To passing guests, the guards on the stairs leading down to the main ballroom of the Emirates Palace Hotel were a clear sign that something important was taking place in Abu Dhabi’s premier conference venue.

Only those with invitations were being granted access to the room, and the expectant buzz from the 300 business people inside confirmed that this event was significant.

It was. On 24 March, representatives from hundreds of the region’s leading project companies travelled to the Emirates Palace Hotel
to hear Abu Dhabi rail developer Union Railway present publicly for the first time its plans to spend $11bn on the development of a federal rail network linking the seven emirates of the UAE.

The project is not only significant for Abu Dhabi and the UAE, but also for the entire Gulf region, as it marks the first step towards turning into reality plans for a GCC-wide rail network linking Kuwait, Qatar, Bahrain, Saudi Arabia and Oman. And possibly even Yemen, under a project being considered by the World Bank.

Procurement strategy

The federal railway also provides hope to contractors, consultants and suppliers in the region at a time when the project market has slowed to a crawl. 

At the event, Union Railway provided details of the proposed route of the new UAE railway, and of its projected procurement strategy, as well as the main technical challenges it anticipates having to overcome.

The railway will link all seven of the UAE’s emirates with rail lines running from Abu Dhabi’s western region through Dubai to Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah and Fujairah. A high-speed section is planned linking Abu Dhabi city to Dubai.

The project will take several years to complete and has been split initially into two major construction phases. Phase one connects the Empty Quarter in the south of Abu Dhabi emirate to the port of Ruwais on Abu Dhabi’s Gulf coast. The second phase linking the northern emirates to Abu Dhabi is likely to include a high-speed line between Abu Dhabi and Dubai, although plans for this are still at a very early stage.

The first phase aims to aid the transportation of granulated sulphur between the Shah and Habshan gas fields in the south of Abu Dhabi to Ruwais. It involves the construction of a 264-kilometre line that will connect the Shah gas field to Ruwais’s oil and gas processing and distribution facilities.

It will be successful only if they make sure the border facilities are accommodated so it is seamless and efficient

Glenn Thorn, head of transportation, Halcrow

Ultimately, the line will carry 7 million tonnes a year of granulated sulphur, making it the world’s largest sulphur transport scheme. The line supports state energy firm Abu Dhabi National Oil Company’s (Adnoc) ongoing production programmes at the Shah and Habshan fields. Later phases will contribute significantly to the development of the oil, natural gas and petrochemicals industries in the UAE.

Phase one is split into two sections: The first running from the Shah field with gas processing and distribution facilities to Habshan; The the second linking Habshan to Ruwais port. The line will also run through Mezaira’a, Madinat Zayed, Tarif and Al-Mirfa.

Union Railway will invite companies to submit expressions of interest for work on the first phase of the project in by the end of June. Companies will then be prequalified to bid on the deals by September. Construction contracts will be divided into two or three civil infrastructure packages, one or two track packages and one control systems package.

Union Railway has set itself an ambitious time line, with the first phase expected to be completed by 2013 and testing to begin in 2014. The tender process will also be tight, with civil engineering work on the Ruwais-Habshan section of the line set to begin by the end of 2010 and scheduled to finish for mid-2012. Civil engineering works on the Habshan-Shah section of the line are expected to begin in the first half of 2011 and are due to be completed by the second half of 2013.

Construction of the track running from Ruwais to Habshan is scheduled to start in the early part of 2011 and should be completed by the first quarter of 2013. Construction on the track between Habshan and Shah will start in the second half of 2011 and is scheduled for completion in mid-2014. Control systems will be integrated into the line over a three-year period between mid-2011 and mid-2014.

US-based engineering firm Bechtel is the favourite to win the project management and consultancy (PMC) contract, according to sources close to the project. The firm is also bidding on two PMC deals to oversee the construction of gas and sulphur production, processing and distribution facilities across the emirate as part of $10bn joint venture Shah gas project being developed by Abu Dhabi National Oil Company and the US’ ConocoPhillips.

Procurement of the rolling stock will start in early 2011 with testing and trial runs to begin the latter part of 2014.

Though the plans may be in place there is still the issue of demand, especially with the passenger aspect of the railway.

Border controls

Those involved in early feasibility studies have considered the idea of operating double-decker trains that will allow passengers to drive their car on board the train in, say, Abu Dhabi, travel through the GCC, and drive off in Kuwait. This would also enable people to avoid the time-consuming process of baggage and passport control and having to arrive at an airport two hours in advance, fundamental when travelling by air.

“[Competition with airlines] will be very difficult, so it needs added-value, which is to have your car on board,” says Glen Thorn, head of transportation at UK consultant Halcrow.

To have actual border restraints operating on the network would be too cumbersome and defeat the object of having an efficient, seamless transportation network through the GCC that will bypass the need for time-consuming passport and baggage checks. One possible solution would be to have on board immigration officials. This system act as the passport control method on the widely used European rail network InterRail.

Other potential hurdles that need to be overcome include effective coordination between the GCC’s six member states.

With a GCC-wide network in place, trade becomes an increasingly important issue. In the UAE, if the railway line stretches down to Salalah in Oman, then Salalah would flourish and become the biggest port in the Middle East region. This would also mean that any security threat in the Straits of Hormuz would no longer pose a threat to operations in the UAE.

Kuwait is pushing for the railway line to run to its Bubiyan port and then extended into Iraq. If this happens, then Bubiyan port will also become a strategic port as it will be the main hub serving Kuwait, Iran and Iraq. Naturally, each states hopes that its section of the regional railway ends up being the most strategic.

A technical decision has to be made on the gauge to be adopted on the network to ensure consistency. Saudi Arabia is driving for all
the GCC states to use the same gauge it currently uses.

Mohammed bin Obeid al-Mazroui, GCC assistant secretary-general for economic affairs, says the secretariat is discussing whether to form one authority to regulate the entire railway or to form committees in each member state to manage each section of the network. The aim is to ensure common standards across the network.

Officials also need to consider the issue of providing security on the line, especially one that involves the transportation of highly corrosive granulated sulphur. Abu Dhabi had been considering whether to transport the sulphur by rail or by an underground pipeline. But with the first phase of the UAE’s rail network involving a freight line between Shah and Ruwais, plans for the pipeline appear to have been scrapped.

When the entire UAE rail network is complete, Union Railway expects a fleet of more than 100 locomotives and 5,000 freight wagons – a significant boost to the country’s industrialisation plans.

“It’s very important,” says Thorn. “It’s about the GCC. They have been talking about it for a long time, but there has been nothing substantial, nothing tangible, nothing physical. This is something that will link them together. But it will be successful only if they make sure the border facilities are accommodated so it is seamless and efficient, [for example] nåo need to stop and change drivers as you enter a different country,” he adds.

High benchmark

While the emphasis of the first phase is firmly on freight, passenger services will follow at a later stage. While freight transportation shows higher returns, about 13 per cent, the idea of a high-speed passenger line that stops at Kuwait, Qatar, Bahrain, Saudi Arabia, the UAE and Oman is highly attractive.

The ambition and scale of the project is impressive. However, in giving itself only three years to finish phase one, Abu Dhabi must fast-track its procurement process if it is to arrive at its destination on time.

If it does deliver phase one on time, it will have set the benchmark not just for the rest of the UAE railway, but for the planners of the regional networks in the other five GCC states.