US$3bn agreement signed to develop Oman-UAE rail network
Oman and Etihad Rail Company, the developer and operator of the UAE-Oman Rail Network, and Mubadala Investment Company, have signed a US$3 billion cooperation agreement to support the development of the 303-kilometre-long railway network connecting Oman and the UAE.
The partnership comes in line with the two parties’ efforts to explore investment opportunities in the railway sector, the companies said in a statement. In addition, the agreement will strengthen cooperation and support the Oman and Etihad Rail Company’s efforts in accelerating the planning and execution process of the network.
The cooperation agreement also includes the formation of working groups and joint committees to benefit from the shared expertise and knowledge, joint efforts in developing economic and financial feasibility studies. Furthermore, it will support joint investments in the development of the UAE-Oman railway network and cooperation to enhance the project’s added value.
“The MOU signed between Mubadala, and Oman and Etihad Rail Company is designed to explore and unlock new opportunities in the infrastructure, transport, and logistics industries. The strategic partnership with Oman and Etihad Rail Company is aimed at driving economic development and collaboration amongst both countries as well as create value for all stakeholders," said Dr Bakheet Al Katheeri, Executive Director of the UAE Industries Unit at Mubadala’s UAE Investments platform, who signed the agreement along with Ahmed Al Musawa Al Hashemi, CEO of the Oman and Etihad Rail Company.
The signing ceremony was also attended by His Excellency Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Infrastructure, Chairman of Oman and Etihad Rail Company, and members of the Board of Directors of Oman and Etihad Rail.
“The establishment of Oman-Etihad Rail network is an extension of the strategic relations and strong historical ties between the UAE and the Sultanate of Oman, and the foundation of the strong partnership between Etihad Rail and Oman Rail,” the minister said.
“The joint venture will transform the infrastructure, transport, and logistics sectors, and enhance commercial movement and social cohesion, by linking economic, industrial, commercial, and residential centres through the railway network,” he added.
Economic Benefits and Business Opportunities
The UAE-Oman Rail Network aims to increase market competitiveness and reduce the overall cost of supply chains, due to its increased efficiency compared to other modes of transport. The network will also provide trade and investment opportunities for the private sector, providing new and diverse job opportunities, training national human resources, enriching tourism activities, improving the competitiveness of the two countries in global trade and establishing their position as logistics hubs that serve as gateways to regional markets.
The network will employ the highest international security, safety, and environmental standards to provide safe and fast passenger and freight services. Passenger trains will run up to 200 km per hour, reducing the time of the journey between Sohar and Abu Dhabi to 100 minutes, the statement continued.
The signing of the agreement follows the establishment of the Oman and Etihad Rail Company, a joint venture established by Oman Rail, the Sultanate’s national developer and operator of railway networks, and Etihad Rail, the developer and operator of the UAE’s National Rail Network.
Under the agreement signed last September between the two companies on the side-lines of the visit of His Highness Sheikh Mohamed bin Zayed Al Nahyan to Oman.
Ahmed Al Musawa Al Hashemi, CEO of Oman and Etihad Rail Company added: “The rail network between Oman and UAE is of strategic importance as it is a valuable addition to the logistics service sector in both countries and contribute to increasing their competitiveness in the market by reducing the total cost of the supply chain.
“This is in line with both countries’ goals of achieving sustainable development by improving the transport and infrastructure sectors. The agreement with Mubadala reaffirms the strategic position of the joint rail network project to achieve its objectives and ambitions,” he concluded.