A $3bn contract has been signed by the state rail operators of Oman and the UAE for the construction of a 300km rail line between the two countries.

Oman Rail and Etihad Rail will form the equally-owned Oman–Etihad Rail Company, which will design, develop and operate the railway connecting Oman’s Sohar Port to the UAE National Rail Network, passing through Abu Dhabi.

The company will also lay the groundwork and plan the project’s financing and scheduling.

Passenger trains will have a 200km/h top speed, which equates to a travel time of 100 minutes between Sohar to Abu Dhabi. Freight trains will run at up to 120km/h.

Abdulrahman Salim Al Hatmi, chief executive of Asyad Group, Oman Rail’s parent company, said: “Adding a new railway capability to our logistics sector will offer trade and logistics companies outstanding investment opportunities and empower manufacturing and industrial activities to quickly expand beyond borders.

“The railway also promises huge strategic economic and social gains as it promotes a more diverse robust national economy, upgrades infrastructure and logistic services, drives forward travel and tourism, and ultimately improves the quality of life for communities on both sides of the borders.”