Stretching across deserts and borders, the Gulf Railway is more than just steel tracks and stations it’s a bold vision to connect Kuwait, Saudi Arabia, Qatar, the UAE, Oman, and Bahrain into a single, seamless economic corridor. At an estimated cost of $250 billion, this 2,177-kilometer mega-project promises to redefine trade, mobility, and regional integration in the Middle East. By delivering faster, more reliable connectivity, it holds the power to unlock unprecedented opportunities for businesses, accelerate cross-border commerce, and strengthen the Gulf’s position on the global economic map. 

After more than a decade of delays, the Gulf Railway project is finally gaining momentum. If delivered as planned, it could unlock billions of dollars in intra-regional trade, create thousands of jobs across sectors, and cement the Gulf’s position as a vital trade and logistics hub between East and West. Beyond infrastructure, the railway promises to recalibrate the region’s economic model by reducing dependence on hydrocarbons. Far more than a transportation upgrade, it is a strategic platform to advance regional integration, drive economic diversification, and foster sustainable growth. 

The breakthrough came earlier this year when Kuwait’s Central Agency for Public Tenders (CAPT) awarded a contract in January 2025 to Turkish engineering firm Proyapi to conduct the study and detailed design for the first phase of the 111-kilometer Kuwait–Saudi Arabia segment. This 12-month design phase will pave the way for construction tenders a promising step forward after years of stagnation. 

Once operational, the railway is projected to carry up to eight million passengers and 95 million tons of cargo annually by 2045 a transformative leap for the Gulf’s mobility, logistics, and economic landscape. 

Below, we examine the potential economic impacts of the Gulf Railway in detail.  

Why the Gulf Railway Matters: Strategic Implications 

Originally approved by GCC leaders in 2009, the Gulf Railway was conceived to link Kuwait City in the north to Muscat in the south, traversing Saudi Arabia, Bahrain, Qatar, and the UAE along the way. The network was envisioned to support passenger trains reaching speeds of up to 220 km/h, freight trains operating between 80–120 km/h, and, on high-demand corridors like Abu Dhabi–Dubai, even high-speed trains capable of 350 km/h, cutting the journey between the two cities to just 30 minutes. 

Despite these ambitious plans, the project has faced repeated delays, with completion targets slipping from the original 2018 to 2021, and now to 2030, due to shifting priorities, funding constraints, and political tensions. 

Intra-GCC trade remains modest, accounting for just 10% of total exports, according to World Bank data a sharp contrast to the European Union, where over 50% of trade occurs within the bloc. This underperformance reflects structural bottlenecks: trucks stalled at border crossings, inefficient and costly road freight, inconsistent regulations, and chronic congestion at ports and highways. 

The Gulf Railway could decisively address these challenges. By streamlining logistics, lowering costs, and opening new markets, it has the potential to unlock billions in trade, accelerate economic diversification, and strengthen the Gulf’s position as a key trade and logistics hub between East and West. 

For businesses, the Gulf Railway promises access to broader regional markets at lower costs, while governments stand to gain higher tax revenues, more competitive exports, and stronger, more resilient supply chains. Crucially, the railway complements the region’s world-class maritime ports by providing seamless hinterland connectivity, ensuring goods move faster and more cost-effectively from ship to end consumer. 

In the UAE, for instance, the Etihad Rail project alone is expected to contribute over AED 145 billion to GDP over the next 50 years, while removing millions of tonnes of CO₂ emissions and thousands of trucks from the roads each year underscoring the project’s combined economic and environmental benefits. 

These projections highlight not only the transformative potential of the Gulf Railway but also the urgency of overcoming remaining hurdles to bring the project to fruition.

The next section examines the key challenges still facing the initiative from financing and governance to technical coordination and explores what it will take to turn this ambitious vision into reality. 

Recent Developments  

The Economic Rationale 

Relieving Pressure on Roads and Ports 

Rapid urbanization, rising vehicle ownership, and increasing freight volumes have transformed Gulf highways into chronic bottlenecks. Saudi Arabia, the UAE, and Qatar already rank among the highest globally in road traffic density. Over-reliance on trucking also entails significant costs: higher emissions, road degradation, and limited capacity for bulk cargoes. The railway offers a high-capacity, lower-cost, and environmentally preferable alternative, particularly vital for export-oriented industries producing metals, petrochemicals, and manufactured goods. 

Supporting Economic Diversification 

All six GCC states have articulated Vision 2030-style national strategies to reduce dependence on oil. The railway supports these ambitions by: 

• Facilitating the development of inland manufacturing and logistics hubs. 

• Attracting foreign investment to free zones and industrial parks connected to the rail network. 

• Enabling just-in-time manufacturing and more integrated regional supply chains. 

By creating efficient inland trade corridors and expanding access to new markets, the railway contributes to a more balanced, knowledge-driven economy. 

Strengthening Regional and Global Linkages 

Beyond its regional role, the Gulf Railway can augment the Gulf’s geoeconomic significance by integrating into broader transcontinental corridors, such as the India–Middle East–Europe Economic Corridor (IMEC). This reduces the region’s dependence on vulnerable maritime chokepoints such as the Strait of Hormuz, enhancing resilience in the face of geopolitical volatility. 

Unlocking the Potential: Preconditions for Success 

For the Gulf Railway to achieve its full economic promise, several strategic and institutional actions are necessary: 

1. Strengthen Supranational Governance: The GCC Railways Authority should move beyond coordination to enforcement, with a mandate to standardize technical specifications, oversee timelines, and ensure interoperability akin to the European Railway Agency. 
2. Establish a Regional Rail Fund: A pooled financing mechanism supported by wealthier GCC states and multilateral lenders could mitigate fiscal disparities among member states and accelerate progress in weaker economies. 
3. Prioritize High-Impact Corridors: Early focus on economically critical segments (e.g., Abu Dhabi–Sohar, Saudi–UAE–Qatar) can generate tangible benefits and build confidence in the project’s viability. 
4. Harmonize Soft Infrastructure: Standardized and digitized customs, licensing, safety, and inspection procedures are essential to reduce administrative friction and facilitate cross-border operations. 
5. Attract Private Capital: Robust PPP frameworks can mobilize private investment for freight services, stations, and ancillary infrastructure, enhancing efficiency and reducing fiscal burdens on governments. 

Strategic Implications 

Enhancing Regional Trade and Resilience 

Improved rail connectivity could help raise intra-GCC trade closer to EU levels by lowering costs, reducing border delays, and enabling reliable movement of goods and people. It also strengthens the GCC customs union and positions the region as a critical node in emerging trade corridors. 

Generating Employment and Industrial Development 

The railway is expected to create thousands of jobs across construction, operations, and maintenance. It also supports the growth of industrial clusters, logistics parks, and real estate along the corridor. 

Addressing Congestion and Enabling Green Growth 

Rail is a more sustainable mode of transport, reducing emissions, improving urban air quality, and aligning with GCC states’ commitments to net-zero targets. Etihad Rail alone projects removal of over 8 million tonnes of CO₂ emissions annually by 2050. 

Deepening Regional Integration 

By fostering harmonized standards, shared infrastructure, and seamless mobility, the railway reinforces economic and political cohesion across the GCC enhancing resilience to external shocks and promoting long-term regional stability. 

Challenges and Risks 

Despite its promise, the Gulf Railway faces significant hurdles: 

• Uneven implementation across states, with Bahrain and Kuwait notably behind. 

• Institutional and regulatory misalignment, exacerbated by past political disputes (e.g., the 2017–2021 Qatar crisis). 

• Fiscal constraints, particularly in lower-income member states, which may delay investments. 

• Risk of underutilization if freight and passenger volumes fall short of projections. 

Addressing these challenges will require robust governance, transparent financing, and careful phasing to minimize risks and maximize impact. 

Why Has Progress Been So Slow? 

Uneven Implementation 

Progress has varied greatly across member states: 

• The UAE’s Etihad Rail is the furthest ahead, having completed connections from the Saudi border to Fujairah through all seven emirates. 

• Oman and UAE formed the Oman–Etihad Rail Company in 2023 to link Sohar and Abu Dhabi. 

• Saudi Arabia has built extensive domestic networks, but key segments for cross-border integration remain incomplete. 

• Qatar has invested heavily in a modern railway that meets GCC standards but remains disconnected from its neighbours. 

• Kuwait and Bahrain lag behind; Bahrain, in particular, lacks a national railway and is still planning a light rail system. 

Conceptual and Political Challenges 

The railway’s supranational character has demanded unprecedented policy harmonisation on customs, technical standards, border controls, and operations which has been slow to materialise.
The 2017–2021 Qatar crisis, when several GCC states cut ties with Doha, further derailed planning and funding. 

Financial Constraints 

Wealthier countries like UAE and Saudi Arabia have advanced sections using national budgets, while Kuwait, Bahrain, and Oman have struggled with fiscal constraints, particularly after the 2014 oil price crash and the COVID-19 pandemic.
Other competing priorities like NEOM, the Qatar World Cup, or airport expansions have often sidelined the railway. 

What Needs to Happen Next? 

1. Empower Supranational Governance

The GCC Railways Authority (GCCRA), created in 2021, should move beyond coordination to enforcement similar to the European Railway Agency (ERA) by mandating adherence to timelines, standards, and protocols. 

2. Establish a Common Financing Mechanism

Instead of every country shouldering its own share, a GCC Railway Fund, supported by wealthier states and multilateral lenders (e.g., Islamic Development Bank, AIIB), could accelerate work in fiscally weaker members like Bahrain and Oman. 

3. Focus on Anchor Segments First

Prioritising high-impact corridors such as UAE–Oman (Sohar–Abu Dhabi), Saudi–UAE–Qatar (via Salwa), and Kuwait–Saudi (Nuwaiseeb–Al-Khafji) could demonstrate early success, attract users, and build momentum. 

4. Harmonise Soft Infrastructure

Legal and regulatory frameworks on customs, inspections, operator licensing, and safety must be standardised and digitised. ASEAN’s Singapore–Kunming Rail Link offers a blueprint for such integration. 

5. Leverage Public-Private Partnerships

Transparent PPP frameworks, focused initially on freight, could attract private capital and improve operational efficiency, as seen in China and North America. 

The Gulf Railway exemplifies how strategic infrastructure can serve as a catalyst for economic transformation, regional cohesion, and environmental sustainability. As emphasized at the 2024 Doha GCC Railway Meeting, this is more than an infrastructure project it is a strategic instrument of resilience and prosperity in a changing global economy. 

Recent developments from Kuwait’s design phase award to the Oman–UAE joint venture signal a renewed collective commitment. Realizing the vision will demand sustained political will, financial cooperation, and adherence to global best practices. 

In a region historically defined by its oil economy, the Gulf Railway aspires to become the steel backbone of a more sustainable, diversified, and integrated economic ecosystem. Its success, however, will depend not merely on engineering feats but on political will, financial cooperation, and institutional strength. 

As regional transport ministers underscored at the 2024 Doha GCC Railway Meeting, this is not just an infrastructure project it is a strategic instrument for unity, resilience, and competitiveness in an increasingly complex global economy. 

After more than a decade of inertia, the recent wave of contracts from Kuwait’s Proyapi-led design phase to the Oman-UAE joint venture signals a renewed resolve to deliver on this promise. The road ahead will demand learning from global best practices, addressing structural bottlenecks, and sustaining the collective vision that first inspired the project. 

If realized, the Gulf Railway could indeed redefine the region transforming it from a collection of markets linked by highways and ports into a cohesive, connected, and forward-looking economic block. 

Disclaimer: The views expressed in this article are those of the author/authors and do not necessarily reflect the views of ET Edge Insights, its management, or its members