In today’s globally connected economy, where each country is dependent on world trade, it is paramount to have strong ties with neighboring countries. Cross-border trade is a business model that countries across the globe have relied on for centuries. And even though today’s business environment, boosted by easy connectivity and more controlled geo-political relations has enabled countries to do business with any country in the world, having strong relations with the neighboring powers is always a great choice. This is especially true for regions that are intertwined geographically and rely on natural resources based on other countries. This is just as much true for countries in the GCC region. While most countries in this region have heavily relied on their oil resources, most powers are now looking at economic diversification by diverting their energies into other industries and business sectors to lower their dependence on depleting oil reserves.
Walking the same path, Oman and UAE have been working towards stronger trade relations to boost their respective economies. These two countries are placed in such a way that they can make a huge difference in their economic operations if they strategically support each other. Which is what the two countries have been working on. In a recent summit, Oman and UAE looked at signing investment possibilities of the capability of 300 billion dirhams to increase bilateral economic cooperation in various strategic sectors like renewable energy, communications, food and agriculture, healthcare, and logistics. One of the biggest steps that the two countries signed has been the development of a $3 billion joint railway route that will join Oman’s Sohar Port and UAE, drastically cutting down transport time and boosting trade routes.
A strategic railway route toward more flourishing trade relations
The strategic railway route connecting UAE and Oman’s Sohar Port is being looked at as a powerful step towards expediting economic gains for both countries. The Sohar Port, which is a deep-sea port, has been in development mode for some time now and is being touted as the gateway to developed and profitable global markets in Europe and Asia. This connectivity to other markets is what makes the Sohar Port such an important part of the logistics sector for both Oman and its neighboring alliances. For the last two decades, the governments in the GCC region have been developing their logistics network with a war-scale sincerity. Not only have they developed several ports to enable the shipment of goods across the world but have also worked extensively in creating a support network through rail and road infrastructure to internally connect different business hubs. This has surely been one of the biggest developments in these countries.
Similarly, both UAE and Oman have worked towards strengthening their trade infrastructure with utmost sincerity. And the construction of this railroad is a prime example. This 303-kilometer route, which will also support passenger movement, will have trains traveling at a speed of 200 kms/hour, enabling faster and more efficient movement of the goods. As per reports, 70% of the project is done and when completed, the UAE network will operate 1200 kms of track joining all the seven emirates as well as Oman.
The rail network – a bolstering opportunity for Oman
The rail network connecting Oman’s Sohar Port with the UAE’s rail system is being looked at as a ground-breaking pact. It will unlock several opportunities of transformational significance for the economy in Oman. Not just that, it also has the potential to bolster the growth of Sohar Port as it will position the port as a cynosure for rail-based container movement as well as the general movement of cargo from Oman. And if all goes as planned, Oman will also be able to develop several growth engines in the form of freight depots, intermodal yards, industrial and mining hubs, and more within close proximity of the rail line.
The beginning of the project itself will bring ample opportunities to several industrial players as it will require the building of tunnels, over-bridges, underpasses, camel bridges, railway embankments, crossing for pipelines, connecting roads, and much more. If and when a double track is planned, it will further open up opportunities as it will require the construction of railway stations, yards, maintenance points, operation centers, and much more.
However, the biggest advantage of this railway line is the development of Sohar Port, which can now be connected internally through this network. It will enable faster movement of cargo from the Sea of Oman coast into Abu Dhabi and even beyond. This will mean that the shipment time is reduced to a large extent as most shipments were diverted through the Strait of Hormuz to reach the ports in the Arabian Gulf. The cost of transporting commodities like iron ore pellets, steel products, polymers and petrochemicals, petroleum liquids, and clean chemicals is likely to go down significantly when transported by the rail network into the Arabian heartland. Shipping company in Sohar, Oman and Dubai, UAE
So, looking at all the opportunities for trade and cargo movement, it is safe to say that the development of this rail link joining the Sohar Port and Abu Dhabi is surely the project of the future. It will play a significant role in boosting the logistics sector and activating cross-border trade. Logistics company in Sohar, Oman and Dubai, UAE
