A rendering of an Abu Dhabi tram. Photo: Abu Dhabi Transport Company
A rendering of an Abu Dhabi tram. Photo: Abu Dhabi Transport Company
A rendering of an Abu Dhabi tram. Photo: Abu Dhabi Transport Company
A rendering of an Abu Dhabi tram. Photo: Abu Dhabi Transport Company

Why Abu Dhabi's tram project is a key stop on the route to connecting the capital


Daniel Bardsley
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The new tram line set to connect locations in Abu Dhabi could spark further growth in the area, according to transport analysts, who are keen to see the network expand.

As revealed this week, the first phase of the Abu Dhabi Light Rail Transit project will link attractions in Yas Island with Zayed International Airport, with further lines likely later on.

Marcus Enoch, professor in transport strategy at Loughborough University in the UK, said that trams were good at increasing land values and sparking development in a way that bus services typically were not.

“When you have some sort of railway, whether a tram or train, governments are confident that increases land values,” said Prof Enoch. “As soon as you put rails in the ground there’s a perception the service won’t disappear.”

Expanding transport network

The scheme, announced by Abu Dhabi Transport Company at the Global Rail conference in Abu Dhabi, and approved by the Department of Municipalities and Transport, will eventually consist of three phases.

Initial plans centre on linking Yas Gateway Park, Ferrari World, Yas Marina Circuit and Yas Bay to Zayed International Airport, Etihad Plaza and Al Raha Mall.

Prof Enoch said that further development around the areas linked by the new tram was “certainly what the Abu Dhabi government will be hoping” to see.

“I imagine it’s a big driver behind why they’re building it,” he said. “Railways are still seen as a big development tool, much more than buses.”

Gridlock in Abu Dhabi. The development of tram and train networks aims to ease congestion amid a population boom in the Emirates. Pawan Singh / The National
Gridlock in Abu Dhabi. The development of tram and train networks aims to ease congestion amid a population boom in the Emirates. Pawan Singh / The National

Dr Alexandra Gomes, a research fellow at the London School of Economics who has studied planning and transport in Abu Dhabi, called the newly announced line “a good starting point”.

She said that if the new tram service helped to reduce the number of private cars in the city, “that is already a positive step”, and indicated that she would like to see the network expand.

“At present, however, the line seems to focus mainly on connecting the airport with key attractions, rather than serving daily commuters who still need to drive to work,” she said. “This is a good starting point, but ideally the tram line should be extended to link more central areas, such as downtown, and then connect outward to residential, cultural and commercial districts.

“In less dense districts, Abu Dhabi should consider an integrated transport system, ensuring that tram routes, in the future, connect smoothly with other public transport modes, such as buses feeding in to the tram network.”

Dr Gomes said that a dedicated lane for the tram was “essential”, as this would allow it to compete effectively with private vehicles that were often slowed by traffic congestion.

A connected city

Walkability around transport nodes is crucial, according to Dr Gomes, who was behind a major exhibition in the UAE capital and London called Abu Dhabi (Dis)connected, which highlighted the way the city’s roads could separate neighbourhoods.

“Using these new routes to encourage greater density and create a more compact, connected city would strengthen the public transport system and make it more competitive with the private car,” she added.

It was also important to consider, Dr Gomes said, the cost of using the tram, since the aim should be to encourage people to shift from cars to public transport, and the potential to introduce, as in other cities, a multimodal pass that included existing and future modes of transport. “Such a pass would make it easier for people to move around the city and even the wider region,” she said.

Prof Enoch, author of Roads Not Yet Travelled – Transport Futures for 2050, said that trams were typically seen as sitting in between metros and buses in terms of cost and function.

Metro systems are the most expensive, he said, and were best suited to moving large numbers of people over a small areas and were typically completely separate from other transport infrastructure.

Trams, often also called light rail, are less costly and sometimes share the use of road lanes with cars and other vehicles, which could cause delays but meant that the trams were very close to areas of demand. Buses are the cheapest option, but were off-putting to some people.

“Typically you have metros in massive cities like Shanghai, London or New York, and tram-type [transport] in medium cities like Nottingham [in the UK] or Stuttgart [in Germany],” he said.

A tram makes its way through Croydon in South London. Photo: Getty
A tram makes its way through Croydon in South London. Photo: Getty

“You can have trams on the edge of big cities. Croydon [in South London] has one and there’s all sorts of things being built on the edges of Paris. They’re cheaper than metros – not quite as effective at shifting people, but not bad … people who normally wouldn’t be seen on a bus, they might be prepared to us a tram for certain journeys.”

Abu Dhabi’s tram line has been announced amid a flurry of developments in rail transport in the UAE and across the Gulf region.

Rail plans gather pace

Etihad Rail’s passenger service is set to launch next year, with four stations announced so far – Abu Dhabi, Dubai, Sharjah and Fujairah. The journey time between Abu Dhabi and Dubai will be about 57 minutes.

Additional potential stations at Sila, Mirfa, Madinat Zayed in the Al Dhafra Region and Al Dhaid were highlighted on an Etihad Rail map on display at the Global Rail conference but have yet to be confirmed.

The ultimate aim is that passenger services will link the UAE to Oman and other countries in the GCC. Freight trains already operate on the line.

As well as the conventional UAE-wide passenger rail network, which will use the latest diesel rolling stock, Etihad Rail will later launch an electrified high-speed line between Abu Dhabi and Dubai that will reach speeds of 350kph and cut the journey time between the two cities to a mere 30 minutes.

Etihad Rail’s passenger rail network will connect to existing public transport infrastructure, including Dubai Metro, which is expanding from the existing red and green lines to include a blue line, set to open in 2029.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: October 04, 2025, 5:08 AM