A new high-speed train in the Emirates is expected to reach speeds of 350kph. Victor Besa / The National
A new high-speed train in the Emirates is expected to reach speeds of 350kph. Victor Besa / The National
A new high-speed train in the Emirates is expected to reach speeds of 350kph. Victor Besa / The National
A new high-speed train in the Emirates is expected to reach speeds of 350kph. Victor Besa / The National

High-speed rail will be a game changer for the UAE


The National Editorial
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The E11 motorway, the UAE’s primary artery that links six of its seven emirates along the coast of the Arabian Gulf, was first conceived in 1968 – three years before the country’s founding. Upon consideration, that ought not to be a surprise. With the majority of its population centres straddling a single coastline, the Emirates is set up for efficient transport links in a way few other countries are. Now, with the emergence in the coming years of a passenger rail network that runs largely parallel to the E11 – and extends even further to the Emirate of Fujairah – efficient transport is set to take on an entirely new meaning for the UAE.

The newly announced crown jewel of the country’s Etihad Rail network is expected to be a high-speed line linking the two most populous cities, Dubai and Abu Dhabi, in a jaw-dropping 30 minutes. Whereas Etihad Rail’s ordinary passenger carriages will travel at up to 200kph, the high-speed service is expected to reach 350kph – on par with some of the fastest rail services on the planet. The company is also looking at higher capacity carriages, which could carry up to 600 passengers per journey, compared to the 400 typically accommodated by similar networks elsewhere.

One of the most striking features of the rail network, however, is its penetration into the heart of urban areas. The network will feature stations at Al Maktoum Airport in Dubai and Zayed International Airport in Abu Dhabi, but also in Abu Dhabi’s Yas Island, Saadiyat Island and Reem Island.

The need for passenger trains in the UAE is evident, and the demand is expected to grow. In recent years, traffic congestion has been an issue among residents and authorities, bringing road safety to the front of the public’s mind. The combined population of the two cities is more than 6 million people, and for many the 60-to-90-minute drive between them – whether for work, family visits or leisure – is a regular feature of UAE life.

The need for passenger trains in the UAE is evident, and the demand is expected to grow

At the same time, a recent population boom in both cities – fuelled by the country’s high economic growth rate, incomes and standard of living – has put many more cars on the road. The opening of new cultural amenities, particularly in Abu Dhabi, is also drawing in more tourists, increasing pressure on existing bus and taxi services.

As Sebastien Mangeant, executive director for high speed at Etihad Rail, told The National, the safety of rail is a significant part of the appeal. So is environmental sustainability. As the UAE moves towards its net-zero emissions goals, reducing the reliance on petrol cars will be critical.

That goes well beyond Etihad Rail. The dawn of passenger trains in the Emirates has been accompanied by a broader shift in the country towards embracing public transport. The Dubai Metro, which began operations in 2009, is gearing up for an expansion, with plans to double the number of stations and a third line scheduled to open in 2029. The emirate’s authorities have spoken of turning its urban area into a “20-minute city”, in which residents can meet their key daily needs in under half an hour without having to rely on cars.

Meanwhile, in Abu Dhabi, water taxis, tram-like electric buses and even autonomous vehicles have become increasingly popular ways to travel. Last year, Abu Dhabi Link, the city’s on-demand bus service, marked the completion of one million passenger trips since its launch in 2020.

Mobility is a fundamental part of the UAE’s culture – from its stature as a global hub to its thriving talent ecosystem at home, the country has long been focused on building connections and getting people where they need to go. Soon, they will get there even faster.

Abdul Jabar Qahraman was meeting supporters in his campaign office in the southern Afghan province of Helmand when a bomb hidden under a sofa exploded on Wednesday.

The blast in the provincial capital Lashkar Gah killed the Afghan election candidate and at least another three people, Interior Minister Wais Ahmad Barmak told reporters. Another three were wounded, while three suspects were detained, he said.

The Taliban – which controls much of Helmand and has vowed to disrupt the October 20 parliamentary elections – claimed responsibility for the attack.

Mr Qahraman was at least the 10th candidate killed so far during the campaign season, and the second from Lashkar Gah this month. Another candidate, Saleh Mohammad Asikzai, was among eight people killed in a suicide attack last week. Most of the slain candidates were murdered in targeted assassinations, including Avtar Singh Khalsa, the first Afghan Sikh to run for the lower house of the parliament.

The same week the Taliban warned candidates to withdraw from the elections. On Wednesday the group issued fresh warnings, calling on educational workers to stop schools from being used as polling centres.

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Analysis

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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.”

PROFILE OF SWVL

Started: April 2017

Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh

Based: Cairo, Egypt

Sector: transport

Size: 450 employees

Investment: approximately $80 million

Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani

Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
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Updated: February 03, 2025, 1:14 PM