Home » A rail transport revival for the GCC region

A rail transport revival for the GCC region

by ,
Etihad Rail

Since the early 2000s, significant progress has been made with developing rail networks within and between the GCC countries. Saudi Arabia is the exception, inaugurating its first freight line in 1951, transporting goods between Arabian Gulf ports and the industrial centre of Dhahran. Freight trains have linked Dammam and Riyadh since the 1950s.

Rail transport is emerging in the GCC as a lower carbon alternative to road and air travel for passengers and goods, with the UAE, Oman and Saudi Arabia undertaking ambitious rail projects. While transport officials are tight-lipped on project completion dates, good progress is being made across the region.

On a macro scale, the Gulf Rail Project is a proposed 2,116km system linking all six GCC countries, with development by the Saudi Rail Company, Etihad Rail, Oman Rail and Qatar Rail. It was approved by all member states in 2009 and the completion date was set for 2023, but progress has been limited. Saudi Arabia has laid almost 200km of track within its borders, the UAE has worked on connecting tracks to the Saudi border as part of the Etihad Rail project, and an Oman-UAE joint venture could expand links.

Obstacles include financial uncertainty amid volatile oil prices, as well as a lack of clarity over the project’s scope and operating model, pandemic-related delays, and diplomatic tensions between 2017 and 2021 when Qatar was blockaded by some of its counterparts.

The UAE National Rail Network is being developed by Etihad Rail, with the main line to run from Ghuweifat on the Saudi border, forming part of the Gulf Rail Project, and covering Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah and Fujairah. In January 2016, the first stage commenced daily operations, transporting granulated sulphur for ADNOC between Habshan and Shah to Ruwais in the Abu Dhabi emirate.

Continuing the focus on freight, agreements have been signed with ports and industrial complexes, such as the Khalifa Industrial Zone, Khalifa Port and Jebel Ali Port, and design-and-build contracts awarded for development between Ghuweifat and Fujairah.

Engineer Khuloud Al Mazrouei, deputy project manager for Etihad Rail, says the project’s main objective is to provide “an efficient and sustainable transport network that links the country’s emirates and connects the UAE with the region.”

“This plays a key role in opening up new prospects in the logistics and transport industry, driving social development and providing promising economic opportunities in the UAE and the region across a range of sectors,” she added.

Funding for the passenger transport services was boosted in February 2022 when Etihad Rail and First Abu Dhabi Bank signed a financing agreement worth AED 1.99 billion. The bank will be the certified lead arranger for the loan.

“Through our support for the Etihad Rail project, we are reinforcing the UAE’s position as a global and regional transport and logistics hub, leveraging our strategic geographic location to improve and reinforce our links with the rest of the world,” says Sheikh Mohamed Bin Saif Bin Mohamed Al Nahyan, vice chairman of First Abu Dhabi Bank’s board of directors

Cooperation between the public and private sector will be critical for the long-term success of Etihad Rail. One of the first companies to join forces with the project was logistics giant, Aramex, which signed an agreement with Etihad Rail in 2013 so it can utilise the rail network for deliveries within the UAE and ultimately across borders in the GCC.

Leaders from Oman Rail and Etihad Rail met in October 2022 to form a joint company, with plans to extend the UAE National Network to Oman’s Sohar Port in a project worth US$3 billion.

Engineer Saeed bin Hamoud bin Saeed Al Maawali, Oman’s Minister of Transport, Communications and Information Technology, says, “The strategic initiative to develop a railway network between the Sultanate of Oman and the UAE would cement the strong brotherly ties between the two countries and would also reflect their joint efforts to achieve social and economic integration.”

Within the sultanate, Oman Rail plans to build 2,135km of tracks to connect two industrial ports, three deep water ports, and five international airports, along with linking passengers in towns and cities.

The Saudi Railway Master Plan 2010-2040 builds on the kingdom’s rail history, with multiple projects underway to increase cargo and passenger movement and connect to neighbouring countries. As well as providing the largest share of financing for the Gulf Rail Project, Saudi Arabia has a number of major rail developments at different stages of completion.

To date, the most successful internal Saudi rail project has been the 2,750km North-South Railway. It links the capital, Riyadh to Al Hadithah on the Jordanian border, predominantly as a freight service, as well as a passengers-only line between Riyadh and Qurayyat in the northern Al Jawf province. It commenced operations in 2011.

The Saudi Land Bridge, slated to connect the Red Sea with the Arabian Gulf, will involve 950km of track between Jeddah Islamic Port and Riyadh, and 115km of track between Dammam and Jubail. In September 2022, Engineer Saleh Al-Jasser, said the project was “witnessing increased progress and its implementation will start in the upcoming period”, but no specific dates for project milestones have been released. However, in March 2022, the minister told local media the project would take between five and seven years.

There are also plans to construct three lines in southern Saudi Arabia – the 706km Taif-Khamis-Mushayt-Abha line, the 660km Jeddah-Jizan line, and the 350km Jeddah-Yanbu line.

Looking ahead, Saudi Railway Company and international mobility company Alstom signed a memorandum of understanding in September 2022 to develop hydrogen train solutions for the kingdom in line with Saudi’s Vision 2030 plans for sustainable public transport.

“The focus on sustainable mobility solutions, including the hydrogen technology, will be a key enabler to the diversification and economic growth of the Kingdom,” said Mama Sougoufara, Alstom’s Managing Director for the Middle East, North Africa, and Turkey.

Alstom will also be establishing a regional hub office in Riyadh, with a digital monitoring facility to provide real-time data for Riyadh Metro, Jeddah Airport People Mover and Haramain High-Speed Train services.

Despite challenges and uncertainty around the timetable for some rail projects, a Grand View Research report forecasts a four percent compound annual growth rate for the train market across the Middle East and Africa between now and 2028. According to the researchers, the factors most likely to boost train purchases across the region include increased consumer purchasing power providing a strong market for passenger transport, expansion of rail networks and government initiatives to support this growth.

Photo credit: Etihad Rail

You may also like  | About Us | Careers | Privacy & Policy

 © 2024 ESG Mena