With the biggest and busiest airport in the world, and as one of the most important, and fastest growing, international logistics centers, the Emirate of Dubai is building still further on its foundations as a center for international trade and travel. With 11.95 million overnight visitors in 2014, Dubai is attracting ever-greater numbers of visitors—be they for business, pleasure, or stopovers—than ever before. Transportation is, it seems, keeping up with demand, through projects on a scale that, outside China, only Dubai can realize. Yet Dubai’s ambitions go further still.
The UAE is now recognized as the world’s leading sea-to-air transport hub—a method of delivery that is around 50% less expensive than airfreight alone. The Dubai government encourages business- and customs-friendly regulation, and this has created a logistics-friendly climate (more than 74% of all air cargo that passes through the Middle East is processed by Dubai, a share that’s ever increasing). Dubai Airports, the government regulatory body that oversees their management, trumps Dubai as the gateway between east and west. As the fastest growing cargo hub in the world, it is hard to disagree.
Aviation is, and always has been, one of the UAE’s core pillars of growth, for travelers and cargo, and Dubai’s rapid expansion has risen hand-in-hand with that of its flag-carrier airline, Emirates. Such is the extent to which the city’s early aspirations hinged on its becoming a business and tourist destination of international clout. Emirates Airline alone flies around half of all passengers arriving in Dubai. The slogan for Dubai Airports is “Connecting the World.” A fair number of passengers never leave the airport, being only in transit, but Dubai is benefiting from positioning itself as the strategic hub not just for the Middle East region, but also Africa, South-East Asia, and Europe.
The tri-terminal Dubai International Airport (DXB) is the world’s busiest by passenger traffic, and the sixth most active by cargo freight. In 2014, DXB welcomed 70.4 million passengers (its total capacity is around 74 million) and 2.37 million tons of cargo. As of January 2015, DXB registered more than 8,000 flights a week to over 270 destinations—every continent bar Antarctica. A measure of DXB’s importance domestically is the number of jobs it creates, directly employing 95,000 people and indirectly supporting some 400,000 jobs around the world, according to Dubai Airports. Terminal 3 is the largest building in the world by floor space. The giant Concourse D, due to open later in 2015, will boost overall capacity to 90 million travelers a year.
This level of activity in the aviation sector makes up some 27% of Dubai’s GDP ($26.7 billion), a share forecast to rise to 37.5% by 2020. Yet with DXB now nearing full capacity, much of the future growth in air travel will be borne by the new—and colossal—Al Maktoum International Airport, located at the opposite end of Dubai, near the port of Jebel Ali in the new “airport city” of Dubai World Central (DWC). Al Maktoum has, in fact, been partially operational since 2008, yet is due to be fully operational only in 2027. When it does, with a planned capacity of a staggering 160 million passengers per annum, Al Maktoum will be the biggest and busiest airport on the planet, with no fewer than six runways. In 2014 it handled some 100,000 passengers, with most of its focus at present being operations relating to cargo. But these are modest beginnings for an airport that will soon take Dubai to the world-conquering heights it craves.
RAIL AND ROAD
If Dubai was built for the car, like so many young cities before it, the Emirate cannot be accused failing to put its efforts into greener, more efficient means of transport. Indeed, many of the infrastructure projects unveiled over the past few years are now seen to have been only the beginning. Dubai Metro, lauded as a great success (and the first for the Arab world outside Cairo), is being ever extended and more integrated as part of a massive investment in public transport across the Emirate. Dubai Metro began operating in 2009, and the initial two lines (Red, running alongside the important Sheikh Zayed Road, and Green) are due to be joined to three more (Gold, Purple, and Blue), and the original lines both extended. In 2014 the network carried 138 million passengers, or 377,000 journeys a day. The Green Line is to be extended by 12 stations (24km) and the Red Line by 15½km, bringing the Metro to the border with Abu Dhabi. By 2025, the network will extend to 221km, serving 69 stations. The system is modern, comfortable, and efficient: trains are automated, and driverless. Carriages are segregated for men and women—and be it standard or first class (Gold), all are air-conditioned. Thanks to heavy government subsidies, the metro’s standard-class tickets are among the cheapest anywhere in the world.
In November 2014, the Dubai Tram started running along a 10-km, 11-station stretch of line that will ultimately connect with the monorail to the ritzy Palm Jumeirah and the much more extensive Dubai Metro. Nineteen tram stations should be operational by 2017, according to the energetic government regulator, the Roads and Transport Authority (RTA).
All this emphasis on trains, though, does not disguise the fact that, in Dubai, the car is still king and will be for a long time to come. The central metro stations of Al-Rashidiya, Nakheel, and Etisalat each house multi-storey parking (free for metro users) for more than 2,500 vehicles. The country’s main (and, at 558km, the longest) artery is the E11, which becomes the infamous Sheikh Zayed Road in Dubai. Completed in 1980, the Dubai section was widened in 2006 to form a 12-lane super highway, six lanes in either direction. The road is an indispensable link in Dubai’s transport infrastructure, its traffic passing the World Trade Centre, the Dubai International Financial Centre (DIFC), and most of the city’s landmark hotels along its route. As such, it is one of the busiest in the Middle East, prone to speeding accidents by night, and paralyzing jams by day.
The RTA is preparing to invest $12 billion in 500km of new roads by 2020, when it is feared the number of private cars in Dubai will be 5.3 million. The new highways will be better designed, with 120 multi-level traffic interchanges and built-in flyovers to reduce junctions and congestion. It is a measure, though, of the Sheikh Zayed Road’s continued importance to the city—and that city’s dependence on the car—that a 12-lane highway is also a bottleneck.
Car ownership, at 541 per 1,000 head, is already higher than either London or New York, and the associated congestion is thought to harm the economy by some $4 billion a year. Around 8,000 taxis, a mix of private- and government-owned, operate in Dubai, and the ubiquitous cream-colored cabs are by far the most popular form of public transport in the city. The bus system, which, like the taxis, is regulated by the RTA, operates 193 routes making up 30 million journeys a week which, with the Dubai Metro, goes some way to alleviating the city’s dependence on car and taxis. That said, the average commuting journey for professionals is stubbornly stuck at 1 hour and 45 minutes.
Dubai’s growth in transportation and logistics over the past 10 years has been nothing short of spectacular. It is, with the Jebel Ali free trade zone at its heart, one of the five most important international shipping hubs in the world. The strategic location of the seaports—together with the world-beating cargo infrastructure of Dubai International Airport (DXB), now joined by Dubai World Central (DWC)—gives the city near-ideal advantages for logistics, with a relative dearth of local and regional competition.
The numbers alone tell the story. In the summer of 2014, Dubai moved the lion’s share of its cargo operations from DXB to DWC, the new airport handling 243,284 tons of freight in 3Q2014, up a whopping 462% on the same period in 2013. Meanwhile, the shift to DWC saw freight volumes at DXB fall only 3.1%, to 2.3 million tons in 2014, from 2.4 million tons in 2013. This is now close to capacity—the 2.5 million-ton Cargo Mega Terminal was opened in 2008, at a cost of $200 million.
Forming the other main link in Dubai’s logistics arm, Jebel Ali Port, constructed in the 1970s some 35km south of Dubai, is now home to over 6,000 companies, and is ranked as one of the three most important logistics hubs in the world. The long-term master plan for the port, to expand it in line with its cargo growth in turnover, was begun in 2001, and is being unrolled in 15 stages. The first phase increased storage and handling capacity to 2.2 million TEUs, and was completed in 2007. By the time the master plan reaches its conclusion in 2030, the port’s capacity will be an almost incalculable 55 million TEUs, easily eclipsing the Asian giants of Singapore and Shanghai to become, just like Dubai’s monumental airports, the largest in the world.
The $10.9 billion Etihad Rail’s network will extend 1,200km across the UAE from the border of Saudi Arabia to the border of Oman. Etihad Rail will have an extensive national network with freight terminals, distribution centers, and depots located close to major transport hubs, warehouses, and storage facilities across the UAE, including Mussafah, Khalifa Port, Jebel Ali Free Zone, Port of Fujairah, and Saqr Port.Upon total completion, Etihad Rail is slated to deliver fantastic economic returns. It will promote growth in various business sectors, provide jobs for the local work force, and expand the UAE’s logistics capabilities. Furthermore, the Etihad Rail project plays a fundamental role in the development of the industrial and trade sectors, a key pillar of the UAE’s future economy. According to Oxford Economics, the Economic Rate of return for the project is 15.5%, which is well over the standard rate of 10% recommended by the World Bank. Moreover, Etihad Rail is expected to bring an overall increase in national GDP of $1 billion by 2030.Phase I of the Etihad Rail project has been in the testing stage since 2013 and constitutes a 266km long rail network connecting Shah and Habshan to Ruwais. Phase I was financed by a loan arranged by the National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, HSBC Holdings, and Bank of Tokyo Mitsubishi UFJ. Phase I’s construction was carried out by a consortium consisting of Italy’s Saipem and Maire Tecnicmont and UAE-based Dodsai Engineering and Construction. Etihad Rail then created a joint venture with Germany’s Deutsche Bahn and Etihad Rail DB to operate the Phase I railway. For the 628k Phase II, the UAE government has financed the $190 million project directly to expedite its construction. Now in the tendering phase, Phase II will connect the Phase I lines to Mustaffah and Khalifa Port in Abu Dhabi, Jebel Ali in Dubai, and to the Saudi and Omani Borders. Phase III will then link up the northern Emirates to complete the UAE network and is estimated for completion in 2017-18.