Etihad Rail awards Dh4.6bn contract to Chinese joint venture

Deal will link ports of Fujairah and Khor Fakkan to rail network at Dubai-Sharjah border

Delegates look at an Etihad Rail poster. The national rail network will connect Fujairah and Khorfakkan on the UAE’s east coast to the UAE’s border with Saudi Arabia at Ghuweifat. Pawan Singh / The NaShow more

Etihad Rail, the developer and operator of the UAE’s national railway, awarded a Dh4.6 billion civil works and construction contract to a Chinese joint venture company for stage two of the country's rail project.

China Railway Construction Corporation (CRCC) and National Projects and Construction (NPC) will work on a 145-kilometre stretch of railway line connecting the Fujairah and Khorfakkan ports to the network at the Dubai-Sharjah border, Etihad Rail said in a statement on Wednesday.

The contract is the latest milestone as "Etihad Rail follows its path to progressing one of the most important and economically strategic projects in the UAE," Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, chairman of Etihad Rail,  Abu Dhabi Executive Council member and chairman of Abu Dhabi Crown Prince's Court, said.

The deal comes after Etihad Rail said last year that the UAE Ministry of Finance and the Abu Dhabi Department of Finance will fund the second stage of the rail network. Stage Two links the UAE and Saudi Arabia from Fujairah Port to Ghuweifat through Mussafah, Khalifa Port and Jebel Ali Port.

The UAE, already one of the world's largest logistics and transportation hubs, is working on connectivity between its ports, airports and manufacturing hubs to boost freight volumes, enhance its logistics sector and facilitate trade.

The focus on logistics comes as the Gulf nation seeks to diversify its economy away from oil and boost alternative revenue streams. Its 1200-km national railway is part of wider plans to connect with the networks of other Gulf countries.

Linking the ports of Fujairah and Khorfakkan to the railway network will allow the transportation of up to two million twenty-foot equivalent container units (TEUs) per year, which is expected to stimulate international trade, Etihad Rail said.

By connecting the ports to manufacturing and production hubs, the so-called package D of stage two in the network will connect to quarries for building material in the northern Emirates.

Etihad Rail trains will carry up to 30 million tonnes of construction material per year to distribution centres in Abu Dhabi and Dubai, cutting transport costs and reducing truck trips by more than 2,000 journeys a day.

Work on the 145-km link includes building 15 tunnels through the Hajar mountains with a total length of 16 km as well as construction of 35 bridges and 32 underpasses.

Etihad Rail previously awarded contracts for the design and build of the railway to a joint venture between the China State Construction Engineering Corporation and South Korea’s SK Engineering and Construction. It awarded other packages to a joint venture between the China Railway Construction Corporation and the Ghantoot Transport & General Contracting Company.