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Tue 28 Nov 2017 03:37 PM

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Rail driving growth in UAE transportation infrastructure

Ongoing or planned railway projects in the UAE are worth $13.9 billion

Rail driving growth in UAE transportation infrastructure
Ongoing or planned railway projects in the UAE are worth $13.9 billion

Investment and construction in the UAE’s transportation infrastructure will remain robust over the coming decade, with the expansion of rail being a key driver for growth, according to a new outlook from BMI Research.

According to BMI’s key projects database, the UAE has the second largest transport pipeline in the Middle East, with a total of 71 projects collectively worth $54.6 billion currently under construction or in planning, which is larger in value than the UAE’s energy, utilities and social infrastructure pipelines.

While road projects account for nearly half of all active projects in the UAE, they account for less than 8 percent of the total pipeline value, reflecting the small size of individual projects.

With a number of long-distance and high-value projects having been completed in 2016 and 2017 and construction expected to slow down in 2018, the report notes that a “potential area for growth in the UAE road infrastructure sector is in sensors and supporting equipment for autonomous vehicles” to meet demand as autonomous and electric vehicles are increasingly used.

“However…widespread adoption of autonomous vehicles has the potential to negatively impact the demand for new road and rail infrastructure by significantly increasing travel speeds and utilization rates of existing networks,” the report said.

Railway projects account for the second largest component of the UAE’s transport infrastructure projects, with BMI identifying 15 ongoing and upcoming railway projects worth $13.9 billion as of November 2017.

Of these, the largest is the $11 billion, 1,200-kilometre Etihad Rail project, which BMI predicts will be the “primary driver of growth” over the next 10 years, despite first being suspended and then revised by Etihad Rail.

Additionally, BMI notes that urban transit projects such as the expansion of the Dubai tram and the construction of new metro and tram systems in Abu Dhabi “bode well for sustaining construction and investment activity in the UAE’s railway infrastructure sector.

Lastly, BMI predicts that the UAE’s airport infrastructure segment will “continue to be one of the strongest components of the overall transport sector, as both Dubai and Abu Dhabi pursue massive airport expansion and redevelopment programmes.”

“In the near-term, construction activity in the airports segment will be sustained by ongoing improvement and expansion works,”, while in the long-term, significant growth will come from projects such as the expansion of Al Maktoum International Airport in Dubai. 

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