Etihad Rail heads for stage two

Etihad Rail could begin awarding contracts for the biggest and most complex section of the rail system by next year, the top executive said.

Etihad Rail expects to issue a request for proposals soon and award the first contracts by the second quarter of next year, said Richard Bowker, the company's chief executive. Delores Johnson / The NaShow more

Etihad Rail will start the contracting process for the second and largest stage of the Dh40 billion (US$10.89bn) national rail system in the next few weeks, the company's top executive said yesterday.

The second stage is to include about 600km of the 1,200km network and link the system from Abu Dhabi to the Jebel Ali port in Dubai, as well as extending to the Saudi and Omani borders.

Etihad Rail expects to issue a request for proposals soon and award the first contracts by the second quarter of next year, said Richard Bowker, the company's chief executive. Construction could begin by the end of next year, he said during the Meed Abu Dhabi conference.

The company has already signed memorandums of understanding with several potential customers for the next stage of the freight rail system, including Etihad Steel and the cement company Arkan, Mr Bowker said. The company has also signed preliminary agreements to develop partnerships with the telecommunications operators Etisalat and du, he said.

The start of construction on the first stage, which is to link Shah and Ruwais, is "imminent", Mr Bowker said. A 266km stage will connect Habshan and Ruwais in the Western Region by 2013, followed by a link between Shah and Habshan the following year.

Last month, Etihad Rail signed a Dh3.3bn deal with a consortium led by Saipem, Tecnimont and the UAE's Dodsal Engineering and Construction. All the contracts are in place for the first stage, Mr Bowker said.

That stage is primarily designed to handle freight traffic for Abu Dhabi National Oil Company (Adnoc), the rail system's first customer. Adnoc will use the system to transport sulphur, a by-product of its natural-gas operations.

"Etihad is now moving from a single customer railroad to a rail network with multiple customers," Mr Bowker said.

The second stage would be "bigger and far more complex" than the first, he added. It will extend through existing urban areas and the free-zone ports under development, as well as connect to the larger network being developed by other GCC countries.

"We're building around places that are already heavily developed," Mr Bowker said.

Etihad Rail did not use public-private financing partnerships to fund the first stage because of time constraints, Mr Bowker said.

Passenger traffic is not a priority for the system, but it is part of the plan, Mr Bowker said. The tracks are designed to accommodate trains moving at up to 200kph.

The third and final stage of the network will connect to the Northern Emirates.