A new railway company, Etihad Trains Company, will be set up by the UAE government.

The US$272 million "Etihad Trains Company", which would be 100 percent owned by the government, would transport goods and passengers and would invest in a countrywide rail network, that would link the emirates. The new company would specialise in leasing, owning and selling trains, according to government sources.

It would strive for linking the rural areas with the urban areas to boost growth and development, besides facilitating easy, cheap and safe means of transport and minimising environmental pollution caused by carbon combustion from vehicles plying on the roads.

The UAE government approved a federal law on July 8, 2009 (Wednesday) to set up the railway company.