Italian consortium wins $900 million UAE rail deal

[October 26, 2011]  DUBAI, United Arab Emirates (AP) -- The United Arab Emirates on Wednesday awarded an Italian-led consortium a $900 million contract to build the first stage of the Gulf nation's railway network.

State-backed railway company Etihad Rail gave the deal to Italy's Saipem S.p.A. and Tecnimont S.p.A., and Dubai-based Dodsal Engineering and Construction PTE Ltd., following a tender process that began late last year.

The deal covers the construction of tracks and other infrastructure, including bridges and communication systems, on a freight route linking the western oil and gas hub of Habshan and the industrial port of Ruwais by 2013.

The consortium is expected to extend the line deep into the country's desert interior, to an area near the Shah natural gas fields, by the following year.

Etihad Rail was set up in 2009 to develop and operate the first major train system in the OPEC member nation. Its name comes from the Arabic word for "union," a monicker it shares with the UAE's national airline, Etihad Airways.

The UAE's ground transportation system is dominated by wide, modern highways linking the country's seven semiautonomous sheikdoms. The commercial hub of Dubai opened the Arabian Peninsula's first metro system in September 2009.

Etihad Rail plans to spend nearly $11 billion in the coming years to provide freight and passenger services throughout the country. Early stages of the project are concentrated in oil-rich Abu Dhabi, the federal capital and the country's largest emirate.

Earlier this week, Etihad Rail signed a deal with the Abu Dhabi National Oil Co. to transport granulated sulfur for export from the company's oil and gas fields along the route covered by Wednesday's contract. Sulfur is a byproduct of natural gas processing.

In July, Etihad Rail picked LaGrange, Illinois-based train engine maker Electro-Motive Diesel to supply the company's first seven locomotives. EMD is a division of Caterpillar Inc.

[Associated Press; By ADAM SCHRECK]

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