In-Depth: The impact of UAE’s infrastructure on economic growth

Dubai – Decypha: The United Arab Emirates (UAE) has for decades been long-sighted in terms of investing in infrastructure. With the country’s economic development closely intertwined with its infrastructure, smart investment yields long-term results. Now the UAE has world class infrastructure, the best developed in the Middle East. In 2016, the UAE ranked the 4th globally on grounds of highly developed infrastructure with great macroeconomic environment and resilient institutions, according to the World Economic Forum – Global competitiveness report. With a well-integrated transport system and assembly of iconic structures, the Emirati nation is the most advanced in the GCC region, according to the UAE Construction Industry Outlook to 2020.


A closer look at transport infrastructure shows that it facilitates trade, encourages investment, supports economic activities, and is fundamental to social development. Poor transport infrastructure will adversely impact trade flows, as it causes higher costs, delays, and overall uncertainty. Furthermore, transport infrastructure is highly beneficial to the country’s social development, with a better mobility system enhancing people’s access to education, health, public offices, and consumption.


The UAE is continuing its trend in investing in infrastructure projects; just recently the Emirati government signed off projects with a total value of AED 410 million ($ 111.6 million) for roads, hospitals, and housing units to be built throughout the country. The Abu Dhabi Commercial Bank (ADCB) projects, as a result of infrastructure spending, that non-oil growth for 2017 will be 2.9% in 2017, up from 2.3% from last year, according to Construction Week Online.


UAE Road Connectivity Plan

There is a huge push in UAE to enhance current roads and to build new ones to improve road connectivity between the Emirates. Across the UAE, there are numerous infrastructure projects to be carried out by the Ministry of Infrastructure Development, according to Khaleej Times. The Ministry is investing approximately AED 1.43 billion ($ 390 million) in about 12 different projects, which includes five major roads connecting different parts of the emirate boosting road connectivity by 3,600 kilometres.


The roads to be built include the Sheikh Khalifa Road in Fujairah, E99 road, Hamad bin Abdullah road in Fujairah, Badea Bridge intersection in Sharjah, Etihad Road (E11), and the Emirates road extension.


The Sheikh Khalifa Road spans 4.4 kilometer in length and will cost AED 120 million ($ 32.6 million), to be completed in Q3 of 2017. The first phase of the project will connect the Sheikh Khalifa Highway in Fujairah with the Khatm Melaha Center and the E99 Road.


The Hamad bin Abdullah Street expansion, the main artery in Fujairah, is worth AED 250 million ($ 68 million), set for completion by Q1 of 2020, Middle East Construction News reported.


The AED 200 million ($ 54.45 million) Badea Bridge intersection will be completed by the end of 2017 and is expected to boost traffic flow between Dubai and Sharjah. Work on the intersection is comprised of three parts, namely, building a bridge between Dubai to Sharjah to University City, three-lane exit road for incoming traffic from Sharjah to Dubai, and bridge expansion at the intersection of Al Emarat Street and Maliha Street.


The E11 road is currently under construction, set to be delivered by Q3 of 2017, with a cost of AED 10 million.  Another project set for completion in 2017 is the Emirates Road extension, with investments worth AED 69 million.


Early this May, the UAE government inked a number of infrastructure projects for a total value of AED 410 million ($ 111.6 million), according to Construction Week Online. The projects stipulated will include construction of roads, renovation of a Medical City, and construction of a sewage network.


A new road will be built in Wadi Al-Qor, and another road linking Al-Hubab roundabout and Nizwa road will be built, approximately worth AED 290 million ($ 78.95 million). In Ajman, the UAE plans to start building internal roads for AED 11 million ($ 2.99 million) and upgrade Al Ajili road in Ras Al-Khaimah for AED 14 million ($ 3.81 million).


As part of the project, 16 new interchanges will be constructed as well as massive improvement work will be performed on 246 kilometres worth of roads from Mafraq to the border with Saudi Arabia and the industrial hub in Ruwais. Furthermore, new lanes will be constructed for both direction of roads between Mafraq and Baynounaha forest area, as well as between Baraka and Ghuwaifat.  The project is expected to see the light of day by mid-2017.


A key infrastructure project currently underway is the highway project in the Western Region of the UAE, worth AED 5.3 billion ($ 1.44 billion) in investment, to improve transport links in the region, reported Arabian Business.


Dubai Expo 2020

In November of 2013, Dubai has been chosen by the Bureau International des Expositions (BIE) to host the World Expo 2020. The announcement has provided stimulus to the construction and real estate sector, particularly the infrastructure sector, which has been on the road to recovery following the global financial crisis of 2008.


The six-month event, to be held between October 2020 and April 2021, expects to see about 25 million visitors with about 70% of those visitors from outside the UAE according to the Dubai Expo 2020 Projects Report by Meed Insight.


Infrastructure investment ahead of Expo 2020 is expected to be a growth driver for the country’s economy of the next two-three years, according to Reuters. The construction sector is projected significantly benefit, as Dubai increases spending by 27% in preparation for the event and infrastructure spending accounts for 17 percent of the total budget.


Dubai Expo site will be built in the Jebel Ali Dubai World Central (DWC) at a cost of $2-4 billion and its expected that supplementary infrastructure spending will be around $ 8 billion across the transport, hospitality, retail, and commercial sectors, according to initial estimates by Deloitte.


During the past year, over 1,200 contracts, worth more than AED 2 billion ($ 544.5 million), have been awarded by Expo 2020, which includes the deep infrastructure work at the Expo site in Dubai South. The Expo Site will cover 4.38 square kilometers and the infrastructure works entail irrigation and sewerage, pipes and cabling, roads, electrical and water, and telecommunications ducting, according to Emirates 247.  Dubai Expo awarded its first infrastructure contract in July of 2016 to Tristar Engineering and Construction, and now early infrastructure work on the site is now complete.


While the year 2016 can be called the design phase for all the Expo 2020 contract work, the next couple of years will be all about implementation, before international participants beginning work on their pavilions in 2018.



There are numerous infrastructure projects that have taken place in Dubai, as part of the five-year plan for constructing internal roads in several Dubai districts for AED 1 billion. Construction works in the 16 residential districts of Dubai has recently been completed at a cost of AED 835 million, by the Roads and Transport Authority (RTA).


THE RTA has completed new internal roads at Al Mamzar and Al Nahda 1 with further road construction underway in Nad Al Sheba 4, at a cost of AED 118 million and AED 89 million, respectively.


To improve access between Dubai and Sharjah, a new AED 500 million ($ 136.1 million) roadworks contract has been approved to improve 12km stretch to link Sheikh Mohammed bin Zayed Road and Emirates Road. The project will involve the widening of Tripoli road over a 6.5 km stretch from the intersection of the Sheikh Mohammed bin Zayed Road near Mirdiff City Centre, up to Academic City Road.


Furthermore, the roadworks contract will entail the construction of a 5.3 km three-lane road in each direction from the intersection of the Academic City up to the Emirates Road, bringing the overall length of the corridor to 12km, according to WAM.


This project will be implemented in parallel and “supporting corridor to the Airport Road Improvement Project" according to Construction Week Online.

The Airport Road project is currently under construction for AED 490 million, bringing the value of both projects to $ 272.2 million.


Abu Dhabi

Earlier this year, the Executive Committee of the Abu Dhabi Executive Council approved AED 241 million solely for infrastructure projects. One of the projects approved was to increase Al Ain city’s electricity network capacity for AED 55 million, which includes installation of an additional converter, six compact primary plants, and 13 kilometers of power cables and fiber-optic cables, according to Gulf News.   Another AED 45 million project has also been approved to transmit loads from key existing power plants to newly opened key plants in new Zakhir and Power House areas.


As part of Abu Dhabi’s plan to create integrated urban areas, an AED 76 million development project was approved to enhance and improve road network efficiency of external roads and bridges.


The committee has recently approved an additional AED 74.2 million ($ 20.3 million) for infrastructure development which includes major water supply network and the establishment of parks, according to Trade Arabia.


In addition, about AED 49.2 million ($ 13.4 million) will be allocated for the replacement of a vital water supply network of numerous basins in Abu Dhabi – all to enhance operational efficiency and meet the emirate's growing demand for water.  The Emirate has also approved the establishment of parks and sustainable utilities to meet the different segments in Al Ain for AED 25 million ($ 6.8 million).


Abu Dhabi has grand plans for an “intelligent transportation system” to be developed in Al Ain to help alleviate congestion and emissions, which has been approved in February by Abu Dhabi Executive Council, according to Arabian Business. A new project to help in early detection and response to accidents has also been recently approved, to cost AED 114 million ($ 31.06 million).


As part of the Abu Dhabi Plan to develop the quality of the Emirate’s infrastructure and strengthen its economic development, the Abu Dhabi – Dubai highway will be built. The AED 2.1 billion ($671 million) highway is about 62 kilometre in length and will open by mid-2017, according to Arabian Business. The project, comprised of four lanes in each direction, will connect Seih Shuaib area at the Abu Dhabi Border and the Dubai with the Sweihan interchange.


Dubbed Sheikh Mohammed bin Rashid Al Maktoum Road, this project has been hailed as the largest infrastructure projects implemented under Abu Dhabi 2030 Urban Structure Framework Plan, according to news agency WAM.               


“If you want to have a strong economy, you have to have strong infrastructure,” said Mattar Al Tayer, RTA’s chairperson. And so far, the UAE has lived by that quote. UAE’s infrastructure is the most advanced and developed in the region, which has facilitated and propelled the nation’s economy forward. While the global financial crisis of 2008 and the oil price slump of 2014 has curtailed spending on certain projects, but with the Expo 2020 now three years away, the infrastructure construction sector is on an upward trend of growth.

By Heba Eid

Decypha Contribution Time: 12-Jun-2017 08:22 (GMT)
Decypha Last Update Time: 12-Jun-2017 08:22 (GMT)