UAE’s Etihad Rail suspends phase two of nationwide network

UAE rail operator Etihad Rail has suspended the tendering process for phase two of its planned countrywide network.

The move follows reports earlier this month that the company had cut 30 per cent of its workforce as part of a restructuring initiative.

Etihad Rail informed bidders in writing that the second stage, which will link Abu Dhabi emirate to the Saudi border at Ghweifat and the Omani border at Al Ain, had been halted, according to local daily The National.

In October, the firm said it was in the final stages of evaluating tenders for phase two, which will also connect areas including Mussaffah, Khalifa Port and Jebel Ali Port in Dubai.

However, the continued oil price slump since then, leading to budget deficits and the removal of public subsidies across the Gulf, may have caused a rethink.

Industry experts had previously warned that the planned GCC-wide rail network Etihad would link to at the Omani and Saudi borders was unlikely to meet a 2018 deadline.

“As we enter 2016, we have been working closely with our partners and stakeholders to assess our strategic priorities for the year. As a result, a decision has been taken to suspend the tendering process for stage two while we review the most appropriate timing for this investment,” said company chairman Nasser Alsowaidi.

The firm said its decision to suspend phase two would have no impact on stage one operations linking Shah and Habshan to the port of Ruwais.

Commercials operations began on the route in December following safety approval from the Federal Transport Authority.

The overall UAE rail network is being developed at a cost of $40bn and will span 1,200km when completed.