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Shareholder agreement to construct Omani-Emirati railway network enhancing UAE and Oman relations

Shareholder agreement to construct Omani-Emirati railway network enhancing UAE and Oman relations
10 May 2024 14:18


His Highness Sheikh Theyab bin Mohamed bin Zayed Al Nahyan, Deputy Chairman of the Presidential Court for Development and Fallen Heroes' Affairs, and Chairman of Etihad Rail, witnessed the signing of a shareholder agreement between Etihad Rail, Oman Rail and Mubadala Investment Company to commence construction of the Omani-Emirati railway network project.

The agreement signing ceremony took place during the state visit of His Majesty Sultan Haitham bin Tarik, Sultan of Oman, to the UAE, along with agreements to award the civil works and construction tender, and the systems and integration tender of the network, as well as the launch of the new corporate identity of Etihad Rail, Oman Rail and Mubadala Investment Company joint venture. Formerly Oman-Etihad Rail Company, the joint venture will now be known as Hafeet Rail.

His Highness said the agreements were in line with the wise directives of the leadership of the two neighbouring countries, enhancing the longstanding historical relations between them, supporting economic and commercial integration, and strengthening their social and cultural ties, and marked the commencement of construction works of the joint railway project with immediate effect.

His Highness added that the project is another step forward in a long history of joint cooperation and will start a new phase of planning for a better future for the two nations and their people.

His Excellency Abdulsalam bin Mohammed Al Murshidi, President of the Oman Investment Authority, noted that the joint railway network is a significant addition to the logistics sector, and will play a crucial role in stimulating various industrial sectors and economic activities, providing increased commercial and investment opportunities for the private sector, supporting the integration of Omani port activities and linking them to regional and international markets, in addition to its contribution to attracting national and foreign investments. This will drive the competitiveness of the two countries at a global trade level, which will in turn enhance their economic prosperity.

An agreement was also signed to award the civil works and construction tender for the joint network to an Omani-Emirati alliance led by Trojan Construction Group (NPC) and Galfar Engineering and Contracting, aligning with joint efforts to build national capabilities and drive in-country value, which includes the involvement of the private sector in the implementation of the joint project. The alliance will also include Tristar Engineering & Construction (TE&C) and National Infrastructure Construction Company (NICC).

In addition, another tender for the systems and integration of the railway network, was awarded to a joint venture between Siemens and HAC, ensuring the Omani-Emirati railway network’s fleet is equipped with the latest rail technologies and advancements. The trains will be equipped with the European Train Control System (ETCS) Level 2, the most advanced system of its kind in the world, to ensure the highest levels of efficiency and safety in accordance with international standards and best practice. As a result, the network’s advanced infrastructure will include full digital train control and tracking through GPS technology, enhancing the network's reliability.

Etihad Rail, Oman Rail, and Mubadala Investment Company also unveiled the new corporate identity of their joint venture, which will now be known as Hafeet Rail (formerly Oman and Etihad Rail Company). The name pays homage to Jebel Hafeet, stretching between the Sultanate of Oman and the UAE. Jebel Hafeet holds strategic significance and historical importance for both countries, serving as a link between the two neighbours through its rugged terrain, which includes mountains, deserts, and unique limestone formations. Rising 1,249 metres above sea level, its numerous picturesque natural landmarks have long captivated citizens and tourists alike from across the globe.

His Excellency Suhail bin Mohammed Al Mazrouei, UAE Minister of Energy and Infrastructure, emphasised the significance of the accomplishments already achieved by the company since its inception. He highlighted its commendable levels of efficiency and dedication in taking early steps to establish a safe and sustainable joint railway network, in alignment with the strong bilateral relations and ties between the two nations. He also underscored the crucial role of the network in facilitating local and regional trade, whilst also opening new opportunities in the infrastructure, transportation, and logistics sectors. This, in turn, contributes to the diversification of the national economy and fosters sustainable development across both countries.

His Excellency Mohamed Hassan Al Suwaidi, UAE Minister of Investment and Managing Director and Chief Executive Officer of ADQ, underscored the joint venture’s accomplishments in the 18 months since its announcement, chiefly the completion of engineering and preparatory work for the network, which has paved the way for the commencement of construction. His Excellency Mohamed Hassan Al Suwaidi highlighted the network's role in facilitating local and regional trade, unlocking new opportunities in infrastructure, transportation, and logistics sectors, and fostering economic diversification and comprehensive development. He also highlighted the tourism benefits the project will provide, through the facilitation of easier travel between the two countries.

Eng Abdulrahman Al Hatmi, Chief Executive Officer of Asyad Group, highlighted the role of the project in reaffirming the strategic logistical hubs for import and distribution of good to regional and global markets in Oman and the UAE, in light of the current economic boom in the neighbouring countries and in the GCC. Al Hatmi commended the strategic vision and economic foresight of Oman and the UAE, which aims to foster an integrated transportation ecosystem that will reshape the logistics landscape in the region.

The project also reaffirms the strategic and economic visions of both countries, bolstering their positions as logistical hubs for the import and distribution of goods to regional and global markets. It will significantly transform the logistics landscape in Oman and the UAE, increasing economic competitiveness. By offering a dependable and sustainable transportation solution, it will reduce both time and costs, whilst also improving the connectivity of sea and land ports to local and regional markets.

Economically, the joint network, which boasts a total investment value of US$3 billion, will amplify the UAE and Oman as gateways to regional markets. The network will also pave the way for job creation, across railway operations, and creating indirect downstream opportunities throughout various sectors in both countries, fostering the development of national talent pools.

The network will drive efficiencies within the supply chain, facilitating cross-border trade, and connecting commercial ports to railways within the two countries. A single freight train journey can transport more than 15,000 tonnes of cargo - or around 270 standard containers. Hafeet Rail is expected to contribute to the development of various sectors in both countries, such as mining, iron and steel, agriculture and food, retail, e-commerce, and the petrochemical sector. This is in large due to its ability to provide fast, safe, and sustainable transportation services for goods of various sizes and weight via rail.

Furthermore, the passenger rail services will serve to connect population centres, fostering social and familial cohesion while supporting the tourism sector, with travellers between the two countries enjoying an easy and smooth travel experience thanks to innovative solutions. The passenger train can reach speeds of up to 200 kilometres per hour, covering the distance between Sohar and Abu Dhabi in 100 minutes, and Sohar and Al Ain in 47 minutes. The one train can accommodate up to 400 passengers.

The signing of the agreements reinforces the unwavering support of both governments for the project and demonstrates their commitment to its implementation and advancement. This commitment reflects the shared goal of strengthening the longstanding ties, and historical relations between the two nations. Moreover, the agreements align with efforts aimed at bolstering joint collaboration and coordination across economic, commercial, investment, cultural, and developmental domains, supporting their long-term sustainable development. The agreements also support the long-standing directives of the leadership of both countries to establish a joint railway network.

Source: Aletihad - Abu Dhabi
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