U.A.E. Mulls Rail Law, Border Controls as First Train Line Looms

The United Arab Emirates said it’s drawing up safety and operational rules for its fledgling rail industry as the desert country dominated by road and sea transport spends $25 billion to build a network from scratch.

A draft law is under scrutiny as the first part of an $11 billion freight line connecting the U.A.E.’s seven sheikdoms nears completion. Light rail projects are also under way in Abu Dhabi and Dubai, costing $8 billion and $2 billion respectively.

“Rail is a newborn industry,” Nadheem Bin Taher, acting director general of the U.A.E National Transport Authority, said in Dubai. “To encourage the private sector to do business they must know the law in the country.” Clear rules should help draw bids for train operation, signaling and rolling stock, he said.

The U.A.E. is building railways to reduce its reliance on moving freight by road as part of a bigger plan to connect all Gulf Cooperation Council countries from Kuwait in the north to Oman on the Indian Ocean by 2018. Its budget represents about 10 percent of the $250 billion being devoted to rail investment in the whole of the Middle East and North Africa, public works minister Abdulla Mohamed Al Nuaimi said today.

The 750-mile Etihad Rail freight project is on schedule, with Phase 1 -- linking Shah in the interior with Habshan and Ruwais closer to the coast -- to be completed this year and the line opening soon after, he said. Work on Phase 2, opening 2017, has already begun and a tender process to run it is under way.

Oman’s rail line will also be completed by 2017, allowing trains to run between the two countries, while Saudi Arabia has begun its part of the project, according to Al Nuaimi.

GCC governments are also studying immigration, tax and customs questions and will establish a Gulf-wide rail authority “very soon” to regulate those issues, Bin Taher said.

To contact the reporter on this story: Deena Kamel Yousef in Dubai at dhussein1@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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