The UAE’s Etihad Rail has signed a memorandum of understanding with Emirates Steel to use the first phase of the $11bn federal railway to transport steel across the UAE.

This will help ease the transportation of Emirates Steel’s products and raw materials. By using the rail network, Emirates Steel will also be able to meet the regional distribution needs of the growing demand for steel products.

The agreement was signed by Etihad Rail chief executive Richard Bowker and Saeed Ghumran al-Romaithi, acting chief executive at Emirates Steel.

“We are one of the heaviest users of road haulage in the Emirates. Therefore, real environmental benefits will be realised by taking trucks off the road, easing road congestion and enhancing road safety,” says Al-Romaithi.

Commodities such as steel must be transported in bulk. Using rail will significantly lower the costs, especially over long distances. The lack of an existing rail network in the UAE means that raw materials and finished goods are transported by road, causing heavy congestion.

Construction of the first phase of the railway is scheduled to begin this summer. Etihad Rail received 12 bids for the civil engineering contract on 1 June (MEED 2:6:11).

On 31 July, US-based Electro-Motive Diesel won a contract to design, build and deliver seven heavy-haul freight locomotives.