National Transport Authority (NTA) in the UAE said it has completed the evaluation of creating rail regulations and national standards for the UAE. A senior official from the NTA, making his presentation at the the Middle East Rail 2010, said the core business of the NTA is to create transport policies, grant legislation to the government, develop regulations and, most importantly, act as an enforcing authority.

"Rail is a new industry and there are no national standards in this region. Governance of this new industry is of absolute importance. Our vision is to create integrated transportation for sustainable growth," said Bassam Mansour, Expert Trains and Railway Systems, National Transport Authority.

"We have recently developed a unique national transport plan, which covers the entire country and all aspects of transport. There are several national railway standards governing all spectrum of the railway industry and as far as regulations are concerned we have completed our regulatory evaluation and have appointed a team of regulators and technical experts who are working with the NTA to deliver to the federal railway commission," said Mansour.

Licensing regulations

"We are developing 51 heavy standards and eight light transport system standards. These will be enforced through licensing regulations and reviews," he said. The NTA represents the UAE regionally and globally and is the body that enters into international agreements on behalf of the government of the UAE, he added.

The application of the law, according to him, will be in two parts – the regulatory and enforcements. "We cannot have an industry without structure and rules. Transport industry is a business of the government. Our role is to regulate those entities and their inter-operability," he said.

The regulatory regime, which is being designed for the UAE, has four aspects such as safety; market regulation, which is related to monopolies and anti competitive behaviour; economic regulation that relates to the licensing regulation; and engineering regulation concerning the interoperability. According to him, it is very important to develop a standard that suits the local requirements. "Most mature railway nations have their own national standard. We cannot import templates from Europe and superimpose it in this region. It has got to be fair and efficient that will achieve the balance we want, safeguarding public interest and ensure investor confidence is bolstered and strengthened," said Mansour.

Cross-border security

Earlier, participating in a discussion on laying the foundation of a sustainable rail industry, Stefan Schimming, Secretary General, Intergovernmental Organisation for International Carriage by Rail (OTIF), said when it comes to border crossing it is important not to repeat the mistakes done by other countries. "We need to ensure that customs organisations and authorities are engaged and customs controls are client related. While it is important that those controls should not cease, it should also ensure that authorities are in close contact with the logistics industry, so they can provide them advance information on tariff. It should be made public, eliminating the possibilities of corruption," he said.

Richard Bowker, CEO of Union Railways, was however of the opinion that regulations must just be to the extent that is required. Drawing on examples from the UK where excess emphasis on regulations resulted in the system turning out to be costly and bureaucratic, he said: "We have an opportunity in the region where we can get it right. Operational cost is interlinked with regulations and methods of operation.

"In the UK, there were some significant mistakes made and one of them was to believe that there was something so complicated with the rail that it had to have a system of regulations and market intervention in order to make it work. As a result, the cost went upwards adding to the process and bureaucracy.

"If I could do that again, I would make it my number one priority to demolish or certainly to start breaking down the system of regulations and particularly enter the pricing control. It is a barrier as we end up as an industry spending all our time worrying about how cost moves around within the industry, while particularly road transport steals our customers," he said.

"It is really the most fundamental issue and, therefore, particularly in this region, if we want to control cost we need to make sure the system, structures and regulations as well as the process that we put in place are focussed so that the rail can fairly be an alternative and not end up as a burden," he added.

According to Schimming, it is important for both national and international organisations of rail traffic to make a very clear distinction between the state responsibility for safety issues, trade regulations, etc., and not leave these to companies. "Otherwise, the companies cannot concentrate on commercial activity, competition, market possibilities and customs. All responsibilities for setting up safety standards must be left to the state," he said.

Bassam, however, felt a total deregulation of an industry will be a disaster. "We regulate to safeguard the public interest. At the end of the day, it should be a collaboration between the industry and the people."

Logistics sector

Bowker also added that the rail network, when complete, will be a major boost to the logistics sector within the UAE and the GCC.

"In terms of freight, we are already working on plans to transport bulk and break bulk such as steel, cement, aggregates and sulphur. The transportation of containers is an area where rail offers a ready-made solution. Here, the opportunity exists to develop purpose-built logistics parks and distribution hubs to bring the ports closer to the final markets and vice versa," he said.