Abu Dhabi resumes museum projects after spending review
Posted on 25 January 2012 with no comments from readers
Last year Abu Dhabi slammed the breaks on public spending and contractors complained that the situation was like the sudden stop in Dubai three years earlier, with $30 billion worth of projects put on hold in Abu Dhabi.
But after a major spending review the Executive Council this week re-opened the state coffers. New budgets and opening dates have been approved for the Louvre, Guggenheim and Zayed National museums, the most high-profile projects put on hold.
Airport extension
In addition there will be a 700,000 square metre extension to the Abu Dhabi International Airport to raise capacity to 27 million passengers a year to be finished by the end of 2016.
Abu Dhabi is also going ahead with metro and tram systems, two highway projects and new industrial zones for petrochemicals, food and auto manufacturing. Other plans included almost 21,000 new villas for UAE nationals, 24 schools, 14 hospitals, six treatment centres and the Cleveland Clinic.
This is quite a shopping list and contractors will be relieved that Abu Dhabi is back spending again after reassessing its expenditure plans.
The re-think followed the $10 billion bailout of Aldar Properties last year that served as something of a wake-up call and prompted a review of all major projects and spending commitments. Some feared Abu Dhabi was embracing the age of austerity but that now appears very wide of the mark.
The leading emirate of the UAE wants to diversify its economy away from a dependence on hydrocarbons by spending oil and gas revenues on infrastructure that will deliver an economic return.
Museum controversy
How best to do this is always a major debate in Abu Dhabi. The museums are criticised as an expensive way to import foreign culture and entertain tourists but their value in terms of prestige is enormous.
Better housing, schools, hospitals, roads and public transportation systems are more obvious ways to enhance the standard of living in the UAE. Industrial zones attract new business and create jobs, although if they become too dependent on subsidies their worth is debatable.
Still the oil is not about to run out in Abu Dhabi for at least one hundred years at current rates of extraction, so the additional infrastructure is intended to enhance rather than replace hydrocarbons as a source of national wealth.
