A National Railway for a Trade Economy
Etihad Rail represents the most significant new transportation infrastructure project in the UAE since the construction of Jebel Ali Port. The national railway network, when fully operational, will span approximately 900 kilometers, connecting the industrial and port centers of Abu Dhabi and Dubai with the northern emirates and extending to the Saudi Arabian and Omani borders. For a nation whose logistics competitiveness has been built almost entirely on maritime and aviation infrastructure, rail introduces a transformative new modality.
The strategic rationale is straightforward. Road haulage currently carries the vast majority of overland freight within the UAE and across GCC borders. This dependence on trucking creates congestion at border crossings, contributes to road maintenance costs, generates emissions, and imposes per-tonne-kilometer costs that rail can substantially undercut. Etihad Rail is designed to shift a meaningful share of this freight volume onto rail, reducing logistics costs and enabling new supply chain configurations.
Network Phases and Route Architecture
Etihad Rail’s development has proceeded in three defined phases:
| Phase | Route | Length | Status (2025) | Primary Function |
|---|---|---|---|---|
| Stage One | Shah/Habshan to Ruwais | 264 km | Operational since 2016 | Granulated sulphur transport |
| Stage Two | Ghuweifat (Saudi border) to Fujairah | 605 km | Under construction / commissioning | National freight backbone |
| Stage Three | Extensions and branch lines | ~100 km | Planning | Industrial zone connections |
Stage One has been operational since 2016, transporting granulated sulphur from ADNOC’s gas processing facilities at Shah and Habshan to the export terminal at Ruwais. This segment carries approximately 22,000 tonnes of sulphur per day, replacing what would otherwise require over 1,000 daily truck movements.
Stage Two constitutes the transformational phase. This 605-kilometer main line will connect the following key nodes:
- Ghuweifat: Saudi border crossing (connecting to planned Saudi rail network)
- ICAD / Musaffah: Abu Dhabi industrial area
- Khalifa Port / KIZAD: Abu Dhabi’s primary port and industrial zone
- Dubai Industrial City: Major manufacturing and logistics hub
- Jebel Ali Port / JAFZA: Dubai’s flagship port complex
- Sharjah / Ajman: Northern emirate population centers
- Ras Al Khaimah: Northern manufacturing and quarrying industries
- Fujairah Port: Indian Ocean maritime access
Freight Capacity and Operational Parameters
Etihad Rail’s freight operations are designed around the following specifications:
| Parameter | Specification |
|---|---|
| Design Speed (Freight) | 120 km/h |
| Design Speed (Passenger) | 200 km/h |
| Maximum Train Length | 1.2 km |
| Maximum Payload per Train | 11,000 tonnes |
| Annual Freight Capacity (Full Network) | 36+ million tonnes |
| Gauge | Standard (1,435 mm) |
| Traction | Diesel-electric (initial), electrification planned |
The standard gauge selection is strategically important, ensuring interoperability with the planned GCC railway network and with rail systems in the broader Middle East and European standard gauge regions.
Economic Impact on Logistics Costs
Rail freight offers structural cost advantages over road haulage for medium and long-distance bulk and containerized cargo:
| Route | Distance | Road Cost (per tonne) | Rail Cost (est. per tonne) | Savings |
|---|---|---|---|---|
| Khalifa Port to Jebel Ali | 130 km | AED 45-55 | AED 25-30 | ~45% |
| Abu Dhabi to Fujairah | 350 km | AED 120-150 | AED 55-70 | ~50% |
| Ghuweifat to Dubai | 450 km | AED 180-220 | AED 80-100 | ~55% |
| KIZAD to Ras Al Khaimah | 280 km | AED 95-115 | AED 45-55 | ~50% |
These cost reductions are most impactful for heavy and bulk commodities including construction materials, metals, petrochemicals, and food products. Containerized cargo also benefits from rail economics, particularly for movements between Khalifa Port and Jebel Ali where road congestion currently inflates trucking transit times.
Beyond direct transport costs, rail reduces several indirect logistics expenses: lower vehicle insurance premiums, reduced fuel price volatility exposure, decreased road maintenance contributions, and diminished cargo damage rates due to the smoother ride characteristics of rail versus road.
GCC Rail Integration
Etihad Rail is designed as a component of the broader GCC Railway Network, a planned 2,177-kilometer system connecting all six Gulf Cooperation Council member states. The UAE network will connect to:
- Saudi Arabia: Via the Ghuweifat border crossing, linking to Saudi Railway Company (SAR) lines serving Jubail, Dammam, and Riyadh.
- Oman: Via a planned connection from the UAE eastern network to Sohar and Muscat.
The GCC rail network, when operational, would create a continuous freight corridor from Kuwait to Oman, with the UAE positioned as the central hub. The implications for regional trade are significant: containerized cargo could move from Jebel Ali to Riyadh in under 12 hours by rail, compared to 18-24 hours by road with border crossing delays.
Environmental Considerations
Rail freight produces substantially lower carbon emissions per tonne-kilometer than road haulage. Etihad Rail estimates that the full network will reduce national road freight CO2 emissions by approximately 21 percent, equivalent to removing 300,000 truck journeys annually from UAE roads. This aligns with the UAE’s Net Zero 2050 Strategic Initiative and provides logistics operators with a lower-carbon transport option that supports corporate sustainability reporting requirements.
Future network electrification, drawing from the UAE’s expanding solar and nuclear power generation capacity, would further reduce the carbon intensity of rail freight operations.
Investment and Governance
Etihad Rail is a federal government entity, with investment funded primarily through the federal budget and Abu Dhabi sovereign wealth channels:
| Financial Metric | Value (est.) |
|---|---|
| Total Project Investment (Stages 1-2) | AED 50 billion (USD 13.6 billion) |
| Stage Two Construction Cost | AED 38 billion |
| Annual Operating Revenue (projected, 2028) | AED 3.5 billion |
| Projected Freight Revenue Share | 70% |
| Projected Passenger Revenue Share | 30% |
The governance structure positions Etihad Rail as both infrastructure provider and train operator, a vertically integrated model similar to early-stage national railways globally. Future phases may introduce third-party train operating companies for specific cargo categories or passenger services.
Outlook
Etihad Rail will fundamentally alter the UAE’s logistics cost structure for overland freight. The network’s phased commissioning through 2026-2028 will progressively unlock rail capacity for industrial, port, and consumer logistics applications. The critical near-term milestones are the completion of Stage Two commissioning, the operational integration of rail terminals at Khalifa Port and Jebel Ali, and the establishment of cross-border protocols with Saudi railway authorities. Success on these fronts would position the UAE as the rail logistics hub of the Gulf, complementing its existing maritime and aviation dominance.