Sleeping giant

zoom

Dubai World Central is set to start cargo operations from the third quarter of this year. We spoke to the corporation's new CEO, Abdulla Al Qurashi, to discuss its progress.

Amid the sand and dust on the south-western edge of Dubai, a new giant is rising. As seems to be the case with the vast majority of the emirate's investments in construction projects, Dubai's new airport, which is set to complement the existing Dubai International Airport, is already laced with superlatives.

With the total of area of the Dubai World Central project amounting to almost twice the size of Hong Kong island, and with throughput in terms of both passengers and cargo set to be the world's highest when the airport becomes fully operational in around 2015, regional and international observers are certainly excited about what they see as the future of air transport and logistics not just in the Middle East, but, potentially, in the world.

In addition, while current economic uncertainties plague the aviation industry worldwide, such concerns have yet to affect the Middle East's operators, whose strategic location is such that short-term decreases in international trade in the traditional markets hold no fears for the regional industry.

In the June 2007 edition of Air Cargo Middle East & India, we interviewed Michael Proffitt, then CEO of Dubai Logistics City - one of the many assorted parts that is set to form the Dubai World Central whole - who was bullish about the prospects for the mega facility.

Now, with cargo operations at the new terminals set to kick off by the end of this year, and with passenger services scheduled to begin in the third quarter of 2009, we caught up with Abdulla Al Qurashi, the new CEO of Dubai World Central, to ascertain how the plans for the facility are progressing, and his hopes for its future.

The dimensions of DWC-Al Maktoum International Airport, to give the hub its full name, have already been widely broadcast. With a full six runways - the first of which was completed in November 2007, two passenger terminals, plus a smaller terminal for regional and low-cost operators, the total number of passenger throughput the facility will eventually be able to handle is estimated at around 120 million per annum.

Roughly put, this is currently the volume passing through London Heathrow and Chicago O'Hare combined. But it is cargo operations where Al Maktoum International is really positioned to set the world alight. With potential cargo throughput estimated at around 12 million tonnes per annum - and this is not taking into account the state-of-the-art logistics centres and world-class connectivity - Al Maktoum International has the potential to dwarf the current market leaders, Memphis International Airport and the relatively new facility in Hong Kong.

But how long will it take before the airport can live up to these huge promises? "DWC is a multi-phased development and we're not in a hurry to go out there and build the entire infrastructure all in one go," says Al Qurashi. "The first cargo terminal has an annual throughput of 600,000 tonnes and, again, how much of that capacity will be utilised depends on the forwarders and logistics companies on-site. The idea is to build a facility which will never be restrained by space constraints and associated amenities." Certainly, here is an undoubted advantage that Dubai World Central has over its forerunners in Europe and North America, where many older facilities have already outgrown their limited environments. With the carefully staged roll-out of operations, which is scheduled to last for another eight years or so, it is clear that the architects of the airport's growth require its expansion to be as flexible as possible in order to meet the changing needs of global freight trade. "When the airport goes-live, only the first cargo terminal will be operational, catering to both the dry and the cool supply chain," continues Al Qurashi. "As demand increases, additional terminals will be built over the next few years, thus easing the pressure on cargo facilities at Dubai International Airport."

The staged approach also means that Al Qurashi and his executives are in no rush take over the mantle of the world's top airports immediately. "Memphis International Airport has had over 45 years of business, which has seen its cargo operations increase year-on-year," he explains. "It took 20 years from the time FedEx established Memphis as its global ‘superhub' in 1973 for the airport to hold onto the ‘world's largest cargo operations by volume' title, and the airport is also home to UPS' third-largest sorting facility worldwide."

Comparisons drawn with the current Dubai International Airport are thus favourable; it has seen consistent double-digit growth year-on-year over the last decade, in a period where other airports, particularly Chicago O'Hare, have seen their market shares decline. "The 12-million-tonne mark is our eventual capacity, and DWC has the land and the business plan to achieve this - if required," continues Al Qurashi. "How many years it takes to achieve this has not defined yet, but we expect growth to be one of the highest in the world."

Amid the figures being bandied around by aviation analysts, however, there also seems to be a resolve to ensure that the excitement being generated by Al Maktoum International does not translate into any unrealistic promises. "DWC does not compete with other hubs around the world but rather complements their efforts," outlines Al Qurashi. "Each continent has its own transportation needs and while Dubai caters to the growing Middle East, CIS and African and Asian markets, it merely acts as a trading gateway to a consumer population of around two billion, all within three to four hours flying time."

While the last remark may come as something of an understatement, it is clear that the strategic location of the emirate will play a huge part in the potential success of Al Maktoum International. New trade routes are constantly being opened up, and as the subcontinental air freight industry starts to heat up, Dubai looks set to be ideally placed to take advantage of the various methods by which logistics and transport companies choose to send their goods from emerging markets to the West. Even if the oil-price concerns have a lasting effect on international trade, as some analysts, fear, proximity to these emerging markets can only serve to treat Dubai favourably.

But what are the other reasons that make Dubai in general, and Al Maktoum International in particular, such a key location for the world's multinationals? "Dubai is already a hub for companies with regional operations, and this benefits the regional economy downstream," says Al Qurashi. "With the supply chain getting longer as manufacturing moves more and more to the Far East, Dubai's unique location will attract most manufacturers and distributors to set up shop in the region. Dubai Logistics City and DWC Aviation City [both to be located in the Dubai World Central project] are part of a free zone area and companies will benefit hugely from several tax and business advantages."

In addition, as Al Qurashi is quick to point out, the region itself is currently undergoing a growth spurt that will see the population increase by double-digit margins over the next 10 years.

As the airport begins to take shape in the desert, there has already been a wealth of companies eager to sign up to its facilities. Over 150 firms have either signed or reserved land in Dubai Logistics City, with plots ranging from 30,000 to 150,000 square metres.

Dubai Aviation City, which is being designed as a one-size-fits-all location to serve all aviation-related operations, already has seven international and regional companies signed up to benefit from its services, ranging from MRO and FBO operators to aviation training academies.

Given the size of the Dubai World Central project, there has understandably been a question mark over the future of Dubai International Airport, although Al Qurashi is quick to quash questions over the airport's eventual ‘retirement'. "No, the two airports will complement each other for as long as we can see now," he confirms.

Under these circumstances, it is clear that the transport links between Dubai World Central and Dubai International Airport, plus the Jebel Ali Free Zone (Jafza) need to be watertight. "DWC is working closely with Dubai's Roads and Transport Authority to develop connecting roads that will ease traffic to and fro to the existing Dubai city centre 40 kilometres away," continues Al Qurashi. "A dedicated customs-bonded fenced road corridor between the airports will enable easy and fast transfer of goods. Similarly, a 10-kilometre customs-bonded fenced dedicated road between Jebel Ali port and Dubai Logistics City with a bridge over the Emirates Road will enable speedy movement of goods with a turnaround time in ideal conditions expected to be as little as four hours."

The burgeoning sea-air freight industry, which involves the transportation of goods to the UAE by sea, where they are packed onto jets and flown to the West, is also set to benefit from these links. "Due to the customs-bonded nature of the area connecting Jafza, Dubai Logistics City and DWC Aviation City, trucks can move quickly and easily from the port to the airport," says Al Qurashi. "The cargo terminals have airside access and are located right next to the first runway."

Of course, such a gigantic operation comes at a huge cost, and Dubai World Central's infrastructure fees run into US$33 billion, with Phase One of the airport alone costing $8.1 billion. As is only natural with such a long-term undertaking, worries that budgets could overrun their limits might have occurred.

But Al Qurashi is sanguine about these possibilities. "Estimated costs of individual tenders tend to vary depending on the variables, as with any project," he states. And on the question as to which operators will be first moving out to the new facility, the CEO admits that he is still not sure. "Phase One will serve regional and budget airlines, business/executive jet flights and heli-taxi operations," he continues. "The next phase, by 2015, will see Emirates and all the other regional and international airlines move in gradually."

The countdown to the opening of cargo operations has thus started, with the first jets set to touch down in only a few months time to serve the first of Al Maktoum International's 16 air cargo terminals. For a project that has had 30 years of gestation, since Dubai's former ruler, Sheikh Rashid Bin Saeed Al Maktoum, originally earmarked the area as a future base of aviation operations, Al Qurashi is certainly striving to match the expectations that such a long wait has precipitated. "Demand is increasing year-on-year and logistics companies are looking at earmarking this facility as their regional hub. This development will be the region's premier logistics and transport location," he concludes.

Print | Email | Discuss this article |

USER COMMENTS (0 COMMENTS)

POST A COMMENT

CLICK HERE TO POST A COMMENT

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Security Code *
Please click post only once - your comment will not be published immediately.