national network will decrease the emirate’s dependence on increasingly busy highways, and could be a boon to GDP growth. However, delays in scheduled passenger services will keep commuters on the highways for the next several years.

Abu Dhabi came one step closer to extending its railways across the UAE in March, when Etihad Rail, a government-backed entity charged with developing a $10.89bn rail network across the country, secured $1.28bn of project financing from a group of local and international banks.

Work is already underway to complete the first of the project’s three stages, a freight line running from the port of Ruwais to Habshan and Shah, which will enhance transport of oil and gas resources to ports on the Arabian Gulf coast. Phase one is expected to wrap up in 2014, with phase two, connecting Abu Dhabi to Dubai, currently in the tendering process.

Once finished, the 1200-km project will stretch from Al Ghweifat on the Saudi border to Ruwais, Liwa, Shah, Dubai, Al Ain, Fujairah, Ras Al Khaimah and Khor Fakkan. Eight of the 13 main transport centres along the network will be located in Abu Dhabi.

The project offers lucrative rewards for the UAE, as the country increasingly looks to shift its focus away from internal consumption of hydrocarbons and towards further exportation of oil and gas. According to Etihad Rail officials, the project is expected to add Dh3.5bn ($952.65m) to GDP by 2030.

“The global crisis highlighted a need for economic diversification and the development of non-oil sectors to fully achieve sustainable economic growth. Realising the vital role that the freight sector plays in achieving this goal, the government of Abu Dhabi has focused its efforts on improving the overall performance of the sector,” Abdulla Rashed Khalaf Al Otaiba, the chairman of the Department of Transport, told OBG.

The private sector is also set to benefit from the deal. Etihad Rail has already signed memoranda of understanding with 14 companies, including Sharjah Cement, Centre of Waste Management in Abu Dhabi, DHL and Emirates Steel, to transport their materials across the UAE once phase two is complete. Chinese telecoms giant Huawei has also signed a contract to provide information and communications technology solutions for Etihad Rail’s trains and operations.

Getting passengers on board Abu Dhabi’s trains may pose a challenge, however. Automobiles are still the primary form of passenger transport, as fuel remains relatively inexpensive and long commutes are common. However, as population growth and economic expansion put more pressure on the emirate’s highways, public transportation has become vital to development and economic diversification.

Abu Dhabi’s Surface Transport Master Plan (STMP) was released in 2009, and focuses on building a public transport network and increased investment in road, rail, air and sea links. One important element of the STMP is the development of a metro and light rail system, with the target of building a high-speed regional rail network linking urban Abu Dhabi with Dubai and Sharjah.

“The integrated public transport network will serve as a flexible tool that can be phased according to growth. Conscientious and incremental implementation can improve mobility, mitigate congestion and foster sustainable growth,” Al Otaiba told OBG.

However, plans for a commuter service between Abu Dhabi and Dubai were shelved in 2011 following a feasibility study, with Etihad Rail deciding to focus exclusively on freight services instead. Transport officials have said that greater urban penetration is necessary for the national network, but passenger services will not be available until the project’s third phase wraps up in 2016.

The Dubai Metro is the only passenger railway currently operating in the UAE. Since its inception in 2010, ridership has shown considerable growth, with an estimated 109.5m passengers riding the metro in 2012, compared to 69m in 2011. Abu Dhabi’s SMTP outlines a metro supported by tram and bus feeder services on approximately 131 km of high-speed track, though that project will also not be completed until 2016.

Officials have acknowledged the difficulties in convincing commuters to leave their cars at home, but with infrastructure spending set at Dh330bn ($90bn) over the next five years, and the Dubai Metro demonstrating how successful public transit can be, Abu Dhabi is well-positioned to follow suit with its own comprehensive passenger rail scheme.

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