Dispute over financing slows development of Dubai Metro

24 October 2008
Transport and airports authorities disagree over funding for the Purple line.

The financing and route of Dubai Metro’s proposed Purple line remain in the balance because of an ongoing disagreement between the Roads & Transport Authority (RTA) and Dubai Airports.

The two government bodies are sharing the project’s cost but are still to agree how the financing will be split.

The budget for the 52-kilometre, four-line metro between Dubai International airport and the new Al-Maktoum International airport to be built at Jebel Ali is now more than AED40bn ($10.9bn), up from its original figure of $4.1bn in 2006.

“It has been agreed from day one that the costs would be shared between the RTA and Dubai Airports,” says a source close to the project. “The issue has been that no formula was laid down at the beginning.

“The RTA says this is an airport line with a commuter service. Dubai Airports says it is a commuter line with a link to the airports. Dubai Airports feels it should pay 20-25 per cent of the cost, while the RTA feels Dubai Airports should shoulder the majority of the costs.”

A steering committee has been set up between the two organisations, headed by Abdul Majid al-Khaja and Paul Griffiths, chief executive officers of the RTA and Dubai Airports respectively. The committee has met three times since August without progress.

“I imagine the issue won’t be settled at steering committee level but will have to go higher, to government level,” says the source. “Some heads will get banged together and it will get sorted out.

“The irony is that Sheikh Mohammed [bin Rashid al-Maktoum, ruler of Dubai] is head of both organisations and, ultimately, the money comes from the same pot.”

The line is scheduled for completion in 2015. Previous plans for a section of track to the current airport to be completed early have fallen through because the scope of the project has changed.

Dubai Airports is also understood to support a change to the current route, ignoring the existing airport in favour of a line between Al-Maktoum International airport and Dubai’s central business district.

The RTA, however, is adamant that there will be no changes to the planned route.

The Purple line is also now scheduled to be built entirely underground.

After the design expanded from two lines to four, the RTA and its consultant, US group Parsons Brinckerhoff, have decided that a line above ground would be detrimental to surrounding developments and would take up too much space.

“The design on the tender documents waiting to be sent out is for an underground line,” says the source. “However, until the funding is agreed and everything is signed off it is not set in stone.”

At MEED’s Rail Projects conference in Dubai on 15 October, RTA officials said prequalification for construction work on the project was likely to be pushed back from January to March 2009 (MEED 17:10:08).

“If Sheikh Mohammed decides, the situation could be resolved straight away and bidding can begin,” says the source. “Otherwise, the situation could drag on.”

The RTA and Dubai Airports were not available for comment.

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