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Dubai focuses on infrastructure

24 December 2024

 

It feels like Dubai has never had it so good. Economic growth remains robust, and as the outlook for other countries proves to be shaky, the emirate’s lifestyle proposition is attracting wealthy residents from around the world. 

As the city grows, it is becoming increasingly apparent that its infrastructure is strained and needs upgrading. An examination of the construction contract awards data over the past 10 years suggests why. After reaching a peak in 2017, the value of construction contracts in Dubai slumped to a low of less than $10bn a year in 2020 and 2021 before recovering in 2022 and growing strongly in 2023. 

Those new projects awarded during the recovery phase are still under construction and have not yet positively impacted Dubai’s infrastructure offering.

Dubai budget

As these pressures build, Dubai announced its budget for 2025 on 29 October 2024 with a 9% increase in government spending, and an extra $1.6bn for construction and infrastructure compared to the approved budget for 2024. 

Of the AED86.26bn ($23.5bn) of planned spending, 46%, or AED39bn ($10.6bn), will be allocated for construction and infrastructure schemes. “These projects encompass roads, tunnels, bridges, transportation systems, sewage stations, parks, renewable energy facilities and the rainwater drainage network development plan,” the emirate’s finance department said in a statement.

“This also includes the recently announced Al-Maktoum airport development project and other initiatives supporting quality of life and promoting smart and sustainable transportation strategies in Dubai.”

The 2024 budget had AED33.2bn of spending allocated for construction and infrastructure.

Population boom 

In the long term, the driver for infrastructure spending is population growth. The Dubai 2040 Urban Master Plan expects Dubai’s population to reach 5.8 million by 2040, up from 3.3 million in 2020. The daytime population is forecast to rise from 4.5 million in 2020 to 7.8 million in 2040.

In the short term, increased construction spending will also help the emirate overcome some of its most pressing infrastructure challenges. Traffic has developed into a major issue in Dubai and, over the past year, the Roads & Transport Authority (RTA) has pressed ahead with a series of road projects aimed at alleviating congestion. The most recent road project to be announced is the AED696m upgrade to the Trade Centre roundabout.

In early November, the RTA outlined plans to tackle traffic with improved urban mobility and infrastructure throughout the emirate. The estimated AED16bn ($4.3bn) 2024-27 Main Roads Development Plan comprises 22 projects across Dubai’s road network. It includes the construction of new roads and bridges at several key locations across Dubai.

The most immediate is the Al-Mostaqbal Road project, which, according to the official statement, will be awarded by the end of 2024. The project includes the construction of bridges and tunnels totalling 6.2 kilometres (km), increasing the road capacity from 9,000 to 12,000 vehicles an hour.

The Latifa Bint Hamdan Street development is set to commence in 2025. This project covers 12.2km of road network from its intersection with Al-Khail Road to Emirates Road. The project also includes 8.1km of bridges and will add capacity for about 16,000 vehicles an hour in both directions.

The Meydan Road development project includes 10.6km of roads, 3.3km of bridges and three tunnels totalling 1.5km. The project is expected to add capacity for 22,000 vehicles an hour in both directions and reduce the travel time from Umm Suqeim Street to the extension of Meydan Street to just four minutes.

After reaching a peak in 2017, the value of construction contracts in Dubai slumped to a low of less than $10bn a year in 2020 and 2021 before recovering in 2022 and growing strongly in 2023

A project encompassing Umm Suqeim and Al-Qudra streets covers a 16km stretch from the Jumeirah Street intersection to Emirates Road. The project includes the development of four intersections, including 2.5km of bridges and 2km of tunnels. It will increase road capacity from 8,400 to 12,600 vehicles an hour.

The Al-Fay Street development project will extend from Al-Khail Road at its intersection with Sheikh Mohammed Bin Zayed Road, passing through Sheikh Zayed Bin Hamdan Al-Nahyan Street up to Emirates Road. It includes 12.9km of roads with five intersections and 13.5km of bridges. The project will add capacity for about 64,400 vehicles an hour.

The Al-Safa Street development project will stretch from Sheikh Zayed Road to Al-Wasl Road. The project includes the construction of 2.1km of tunnels, including a two-lane tunnel providing direct access from Al-Safa Street to the City Walk residential development, as well as 650 metres of bridges. The project will increase the road capacity from 6,800 to 9,400 vehicles an hour.

The RTA also plans to expand the Dubai Tram network and is carrying out a study on deploying trackless tram systems at eight locations across Dubai. The self-driving tram system will operate on virtual tracks, using camera-guided painted lines on dedicated lanes. The electricity-powered system will have three carriages with a capacity of 300 passengers and an operational speed of 25 to 60 kilometres an hour.

Other plans include extending Dubai’s dedicated bus and taxi lanes to 20km and expanding the cycle track network.

A new metro line is also planned. In October, contracting consortiums submitted bids for the contract to complete a new Blue Line. Revised offers were submitted in late November, with the lowest-priced base offer coming in at AED19.8bn. The project was given a budget of AED18bn when approved by the government in late 2023. 

Airport plans

Another infrastructure concern is maintaining Dubai’s status as a global aviation hub. Dubai International airport is operating at close to capacity, and with no room to add to its two existing runways, a major new airport project is planned at Al-Maktoum International airport. Designs for that project, valued at $35bn, were approved by the government in April and all operations at Dubai International are scheduled to move there within 10 years. Tendering for major construction contracts is expected to start in 2025. 

Drainage is also a concern, with widespread flooding in April this year exposing the shortcomings of the emirate’s infrastructure. In June, the government approved a AED30bn project known as Tasreef, which will enhance the capacity of Dubai’s rainwater drainage system by 700%, covering all areas of the emirate.

The sewage system will also be upgraded with the $22bn Dubai Strategic Sewerage Tunnels project, which will be delivered as a public-private partnership. 

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Colin Foreman

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