At the height of the global economic crisis, in November 2009, Abu Dhabi’s Department of Transport (DoT) announced that it intended to spend $68bn on developing its urban infrastructure under a scheme known as the Surface Transport Master Plan (STMP).
Fast forward nearly two years and the DoT’s ambitious plans have been shattered as the UAE capital looks to rein in its spending. In June, the DoT slashed its budget for the STMP saying that the plan would be reviewed on a project-by-project basis.
The future of the STMP is fragile. While two of the projects are well under way, the port at Khalifa Industrial Zone Abu Dhabi (Kizad) and the first phase of the $11bn national railway being developed by the local Etihad Rail, others are in danger of languishing on the drawing board.
The original STMP outlined plans for highway improvements, an urban metro, a surface tram system, ferries, additional buses, air-conditioned bus stops, new regulations concerning taxis and a new passenger terminal at Abu Dhabi International airport.
The first phase of the railway has been prioritised as it will be used by Abu Dhabi National Oil Company (Adnoc) to transport granulated sulphur from its sour gas fields in Shah and Habshan to Ruwais for export. The rail line is expected to be completed by 2013.
But even this scheme has had its problems. At the start of the year, Etihad Rail cancelled two major consultancy deals. One was the project management consultancy contract with the US/French Parsons-Systra joint venture, which was then awarded to the US team of Aecom-Parsons. The other was a preliminary engineering deal awarded to the US’ Parsons Brinckerhoff for stages one and two. The UK’s Atkins will now carry out the preliminary engineering for all stages of the UAE railway.
Progress is now being made, however. This year, Etihad Rail awarded rolling stock contracts to US-based Electro-Motive Diesel and China Locomotive & Rolling Stock Corporation. The biggest contract still pending is the civil engineering contract for the first phase of the railway. In early October, bidders said that a consortium comprising Italy’s Saipem and Tecnimont and India’s Dodsal was the favourite after it submitted the lowest bid. An award is imminent.
The new port at Kizad is much further advanced. All the major contracts have been awarded and the first phase is scheduled to start operations in the fourth quarter of 2012 and will be operated by Abu Dhabi Terminals.
The future of the planned metro and tram networks is less certain. The schemes are still waiting government approval to move ahead. Aecom is heading the group that is carrying out the design for the $7bn Abu Dhabi metro.
A source from Aecom says the company has submitted its study to the DoT, which must then present it to the emirate’s Executive Council. According to the timeline, the first phase of the metro is due to be operational by 2015. This is now unlikely.
The $800m, 340-kilometre tram network is at the same stage as the metro. The consultants are Spain’s Typsa Consulting Architects & Engineers and Sener Ingenierie. This project is due for completion in 2014. At the STMP launch in 2009, the DoT said it hoped the private sector would contribute about 30 per cent of the total cost. In particular, the estimated $3bn Mafraq-Ghweifat highway was planned to be the first example of a public-private sector road financing in Abu Dhabi.
However, in April, the DoT asked the bidders to come up with alternative proposals to develop the project. Prior to this, a consortium led by Austria’s Strabag had been the preferred bidder.
Policymakers in the emirate were said to have been discouraged by the initial cost of the project and the length of the 25-year concession. The Abu Dhabi Executive Council is now considering how to proceed with the highway project.
Stalled transport schemes
The most severely delayed project is the $6.8bn new passenger terminal at Abu Dhabi International airport, the midfield terminal. Already five years behind schedule, the bid deadline has now been pushed back to 13 November.
The terminal is intended to be built between the two existing runways at the airport and to comprise 27,000 square metres of retail and food and beverage outlets.
Together, the stalled schemes amount to $17.6bn, more than 25 per cent of the total STMP budget. A key reason behind the review of the STMP is the reassessment of population forecasts used to develop Abu Dhabi’s economic vision 2030. It is still unclear which projects will be impacted by the review. But it is likely that the smaller projects, including upgrades of the emirate’s nine other regionalports and local roads and bridges, will go ahead.
In the short-term, the delays might be embarrassing for Abu Dhabi to concede, but in the long-term, less ambitious, financially more viable projects will be easier to develop and reduce the risk of overinvesting in infrastructure.