The federal Cabinet yesterday approved Etihad Rail\'s plan to borrow Dh4.7 billion to finance part of the construction of a nationwide railway network, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, posted on his official Twitter feed. The bank loan would enable Etihad Rail to finance its Shah-Habshan-Al Ruwais rail line project, according to the official news agency WAM. The cabinet approval for the project will help develop the land transportation infrastructure and contribute to the the growth of the national economy, it added. Etihad Rail\'s mandate is to build 1,200 kilometres of railway lines in the nationwide project valued at Dh40 billion. It will be completed by 2018. The network\'s aim is to support the country\'s economic development, enhance transportation infrastructure and improve investment potential of the UAE through offering an alternative transport network. Article continues below Giyas Gokkent, chief economist at National Bank of Abu Dhabi, told Gulf News: \"The infrastructure spending will obviously stimulate the UAE economy. The network will allow transfer of cargo and thus release road capacity that would have otherwise been necessary. It will facilitate the growth and development of industry. When the passenger lines are built, these will contribute to and further connect urban areas.\" He added: \"It should also be positive for export development as the line will be connected to the port.\" Etihad Rail, which is 70 per cent owned by the Government of Abu Dhabi and 30 per cent by the Federal Government, expects to transport 50 million tonnes of cargo during the first phase. The locomotives will run on diesel, but there will be provision for electrification if traffic demands it. The freight trains will run at speeds of 120 km/h and passenger trains at up to 200 km/h. In October, Etihad Rail awarded the Dh3.3 billion civil and track works contract for the first stage of the railway network, that will link the Western Region cities of Habshan and Ruwais by 2013 and then Shah and Habshan by 2014. The contract was awarded to a consortium comprising Italy\'s Saipem, Tecnimont and UAE-based Dodsal Engineering and Construction PTE. Limited. The successful joint venture was selected through a competitive tendering process. Majorlink The Etihad Rail network is poised to connect the emirates and link the UAE to Saudi Arabia via Ghuweifat in the west and to Oman via Al Ain in the east. The project will be completed in three phases: Phase I of the project incorporates the Shah-Habshan-Ruwais route. Phase 2 involves the construction of the remainder of the Abu Dhabi Emirate Network and a connection to Dubai, covering areas such as Mussaffah and the Khalifa and Jebel Ali ports. The final phase will cover the rest of the network in Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah.