The United Arab Emirates has approved a bill to set up an AED1bn ($273.9m) state-funded railways company.

The company, to be named ‘Etihad Trains Company’, will own, lease, rent purchase and sell trains, as well as investing in the transportation of passengers and goods and other rail businesses.

The company will run as an independent corporate body and through subsidiaries, headed by a board of at least seven state-appointed members.

The company will help link the country’s rural and urban areas boosting development, the government says.