The UAE plans to build a rail network worth up to AED30bn ($8.1bn) from the end of 2010.

According to Union Railway chairman Hussein Jassim al-Nuwais, the rail network is one of the most vital and strategic projects in the UAE.

The 1,100-kilometre-long railway line - connecting Ghuwaifat on the border of Saudi Arabia in the west with Oman in the east - is the key part of a plan to improve public transport and boost trade by linking cities in the country.

Nuwais said the project, due to be completed by 2015 or 2017, will likely cost between AED25bn and AED30bn.

Union Railway will invite tenders for the engineering design and other technical aspects of the project in early 2010, said Al-Nuwais.

The state will finance the project using “direct funding”, local and international banks and will issue bonds.

Union Railways is part of a bigger Gulf railway project that will connect the six countries in the GCC, at a total cost of about $25bn.