Etihad Rail network set to boost regional trade growth and increase investment

Etihad Rail is ready to spice up development in regional commerce and promote financial integration whereas attracting extra funding into the UAE’s key industries, Emirates NBD has stated.

The D50 billion ($14 billion) unified rail community, which was accomplished earlier this month, will assist to keep up the nation’s attractiveness as a vacation spot for funding and enterprise, in accordance with a research launched on Friday by the analysis arm of Dubai’s largest financial institution by belongings.

“Commerce and freight transport providers have been traditionally vital within the growth of the UAE and Dubai, specifically, with town having lengthy been a key entrepot for regional commerce flows,” Daniel Richards, Mena economist at Emirates NBD Analysis, wrote within the report.

“This has been bolstered over latest a long time with a sequence of main infrastructure tasks which have additional cemented this function and made Dubai a key world logistics centre.”

Over the a long time, the UAE has constructed robust transport and logistics infrastructure, connecting commerce centres and communities throughout the seven emirates and propelling financial and social growth.

The transport sector — one of many key parts of the UAE financial system — was already ranked eighth on the earth on the World Competitiveness Index even earlier than Etihad Rail was accomplished.

The Emirates can be at the moment ranked larger than its GCC neighbours on about each transport metric of the World Financial Discussion board.

The transport and storage sector accounts for about 4.5 per cent of the UAE’s gross home product, down from a peak of 6.8 per cent in 2015, knowledge from Emirates NBD Analysis confirmed.

Essentially the most notable rail undertaking within the UAE had been the Dubai Metro, the primary city practice community within the Arabian peninsula that started operations in 2009.

It has since expanded its community to attach many of the emirate.

With the addition of Etihad Rail, the UAE has addressed the lacking hyperlink of a complete rail freight community that connects all seven emirates and additional diversifies the nation’s transport combine.

Etihad Rail is anticipated to assist the UAE’s industrial growth plans over the approaching a long time, together with Operation 300bn, which was launched in March 2021.

The ten-year technique seeks to extend the commercial sector’s contribution to the nation’s gross home product to Dh300 billion ($81.7 billion) by 2031.

Etihad Rail’s freight providers have been launched on February 23, connecting 4 main ports and 7 logistics centres throughout the UAE.

The community consists of a fleet of 38 locomotives and greater than 1,000 wagons able to transporting all sorts of items.

The community additionally contains quite a lot of charging stations positioned in Ruwais, the Industrial Metropolis of Abu Dhabi, Khalifa Port, Dubai Industrial Metropolis, Jebel Ali Port, Al Ghail and Fujairah Port.

Building of the railway line between Abu Dhabi and Dubai was accomplished on March 1. The 256km line contains 29 bridges, 60 crossings and 137 drainage channels.

Etihad Rail’s transport options imply “important advantages for companies, permitting for extra productive use of time and assets, diminished prices and extra environment friendly asset administration”, it stated on its web site.

It will enhance rail freight volumes within the close to time period, Emirates NBD stated.

Already, the rail community has had a big effect. Part one has contributed to the growth of Adnoc’s operations on the Shah bitter gasfields and the doubling of Abu Dhabi’s world market share within the manufacturing of sulphur.

With March’s announcement, the road now stretches throughout 900km — from the UAE’s southern border with Saudi Arabia to Fujairah — and connects all main ports, together with Khalifa Port and Jebel Ali.

Additionally, the UAE and Oman in September signed an settlement to hyperlink their rail networks, permitting for freight and passengers providers.

“Not solely will this enhance rail freight volumes within the close to time period, however the eventual linkage with the rail networks of the remainder of the GCC ought to assist regional commerce development and financial integration,” Mr Richards stated.

“Because the sector develops at a sooner charge, the nascent rail community will even assist bolster the UAE’s place relative to its regional friends as regional competitors in some areas intensifies.”

The eventual launch of passenger providers on Etihad Rail will even present a income alternative for the federal government and assist the deliberate inhabitants development of the UAE.

Dubai alone plans to extend the variety of its residents from 3.5 million to about 5.8 million by 2040.

“Development of this scale will seemingly imply that communities are developed farther from the present enterprise and social centres of the emirate, that means that staff’ commutes can be longer than [at present],” Mr Richards stated.

“A broadly utilised public transport system additionally affords the federal government a possibility for income, serving to the diversification efforts and the transfer away from a reliance on oil gross sales to drive authorities exercise.”