Green line to provide Dubai with additional revenue stream

13 September 2011

The Roads & Transport Authority still in talks over financing of Al-Sufouh tram

Dubai’s Roads & Transport Authority (RTA) says that 106,000 passengers used the new Green line of Dubai metro in its first two days of operation. The line began operating on 10 September.

The opening of the Green line not only completes the Dubai metro project, but also provides the RTA with another much-needed revenue stream.

Dubai is already using the Salik road toll system as an additional revenue stream for the government, which is currently finalising an $800m loan deal secured by Salik receipts.

These revenues will help the RTA pay for the Dubai metro and the $1.1bn Al-Sufouh tram.

Due to financing issues with the Red line of the Dubai metro in September 2010, the RTA struck a deal to repay the developers and settle the claims of contractors.   

The Red line of the metro carried 30 million passengers in its first year of operation. The RTA is aiming to increase the amount of people that use public transport in Dubai to 30 per cent by 2020. Currently, the amount of people using public transport stands at just 12.6 per cent. The tram will carry about 5,000 passengers an hour in each direction once it is complete.

The RTA has no plans to move ahead with the planned Blue and Purple lines in the next five to six years.

Al-Sufouh tram was put on hold in June 2010 due to irregular payments from the RTA to the contracting consortium. The RTA is currently in talks with the consortium over how to finance the rest of the project. The Al-Sufouh tram will run 14 kilometres along Al-Sufouh road. The first phase involves the construction of a 9.5km track that will run from Dubai Marina to the Mall of the Emirates.

The success of Dubai’s metro stands in contrast to the slow progress of planned light-rail projects in Abu Dhabi.

Plans for a metro and tram in the capital have not moved forward significantly since consultancy contracts were signed in October 2010. Transport projects in Abu Dhabi are currently being reviewed since the emirate’s Department of Transport decided to cut the $68bn budget it had initially set aside for the development of a surface transport masterplan.

One rail project that is going ahead in Abu Dhabi however, is the $11bn Etihad Rail project. The first two rolling stock contracts have been awarded and the contract to carry out the civil engineering works is due to be awarded in September.

How the project will be financed is still under discussion between Etihad Rail and Swiss bank UBS, which won the financial advisory award in October 2010. The railway will eventually link Abu Dhabi with Dubai and the northern emirates.

A MEED Subscription...

Subscribe or upgrade your current 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.

Get Notifications