Special Report Contents
- Federal government keen to prove commitment to funding project in northern emirates
- $32.8bn of construction and transport projects planned or under way in the UAEs north
- Emirate of Sharjah seen as having most potential to attract private investment
The UAEs northern emirates have always lagged behind Dubai and Abu Dhabi in economic and development terms.
GDP per capita was about $27,000 in Sharjah in 2014, and between $17,500 and $24,500 in Ras al-Khaimah, according to estimates by US-based Standard & Poors. This compares with Abu Dhabis GDP per capita in 2014 of $103,000.
But since the regional unrest of 2011, Sharjah, Ras al-Khaimah, Fujairah, Ajman and Umm al-Quwain have been a focus for federal investment. According to regional projects tracker MEED Projects, there are a total of $32.8bn of construction and transport projects planned and under way in the northern emirates.
The UAEs Ministry of Public Works (MOPW) is keen to show it lavishes attention and funds on the smaller, often ignored emirates. The media bus tours it organises to visit its projects are calculated to show off the well-maintained road network through the hilly landscape north of Dubai and include projects on the borders of Oman, to prove that the authority does not neglect these remote regions.
Often, infrastructure in the UAE is competitive, says Abdullah Belhaif al-Nuaimi, the minister of public works. But there is also a need for infrastructure in growing and mountainous regions, which should not be cut off from electricity, water and communications.
Almost 70 per cent of the Ministry of Public Works infrastructure spending is in the northern emirates
The northern emirates may not have Dubais towers or Abu Dhabis oil reserves, but the MOPW is spending tens of billions of dirhams on connecting the cities, and building facilities for residents. Almost 70 per cent of the MOPWs infrastructure spending is in the northern emirates, as Dubai and Abu Dhabi have already reached a high level of development.
The authoritys transport strategy focuses on connecting recently developed ports, such as Fujairahs oil storage facilities, to other transport hubs, including airports and major urban centres, by road.
Current road projects include a new Western Khor Fakkan Road, for which a consultancy contract has been awarded; the Shaam to Al-Dara Road, which will be completed by mid-2016 (designs are being finalised); and the 35-kilometre Sharjah-Dhaid Road, which is under design and due for completion by the end of 2017.
The ministrys roads department is also focusing on preventative maintenance for its 800km road network to reduce costs and improve safety.
The $6bn Etihad Rail project will further improve connections to the northern emirates. The $1bn first phase of the freight line in Abu Dhabi has been completed, with commercial operations to start later in 2015. A AED700m ($190m) budget to begin the second phase has been approved. Bids are due to be submitted in September. The plans are there and ready for rail, says Al-Nuaimi. Mass transport is the solution for the future, even if it is not in the culture. It is not so easy to just build more roads.
As well as federal transport, the MOPWs remit also involves carrying out healthcare, education and security projects on behalf of other ministries.
Between 2000 and 2014, 109 schools were built in the north and west of the UAE. They followed three or four standard models, not only as a cheaper, faster option, but also to ensure the same quality of infrastructure is provided across the emirates and that it meets international standards. Each project is developed individually; we pay attention to the surrounding environment, says Al-Nuaimi. We want remote areas to resemble the centre.
The designs are adapted to each particular site and incorporate sustainability (economic, social and environmental). The ministry aims to reduce electricity and water consumption by 30 per cent, in line with wider efforts, and bring up sustainability key performance indicators from 15 to 20 per cent.
For example, the AED70m Zayed sports complex in Fujairah will bring sporting opportunities to local residents. It will feature a stadium, a swimming pool, hostels and other facilities when it is completed in 2016.
|Projects under way in the UAEs northern emirates|
|Ittihad Road/Umm al-Quwain Falaj al-Mualla Intersection||Umm al-Quwain||AED150m||Combined Group Contracting||Starting phase two, completion in late 2016|
|Shaam Hospital upgrade||Ras al-Khaimah||AED85m||na||Completion in early 2016|
|Zayed Sports Complex phase one||Fujairah||AED70m||na||Completion in early 2016|
|Civil defence administrative building||Ajman||AED40m||na||Completion in late 2016|
|Al-Khazan kindergarten||Fujairah||AED20m||na||Completion in 2015|
|Central operations room||Ras al-Khaimah||AED19m||Al-Holy Contracting & Construction||Completion in mid-2015|
|Primary healthcare centre||Ras al-Khaimah||AED15m||na||Completion in late 2015|
|Six rest stops||Sheikh Mohammed bin Zayed Road, Masafi Road, E11||AED5m||Fala Road Contracting||Civil works, completion in 2017|
|na=Not available. Source: MEED Projects|
The MOPW has hundreds of projects under way, right up to the countrys borders, as it tries to keep up with rapid population and economic growth. As the authority is working on a 4.5 per cent GDP growth rate projection, the pace is not expected to slow in the next five years.
The ministrys strategy targets a level of infrastructure that improves standards of living and prosperity, says a ministry spokesperson. But we are not looking to replicate Dubai.
While both public sector and public-private initiatives are aiming to develop the northern emirates, Sharjah is seen as having the most potential to attract private sector investment.
Sharjah Investment & Development Authority (Shurooq) is leading the efforts there, by planning and studying real estate and tourism projects, then offering them to equity partners in the private sector. Shurooq has many projects in the pipeline, which it has completed feasibility studies on, says Mohamed Juma al-Musharrkh, head of investment promotion at the authority. We are open to joint ventures and we have various plots of land.
Shurooq has $420m of projects at the design stages or on hold, according to MEED Projects. This year, it revived the Al-Hisn Island project, originally announced in 2012. The leisure and tourism scheme aims to serve local residents, who live in one of the remotest areas of the UAE, on the border with the Omani governorate of Musandam.
According to state-controlled Emirates News Agency (Wam), the project is in the planning phase, with Jordans Wael al-Masri Planners and Architects working on the designs.
Shurooqs investment priorities fit in with Sharjahs new strategy of focusing on the tourism, education, health and environmental services sectors. We are in talks with co-investors for the Al-Jebel tourism project, says Marwan bin Jasim al-Sarkal, CEO of Shurooq. Our most important project is Noor Island, a new tourist destination for people who want to get back to nature. We are doing that by ourselves, but we are looking for investors for land or co-investment on other projects.
Sharjah Healthcare City (SHCC) is also in talks to find investors for a medical zone. It is completing the masterplan for the new 2.5 million-square-metre site in Sharjah near Emirates Road. The new area will have more space and be more accessible for both patients and investors, says Abdul Aziz al-Muhairi, director of Sharjah Health Authority. The government provides infrastructure and permits, but it is all private investment.
Tenders for infrastructure work should be issued shortly and work could begin as early as the first quarter of 2016. The area will operate as a free zone, with no taxes and 100 per cent foreign ownership. Investors can establish facilities of various types and sizes, including specialist hospitals, clinics, research centres, residential units for employees and warehouses for medical equipment. The site has space for a maximum of four large hospitals.
The zone will serve all the emirates, especially communities in the northern region of the country that face a lack hospital beds. It will also aim to attract medical tourists.
The healthcare sector is expected to grow 9.3 per cent by the end of 2016, says Al-Muhairi. By 2025, 25,000 beds will be needed across the GCC to avoid shortages.
Plans to develop SHCC were first announced in 2012 for a site near Sheikh Mohammed bin Zayed Road. Masterplanning was restarted when the site moved.
Selected projects by Shurooq
- Value: $136m
- Announced: 2012
- Stage: Planning and design
Al-Jebel Resort Chedi Khorfakkan
- Value: $123m
- Size: 261,808 square metres
- Keys: 170
- Hotel operator: General Hotel Management (Singapore)
- Main architect: Godwin Austen Johnson (Dubai)
- Announced: 2011
- Stage: Civil works under way, in negotiations with investors
Kalba ecotourism project
- Value: $700m
- Announced: 2012
- Stage: On hold, looking for investors
Sir Bu Nuair Island five-star hotel and resort
- Value: $136m
- Size: 37,721 square metres
- Keys: 96
- Announced: 2013
- Stage: Design, looking for investors
- Value: $22m
- Size: 45,000 square metres
- Announced: 2015
- Designer: 3deluxe (Germany)
- Stage: Design work complete