Abu Dhabi government gets breathing space

11 December 2014

The downwards revision of population estimates for the emirate means cuts in investment are likely to follow

The Abu Dhabi Urban Planning Council (UPC) expects that the capital will have 700,000 fewer residents by 2030 than originally projected. The downwards revision of population estimates will have a ripple effect on investment across the emirate.

In 2007, the UPC’s Vision 2030 plan set out a comprehensive plan to guide Abu Dhabi’s development in a sustainable way. The original plan was based on a population projection of 3.1 million residents in the city, with contingency plans for up to 5 million.

Seven years on, the current population of Abu Dhabi has reached an estimated 2.5 million, with 1.5 million in the capital, up from 809,000 in 2005, according to the Statistic Centre Abu Dhabi (Scad). However, this boom is set to slow and the capital’s population is only expected to reach 2.4 million in 2030.

Up to half of the investment envisaged in the past decade may no longer be needed.

This will primarily hit housing, healthcare and education investment, and civil infrastructure needed to support new developments. It will also dampen an already slow real estate market.

Effects on programmes to increase water and power capacity will also be felt.

Abu Dhabi had been facing serious shortfalls in capacity for water supply by 2015, as peak demand continues to grow. Delays at the Mirfa independent water and power project (IWPP), the largest water supply scheme under development in the emirate, mean it will come online in 2016 at the earliest. But these revisions suggest further capacity will not be needed as urgently as earlier thought.

It also grants some breathing space for strained power generation capacity until the Baraka nuclear power plant is scheduled to come online in 2017.

The Abu Dhabi government will be breathing a sigh of relief, but this is not good news for contractors hoping for a healthy project pipeline in the emirate.

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