Dubais Roads & Transport Authority (RTA) is set to announce the list of prequalified companies for the Union Oasis transit-oriented development (TOD) soon, the authority has said.
The decision by the RTA to offer minimum revenue guarantee has encouraged the largest domestic and regional [real estate] developers to participate in the prequalification process . The RTA should be able to announce the list of prequalified groups very soon, Ayman Abutaleb, financial expert at the RTAs CEO office, said on the sidelines of MEEDs Financing Projects in New Oil Era conference in Dubai.
The submission of prequalification documents closed on 28 February.
The minimum revenue guarantee required from the RTA, which will be calculated against the maximum revenue forecast model made by the participating developer, is now a biddable parameter. This means the bidder that requires the lowest guarantee from the transport regulator will likely win the tender.
The guarantee is seen as an important incentive for developers to obtain credit from lenders.
A TOD, which aims to improve the use of transport assets such as an urban metro, has been successfully adopted in several compact cities, such as Hong Kong. Once the Union Oasis project is awarded, we might consider developing the land within the proximity of the other underground stations as TODs as well, Abutaleb told MEED. The Dubai Metro currently has a ridership of 12 million annually.
The Union Oasis scheme is one of the first non-utility schemes in Dubai that will be procured under the emirates public-private partnership (PPP) law, which came into force in November 2015.
Real estate development does not belong to the RTAs core services, so it is best to hand these projects over to private sector partners, Abutaleb said.