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Wed 12 Jan 2011 07:37 PM

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Emirates' next ambition: lay down railway in desert

Behind the UAE's $11bn bid to link its cities and bolster economic growth

Emirates' next ambition: lay down railway in desert
On offer to foreign companies is a total of $11bn to be spent on the project, as UAEs Union Railway pushes to complete the rail system by 2017

The
UAE boasts the world's tallest building, a man-made island in the shape of a
palm and is about to take its next ambitious step - linking cities by rail over
the desert.

Already
investing heavily in airlines and airports, as well as roads and public
infrastructure, to attract and support growing commerce, the seven emirates are
leaving nothing to chance as they bet on a freight and passenger network to
help drive growth.

At
stake for European and Chinese companies is a total $11bn to be spent on the
project, as UAE's Union Railway pushes to complete the rail system by 2017.

Even
as the country struggles to regain its footing after the 2009 Dubai debt crisis
and an exodus of investors, it is betting that there will be enough economic
activity to justify the rail system. To that end, it is starting with freight and
adding passenger services.

Dubai
is still building out a metro network launched in 2009 linking the emirate’s
malls and business areas, but passenger volume is still sparse, bringing into
question whether a national railway system will work in a country dominated by
cars fuelled with cheap gas.

China,
which sees the Gulf as a key strategic region, appears to be in a good position
to win contracts.

"If
the decisions are made on price and basic quality of value for money criteria,
I don't see how any foreign company could compete unless you get one of the
European export-import banks to go in and try to match Chinese financing,"
said Bill McCahill, Vice Chairman for Pacific Epoch in Shanghai.

"What
they do, it may not be the most cutting edge technology, the sort of Gucci
leather in first class sort of thing, but it is good enough and is reliable for
the most part."

Union
Railway is hoping that the 1,500km freight and passenger network across the
seven-member emirates will start its first complete service in 2017.

The
first project is due for completion by 2014, linking the Shah sour gas field of
state-run Abu Dhabi National Oil Company (ADNOC) to Ruwais and to the Shah sour
gas field, which in early 2013 will begin carrying granulated sulphur from
Habshan to Ruwais for export.

Eventually
the system will connect the UAE to Saudi Arabia via Ghweifat city in the West
and Oman via Al Ain in the East.

Richard
Bowker, Union Railway chief executive, said interest in bidding for the initial
work, such as moving earth and laying track, has been high.

"There
have been companies from China, Korea, Australia, Europe," Bowker said.

 

 

Union
Railway has already awarded a project management contract to a joint venture of
US firm Parsons, and France's Systra, and a preliminary engineering contract to
Parsons Brinckerhoff for the first two phases.

Europe's
top logistics and engineering firms such as French Alstom, German Siemens and
Canadian group Bombardier are also expected to submit bids.

"Many
projects are under detailed planning or even tender and will become reality in
the very near future," said Vincent Prou, Alstom's business development
director in Dubai.

Freight
trains, for heavy goods such as cement, aluminium, or steel, will reach speeds
of up to 120 kilometres per hour (kph) and passenger trains up to 200 kph.

Rail
development is also being driven, in part, by the need to transport oil and gas
in the UAE, the world's No. 3 oil exporter No. 5 in gas reserves.

Chinese
companies are already building up their experience in laying down networks on
the desert peninsula.

China
Railway Construction Corp built the $1.8bn Mecca Metro between Mecca and the
holy sites of Mina, Arafat and Muzdalifah, Saudi Arabia's first dual-track
light railway, which opened in November to ease congestion during the annual
hajj pilgrimage.

"We
get strong interest from Chinese companies," said Abdulaziz al-Hokail,
president of the Saudi Railways Organization, adding the Chinese were also
active as construction agents in phase one of the Haramain High-Speed Rail and
in the North South railway project.

The
biggest beneficiaries are likely to be Chinese companies such as China South
Locomotive and Rolling Stock Corp.

"They
have essentially current foreign technologies that they will manufacture for
export at prices that are well below what any Siemens, Alstom or a Bombardier
could offer," McCahill said. "They take the technology and then just
replicate it massively."

Also
behind the rail network initiative are hopes that it will further diversify the
UAE economy, which is heavily dependent on hydro-carbon revenues and was badly
hit by the global financial downturn and Dubai's 2009 debt crisis.

The
economic case for the trans-Gulf rail network would strengthen if the GCC
countries can agree on the specifics of the railway plan, and if political
tensions which have hampered the construction of a causeway linking Qatar and
Bahrain can be eased.

"Connecting
the Landbridge to the Arabian Gulf will immensely add value to the GDP because
it will transfer products either coming from the east side from India, China
going to Europe through Saudi Arabia or vice versa coming from Europe going
east," al-Hokail said.

"I
compare the Landbridge to the Suez Canal, connecting the Mediterranean to the
Red Sea. This is connecting the whole island of Saudi Arabia. Locally, it will
definitely change the demography of Saudi Arabia."

 

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MM 8 years ago

According to the writer "Dubai metro... passenger volume is still sparse..."

Clearly, the writer hasn't travelled on a metro. I suppose consider tomorrow riding metro to work and back home. I feel like Sh Zayed Rd needs another lane as it gets really crowded especially during rush hour.

Philip 8 years ago

They should have built this years ago and long before entertaining the metro concept. Removing heavy traffic of the roads would improve the roads safety wise and reduce congestion.
Think of the benefit they would have got out of this during the construction boom moving all the construction material. If they can get it done quickly and properly they may still benefit hauling stuff to Qatar which is going to need so much to prepare for 2022

Arjun 8 years ago

I've been on the metro in a peak hour and mind you it is very crowded. Also with the new laws coming up in the UAE regarding many things i feel that the population is gonna go down.....seriously. They definitely know what is good for them, but trust me guys as an expat you need to think four steps ahead. I am preparing myself to move if anything drastic happens....which is on the horizon.....which should not be tough for any expat. As they always say....leave if you dont like.....I've seen a lot of 'em leave and still seeing day in and day out.....people are happier by paying taxes in another country. I love Dubai for many reasons......many. But the way it has been handled of late can hardly talk about it it.

RUSS 8 years ago

I HAVE VISITED THE UAE EVERY YEAR AT LEAST ONCE SINCE 1997. I HAVE SEEN SOME REMARKABLE CHANGES IN THAT TIME. NONE MORE SO THAN THE METRO. I HAD MY FIRST GO IN NOV 2010. AND TRAVELLING FROM MARINA TO AIRPORT WAS BRILLIANT. INEXPENSIVE AND CLEAN. BUT ALSO EMPTY. (OFF PEAK TRAVEL).
I HAVE ALWAYS THOUGHT THE UAE SHOULD HAVE A RAIL SYSTEM, BUT AS NUMBERS DECREASE DAILY IN THE UAE. THE GOVERNMENT MUST THINK AGAIN.
FORGET THE GOOD OLD DAYS,BUILD IT AND THEY WILL COME ATTITUDE.
TRY GETTING THE COST OF VISITING THE UAE BACK DOWN TO AN AFFORDABLE LEVEL FIRST...THEN THEY WILL COME . AND YOU CAN BUILD YOUR RAILWAY

Marcellus Ramone Kelley 8 years ago

How about linking all countries with railway? And exclude anyone whom does not want to be a part of growth!