The move will create a body to oversee railway projects and help rail transport become an alternative mode of transport for moving both passengers and freight amidst the growing road traffic congestions in UAE.

The National Transport Authority (NTA) in Abu Dhabi has already approved the formation of the company and a ministerial decree on it is likely soon. "We are expecting a decree any minute to create a national railway company," Abdulla Salem Al Katheeri, Director of Land Transport Department at the NTA told Emirates Business on the sidelines of the MEED rail projects 2008 conference in Dubai. "The firm will help drive the concept of railway transport to all emirates."

The new national company will draft laws and policies to create a comprehensive strategy for railway transport in UAE. It will also set conditions for ensuring quality in railway lines across the country.

The idea to create a national company stems from the ongoing drive to create a UAE national railway line that will link all the emirates. The line, both for passenger and freight transport, will also be linked to the planned 1,200km GCC railway network. "The UAE realises the importance of integrated transport to keep in pace with the growth in the economy and population. Railway transport is very essential in freeing up traffic by reducing congestion as well as accidents," said Al Katheeri.

Feasibility studies for the 800km UAE railway line, conducted by a consortium of German railway companies, had been completed but these had to be changed due to new major developments taking place. The announcements for construction tenders are expected once the railway company is established.

"Once the company is created, it will help us to speed up the process of creating a UAE national railway line. Already alignments in the Abu Dhabi have been completed," Al Katheeri said.

Both the UAE and GCC railway lines are expected to bolster the region's position as a fast growing global logistics hub by providing connectivity between the various GCC ports that have seen a 20 per cent annual increase in container handling.

While no official cost for the railway project has been announced, experts had earlier estimated the network will cost about Dh10bn. Abdul Redha Al Hassan, Director of Planning at RTA's Rail Agency, said that Dubai Metro is likely to be integrated with the national railway line. But because of changes resulting from major developments, a consultant would be appointed to study the possibility of aligning the two transport systems.