Etihad Rail: How high-speed trains could reshape the UAE


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A high-speed railway created to connect Abu Dhabi to Dubai in 30 minutes has the potential to transform the UAE, analysts believe.

Etihad Rail unveiled the plan on Thursday and, while no launch date was revealed, experts say the project could revolutionise the UAE's economy, its environment and where its people will live.

Six stations will be built in the first phase passing through Abu Dhabi’s islands, connecting the airports and then up to Dubai Creek.

“It changes the landscape tremendously,” said Monica Menendez, professor of civil and urban engineering at New York University Abu Dhabi. “And brings the cities very close together.”

A world of change for weary commuters

If a 30-minute travel time at speeds of up to 350 kph replaces a fraught drive along the busy Sheikh Zayed Road, more people could have more choice about where to live and work.

Paulo Anciaes, senior researcher in transport at University College London, said he expected “a considerable shift”.

“The new rail lines will be very competitive, in terms of travel time, comfort and convenience, comparing with private car use. So, we can expect a considerable modal shift from car to rail for intercity travel within the UAE, which will reduce congestion and pollution,” said Mr Anciaes.

“The project will increase happiness, as travel will be faster and less stressful, so people can more easily travel to see family and friends in other cities and make more leisure trips.”

Faster travel could allow workers more time to take part in more productive activities.

“Reduced commuting times also makes it easier for workers to find a job that best matches their skills and opens up opportunities to access education and training.”

Marcus Enoch, a professor of transport strategy at Loughborough University in the UK, said he thought that the new service may increase the amount of travel between Abu Dhabi and Dubai. Currently car and bus are the only ways to travel between the two cities.

“You might get a lot of extra trips generated that you didn’t get before, which I suspect is part of the point,” he said.

It will connect areas of high density and typically has fewer stops so the trains can reach their top speed.

“Think of tourism,” said Prof Menendez. “Now you can be there in 30 minutes.

“The trip is less costly in terms of time and that is a valuable asset.”

A Dh145 billion GDP boost

Like most megaprojects, such a network does not come cheap.

Parts of the UK’s HS2 rail were cancelled due to several factors including the soaring costs, although Prof Enoch said that high-speed rail was more difficult to build in densely populated countries such as the UK which have a long-established rail heritage, as new lines inevitably encounter planning obstacles such as long-established villages and towns.

“I never thought HS2 made any sense because there's nowhere to put it,” he said.

Etihad Rail did not disclose a cost but, according to the International Railway Journal, the cost of high-speed lines in Europe designed for operation at 300 kph or faster is estimated to be $25 million-$39 million per kilometre and as high as $52 million per km in California. In other countries it can be cheaper.

But the economic benefits are strong, connecting businesses and boosting trade.

Much more remains to be revealed but authorities spoke of a Dh145 billion GDP boost.

“It … increases the connectivity between businesses and consumers,” said Mr Anciaes.

He pointed to a review published this week in the Journal of Transport and Health showing the economic gains. Studies in China show each 10 per cent decrease in travel time leads to an increase of 0.44 per cent in the GDP of the areas served.

In Italy, high-speed rail led to a 5.6 per cent increase in GDP in the areas served and in Germany the line connecting Frankfurt and Cologne led to an 8.5 per cent growth in GDP.

Alexandra Gomes, a research fellow at the London School of Economics who has researched Abu Dhabi and Kuwait City, said rises in property prices might be expected.

“This increase would likely be more pronounced in areas with greater accessibility to train stations,” said Dr Gomes.

“Nevertheless, these areas also present an opportunity to promote higher mixed-use development, higher densities and higher levels of walkability.”

A symbol of modernity

Many people are familiar with Japan’s bullet trains. But it is China that has built the greatest share of high speed with about 40,000km of track across the country.

Still, it is growing in the Middle East and North Africa region. Saudi Arabia’s Haramain train links Jeddah, Makkah and Madinah. Morocco is expanding its network and Egypt is also building several lines.

“They are green, efficient and carry high numbers of people,” said Kevin Smith, editor-in-chief at International Railway Journal, who said air travel reduces on routes served by high speed rail such as London and Paris. “Three to four hours is the sweet spot for high speed rail,” he said. “Beyond that is less competitive.

Mr Smith said it was an exciting project. “To have a high-speed line is a symbol of modernity.”

The last mile of connectivity

The high-speed line is distinct from the passenger and freight railway services that will cross the entire country.

The high-speed is electric while the other service will be slower as it uses diesel locomotives.

Mr Smith said the new line would have “substantially better” journey times as it had its own dedicated line. “With high-speed rail, you don’t have to mix and limit freight movements.”

It is not yet clear how these two lines might be integrated, if it all, but Etihad Rail said the regular line will be integrated with existing transport such as Dubai Metro.

Particularly important is known as the “last mile” integration – ensuring people don’t have lengthy walks to the station.

“If you have to drive half an hour, you may as well continue by car,” said Prof Menendez.

People should also be able to purchase tickets that work across rail and buses.

“If you need to buy a separate ticket for every mode it is quite painful. It needs a seamless transition,” she said.

Dr Gomes said improved connections between residential and employment hubs, and the train stations, was “crucial”.

“Consider the journey from downtown Abu Dhabi, where many people live and work, to the nearest station located on one of the islands,” said Dr Gomes.

“A reliable, accessible and interconnected public transport network will be essential for the success of this investment, not just in operational terms but also in enhancing the overall liveability of the cities.”

Benefits for everyone

Residents of both cities eagerly anticipate the launch of the service and there are potential benefits for everyone.

Smaller cities and even regions that are not directly located along the new lines can also benefit, said Mr Anciaes, as the whole nation becomes more well-connected.

“In an increasingly competitive global economy, this major investment in high-speed rail will also be a competitive advantage for the UAE, not only because conditions for businesses will improve but also because it will contribute to the image of the country,” he said.

“This can be the catalyst for further investment, leading to sustainable economic growth.”

Prof Menendez said it would bring Abu Dhabi and Dubai closer together “which makes sense in a globalised economy”.

“We must also acknowledge the complexity [of the project] as it is two emirates with different financial structures and ministries. But it is possible.”

Tips on buying property during a pandemic

Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.

While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.

While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar. 

Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.

Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.

Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities. 

Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong. 

Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.

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UAE currency: the story behind the money in your pockets

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: January 26, 2025, 10:13 AM