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According to the decree, the Etihad Trains Company shall strive to link the rural areas with the urban areas of the country.

UAE sets up Dh1b train company
GN
Published: July 08, 2009, 13:21

Abu Dhabi: The UAE will establish a railway company with a capital of Dh1 billion to build a countrywide network of railways following a decree by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, WAM reported on Wednesday.

The new entity - Etihad Trains Company - will be wholly owned by the UAE federal government. Its mandate includes building a modern network of trains connecting all parts of the UAE to carry passengers and cargo.

The company will own, lease, rent, buy and sell trains of various types and will also be responsible for their maintenance.

Sultan Bin Saeed Al Mansouri, Minister of Economy, praised the decree setting up the Etihad Trains Company.

"Shaikh Khalifa's wise decision comes for the benefit of the economic development and helps enhance the performance of the UAE national economy.

"The Etihad Trains Company serves as a significant trade and economic incentive that contributes to enhancing communication between the seven emirates, as it comes in line with UAE efforts to provide a clean and safe environment free from carbonic emissions that pose a direct threat to the environment," Al Mansouri said.

Etihad Trains Company will be run by a board of directors of at least seven members, including the chairman and deputy, to be appointed by a federal decree.

Shaikh Hamdan Bin Mubarak Al Nahyan, Minister of Public Works and Chairman of the National Transport Authority's board of directors, said that Shaikh Khalifa's decision will enhance the government's efforts to find a clean and safe environment for the UAE's residents.

Economists welcomed the move, although the response from the transportation companies was mixed.

"At present, transportation costs in the Gulf Cooperation Council countries are among the highest in the world as they do not have a train network.

"The electric railway network will give a competitive edge to local commodities in the international market and we could see more exports from the UAE," Mohammad Al Asoomi, a Dubai-based economist, told Gulf News.

Dalton Garis, an Abu Dhabi-based economist, said: "Transportation for goods and services will become cheaper. Fresh fruits and vegetables - about 20 per cent of their costs are accounted for by transportation.

"Rail services are said to be about 50 times more energy efficient in moving people than individual automobiles."

Gunter Rochau of Dubai-based transportation company Trans1 said that judging by the experience of European countries, freight and cargo transportation by rail isn't commercially viable over short distances.

"Door-to-door services cannot be provided by rail wagons as are provided by land transportation companies.

"It may turn out to be a bit cheaper, but there will be hurdles with customs clearances at the origin as well as the destination," Ranjit Singh, Business Development Manager for Weiss-Rohlig UAE, said.

The network, which would involve a double track right of way built from Ruwais in Abu Dhabi to Fujairah, was approved by the Ministerial Council for Services earlier this year.

Tenders for the project will be offered by 2015. The project will be carried out in two phases.

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