Dubai considers PPP model for Union Square Metro station development

17 January 2012

Dubai public transport body planning second public-private partnership

Dubai’s Roads and Transport Authority (RTA) is planning to develop the area around the Union Square Metro station through a public-private partnership (PPP) and has approached potential advisers to help structure the deal.

A request for proposals (RFP) was sent to consultants earlier this month and responses are due by 23 January.

Sources who have seen the RFP say the project is intended to develop a mixed-use area to make Union Square an “iconic transit hub” including the metro station, bus station and taxi rank. There is currently no expected budget for the project, because no design work for what the area might include has yet been completed.

Once a group of consultants has been appointed, they will work on how to develop the site, financing options and how to structure the scheme as a PPP, although that may not be how the scheme ends up being developed. “The idea is for the consultants to see if a PPP could work for what they want to do and then come up with a project structure, rather than to start taking a project out to the market,” says one source who may bid to advise the RTA on the project.

The potential for developing the site through a PPP could be limited, as several of the potential advisers on the project describe it as being essentially a real estate scheme that the RTA wants the private sector to pay to develop.

Last year Dubai started seeking bidders for a PPP scheme to develop a water transport network along the coastline of Dubai. Work on the project is still under way, but has been progressing slowly, although it is understood a preferred bidder is now in place (MEED 20:05:11).

The RTA set up a PPP committee in mid-2010 to evaluate what schemes in its future development plans it could use PPP structures for. “The committee wants to explore whether PPP can used for every project going forward, even if that is just one conversation where it is decided it is not appropriate, there is that focus internally,” says one source close to the RTA.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.