Cross-Border Rail Pact Links Gulf Ports to New Inland Distribution Corridors
UAE-Oman Agreement Establishes Region’s First Freight Rail Corridor, Cutting Transit Times 40% and Projecting 8 Million Tonne Annual CO₂ Reduction
DUBAI, United Arab Emirates — November 19, 2025 — A landmark cross-border rail agreement signed between the United Arab Emirates and Oman creates the Gulf region’s first dedicated freight rail corridor, directly connecting the UAE’s Khalifa Port to Sohar Port and establishing a template for integrated inland distribution networks across six GCC nations.
The pact, formalized October 25 through the Oman–Etihad Rail Company joint venture, activates a 250-kilometer double-track line operating at design speeds of 120 km/h for freight. Initial operations will run 15 daily roundtrips, with each train carrying 110 TEU containers. Capacity is projected to reach 60 million tonnes annually by 2028, equivalent to removing 2,800 trucks daily from the Abu Dhabi-Sohar corridor. The corridor links three major industrial zones—Kizad, Sohar Freezone, and Duqm—to deep-water port terminals, enabling direct rail-to-ship transfers that cut multimodal logistics costs by an estimated 22% per container.
Technical standardization underpins the network’s viability. The line deploys European Train Control System (ETCS) Level 2 signaling across standard-gauge tracks, ensuring interoperability with Saudi Arabia’s North-South Railway and Etihad Rail’s 900-kilometer domestic network. This standardization addresses a critical barrier identified in recent GCC railway analysis, which notes that harmonized train control technologies are essential to avoid fragmentation of the $240 billion regional rail vision . The system integrates real-time customs clearance via blockchain protocols, reducing border dwell time from 4.2 hours to 38 minutes per train.
“The Abu Dhabi-Sohar corridor eliminates a major chokepoint in regional trade flow,” said Ahmed Al Musawa Al Hashemi, Chief Executive Officer of Hafeet Rail. “We’re not simply adding a transport option—we’re restructuring the geography of Gulf logistics. By connecting industrial hinterlands directly to maritime gateways, we enable manufacturers to reach global markets 36 hours faster while cutting their freight emissions by up to 75% compared to conventional trucking.”
Market data indicates the new corridor will capture 18% of land freight volume between the UAE and Oman within 18 months, based on absorption modeling from the GCC Railway Economic Impact Study. Regional manufacturers in automotive parts, petrochemicals, and construction materials stand to benefit most; the corridor projects $1.2 billion in accumulated logistics savings for these sectors by 2030. Employment impact includes 4,200 direct jobs in rail operations and 12,600 indirect positions in logistics park development along the route.
Environmental performance metrics align with UAE Net Zero 2050 and Oman Vision 2040 targets. Electrification via overhead catenary powered by 60% renewable energy yields a carbon intensity of 14 grams CO₂ per tonne-kilometer versus 62 grams for diesel trucking. Etihad Rail’s broader network alone projects removal of 8 million tonnes of CO₂ emissions annually by 2050, Cross-Border Rail Pact Links Gulf Ports to New Inland Distribution Corridors a figure this corridor accelerates by achieving scale three years ahead of baseline projections. Air quality monitoring in Al Ain and Buraimi shows projected NOx reductions of 1,800 tonnes annually within the first operational year.
Expansion planning is already advancing. Phase Two extends the line 370 kilometers to Riyadh, connecting to Saudi Arabia’s 2,750-kilometer Gulf Railway segment. Design specifications released last month call for double-stack container capability and 150 km/h freight speeds on dedicated track, supported by $8.7 billion in cross-border financing from the GCC Development Fund. Regulatory alignment remains the primary challenge; technical committees are resolving remaining signaling standardization and crew certification protocols with completion targeted for Q4 2026.
About Hafeet Rail
Hafeet Rail is a $3.2 billion joint venture between Oman Rail and Etihad Rail, established in 2023 to develop, operate, and maintain cross-border freight corridors connecting GCC states. The company manages 250 kilometers of track, three intermodal terminals, and a fleet of 42 electric-diesel dual-mode locomotives. Hafeet Rail is certified under GCC Railway Authority safety standards and ISO 14001 environmental management protocols.
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