Dubai invests in more roads and airports

Dubai Government has approved three major new road projects costing $780 million and further projects associated with the multi-billion dollar expansion of airport facilities in the emirate. This is an investment to complete Dubai’s transportation into a service industry hub.

The famous Trade Centre roundabout is to be replaced with an intersection, Al Khail Road will be widened and its roundabouts removed, and Al Wasl Road will get underpasses to eliminate an accident black spot.

Airport excellence

At Dubai International Airport Concourse 3 has got the go ahead under new contractors and is scheduled for completion by the end of 2011, increasing total passenger capacity from 40 to 80 million, 10 million more than previously announced.

The first phase of Dubai’s second airport, Maktoum International, is to open in June next year, although completion will be pushed back beyond 2015. This airport will eventually handle 160 million passengers a year.

This ambition raises eyebrows. But last year Dubai handled 37.4 million passengers, and was the only airport in the world to increase passenger throughput in the first quarter, against the global economic slump, albeit by two per cent rather than its usual double digits, thanks no doubt to the opening of the stunning $4.5 billion Terminal Three.

Investing in infrastructure during an economic slump actually makes more financial sense than investing in a boom. Construction costs are far lower, and this cost saving increases the total return on the investment.

Also it makes good sense to build infrastructure in advance of an increase in demand, and not after it, as so many governments around the world do. For it is too late then and business suffers from poor infrastructure.

Future commuters

The banking and service businesses that will occupy the Dubai International Financial Centre, Downtown and Business Bay, for example, will expect first-class airport infrastructure and a road system that gets them quickly to work in the morning.

These staff do not want to leave the congestion of London for tax-free Dubai only to face a tough commute. They need not worry. Dubai is going to have the world’s newest metro and a great traffic system.

Present residents might have to put up with having the builders in town for another few years, but the long term benefit to the city will clearly be worth it. And as the dust settles on the global financial crisis over the next couple of years, it will be very clear which city offers the best welcome to service industry.

Staff will appreciate the excellent infrastructure, relatively low cost of accommodation and the tax advantages at a time when global governments will be raising taxes to pay for saving their banks from collapse.