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#Geoeconomics: work begins on $3 billion Oman-UAE rail network

The rail line will connect Vale's industrial parks in Port Sohar and the Free Zone in Oman to a planned large industrial park in the UAE. In addition, Oman and Etihad Rail, developer and operator of the rail network between the UAE and Oman, have reached an agreement with Brazilian mining giant Vale to explore the possibility of transporting iron ore and its derivatives by rail. In the first nine months of 2022, trade between the UAE and Oman reached an estimated 4.19 billion euros ($10.88 billion), fully justifying Oman's position as one of the UAE's largest non-oil global trading partners


The $3 billion Hafeet Rail project, which aims to build a rail network between Oman and the United Arab Emirates, is reportedly about to begin.


The Oman Daily Observer quoted Abdul Al Hatmi, managing director of the Asyad Group, as revealing that the rail line will include two 2.5-kilometer-long tunnels and 36 bridges.


This comes after Oman Railways, a subsidiary of the Asyad Group, and Etihad Rail of the United Arab Emirates signed a cooperation agreement in September 2022 to establish Oman and Etihad Rail (now renamed Hafeet Rail), with the aim of building a rail network connecting the port of Sohar to the UAE rail network.


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The Hafet rail project includes passenger and freight stations in Sohar and Al Ain, as well as another freight station in Buraimi, greatly improving regional accessibility.


The trip from Sohar to Al Ain will take only 47 minutes, greatly reducing travel time." With the capacity to carry more than 25,000 tons of freight in a single trip, the freight train will significantly reduce carbon emissions by up to 10 times compared to other modes of transportation, contributing to environmental protection and sustainability goals," said Abdul Al Hatmi, chief executive officer of Asyad Group, adding that the freight train will operate efficiently at a speed of up to 120 kilometers per hour, while the passenger train will be able to reach a speed of up to 200 kilometers per hour, offering passengers a fast and comfortable travel experience.


Oman and UAE explore mineral transport by rail


Oman and Etihad Rail, developer and operator of the rail network between the United Arab Emirates and Oman, have reached an agreement with Brazilian mining giant Vale to explore the possibility of transporting iron ore and its derivatives by rail.


The rail line would connect Vale's industrial parks in the port and free zone of Sohar, Oman, with planned large industrial parks in the United Arab Emirates, creating an efficient logistics corridor.


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Ahmed Musawah Al Hashemi, managing director of Oman and Etihad Rail, said the partnership is a demonstration of potential users' strong interest in fast, sustainable, reliable and cost-effective service on the UAE-Oman rail network.


Rogério Nogueira, Vale's head of products and operations, said the agreement will give a strong boost to the company's plans to develop industrial complexes in the UAE and Oman, focusing on producing low-carbon products for the steel industry.


Vale, one of the world's largest mining companies, is headquartered in Brazil and operates on five continents. As a leading iron ore producer, the company has been operating in Port Sohar and the free zone for more than 12 years. In particular, the Port Sohar Industrial Park, built in 2011, has become one of the Sultanate's largest industrial investments.


UAE-Oman rail line will bring cross-border economic growth


An estimated $3 billion investment in extending the rail network between the United Arab Emirates and Oman is set to bring significant economic benefits to businesses in the border region between the two countries.


To this end, Oman and Etihad Rail, the developer and operator of the network, have entered into a partnership agreement with Abu Dhabi's Mubadala Investment Company to support the construction of the 303-kilometer rail network across the two Gulf countries.


Stressing the strategic importance of the network, Ahmad Musawah Al Hashemi, managing director of Oman and Etihad Rail, said, "This rail network is an extremely valuable addition to the logistics services sector in both countries. It helps reduce the total cost of the supply chain, which in turn increases the competitiveness of both countries in the global market."


The passenger train will operate at speeds of up to 200 kilometers per hour, significantly reducing the travel time between Sohar and Abu Dhabi to just 100 minutes, significantly improving transportation efficiency compared to the current travel time of nearly three hours.


In the first nine months of 2022, trade between the UAE and Oman reached an estimated 4.19 billion euros ($10.88 billion), fully justifying Oman's position as one of the UAE's largest non-oil global trading partners.


Scott Livermore, chief economist for the Middle East at Oxford Economics, commented, "Closer integration between the two countries will undoubtedly contribute to market expansion and greater connectivity. This will not only help achieve the goal of economic diversification, but will also bring tangible economic benefits to businesses in both countries."


The newly signed agreement provides for the formation of joint working groups and committees and the conduct of an in-depth economic and financial feasibility study.


In this regard, Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Infrastructure, who is also the chairman of Oman and Etihad Rail, said, "The creation of this joint venture will lead to a transformation of the infrastructure, transport and logistics sectors, while increasing business flows and improving social cohesion. "


As for the UAE, the 1,200-kilometer-long Etihad Rail is expected to transport more than 60 million tons of cargo and 36.5 million passengers by 2030. The rail network will start from the Saudi Arabian border in Guwefat and will cross the UAE via Abu Dhabi, Kizad, Port Khalifa, Port Jebel Ali, Dubai, Sharjah, Ras al-Khaimah and finally Fujairah on the UAE's east coast, providing strong logistical support for transportation throughout the UAE.





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