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Hafeet Rail Company, a joint venture of the UAE’s Etihad Rail and Mubadala and Oman’s Asyad Group, has awarded a contract to build railway logistics facilities in Al-Buraimi and Sohar in Oman.

The contract was awarded to a joint venture of India's Larsen & Toubro and Beijing-headquartered Powerchina.

According to an official statement, the facilities are designed to handle and transport bulk, containerised and breakbulk cargo, with the Sohar facility also including provisions for locomotive and wagon maintenance.

Another Chinese firm, China Railway Rolling Stock Corporation, was awarded a contract for the design, engineering and supply of freight wagons.

This development comes alongside an announcement that Hafeet Rail has signed an agreement with Abu Dhabi's Emsteel to enable the transportation of raw materials using the rail link that connects the UAE and Oman.

Emsteel will operate the rail transfer facility in Al-Ain, which includes railcar unloading stations, conveyor systems and stockpile management systems. The facility will handle key materials sourced from Oman, including limestone and red shale, which will be used in Emsteel’s cement production process.

The agreement will enable the transportation of up to 4.2 million tonnes of raw materials a year from Oman to the UAE. The partnership has an initial term of 15 years with an option to extend for a further 15 years on similar terms.

Hafeet Rail’s latest agreement comes after the firm signed several project agreements on the sidelines of the GlobalRail event in Abu Dhabi in October 2024.

Hafeet Rail announced that it had appointed French engineering firm Systra to provide the project’s administrative and engineering consultancy services.

Another agreement was signed with US-based Progress Rail for the supply of 27 freight locomotives for the project.

Project financing agreements worth $1.5bn were also announced in October last year.

In April 2024, the client awarded contracts for three civil works packages for the railway project linking Oman and the UAE.

According to GlobalData, the output of the railway construction market is forecast to grow by 6% in 2025 and exceed $49bn. 

READ THE FEBRUARY MEED BUSINESS REVIEW

Trump unleashes tech opportunities; Doha achieves diplomatic prowess and economic resilience; GCC water developers eye uptick in award activity in 2025.

Published on 1 February 2025 and distributed to senior decision-makers in the region and around the world, the February MEED Business Review includes: