Decongesting Dubai

The Roads & Transport Authority has a tough job in keeping Dubai moving, but the hardest part may be coming to an end.

Dubai is the most gridlocked place in the Middle East, according to a survey by GulfTalent published in June.

People working in Dubai spend on average one hour and 45 minutes commuting to and from work each day, according to the survey, way ahead of Cairo in second place, where the average daily commute takes one hour 33 minutes.

The journey times recorded are particularly severe for those commuting to Dubai from neighboring Sharjah. On average, these commuters spend two hours and 44 minutes on the road, much of it in heavy traffic.

Every working day some 170,000 people travel to the emirate from Sharjah, which, together with heavy local traffic, results in gridlock on all major road corridors.

Clearing the chronic congestion from the roads of Dubai is one of the toughest jobs in the UAE and the responsibility falls to the Roads & Transport Authority (RTA).

Traffic congestion is at the top of the government's agenda. In November 2005, all transport projects and services were transferred to the newly formed RTA from Dubai Municipality.

At the launch of the Dubai Strategy 2015, ruler Shaikh Mohammed bin Rashid al-Maktoum did not speak about reclaimed islands or sky-scraping towers, he spoke of the emirate's traffic woes and reiterated the government's commitment to resolving the problem. "We have a problem and we have to deal with it," he said. "A study conducted by the RTA estimates traffic costs Dubai's economy $1,200 million a year."

Population growth and increasingly high rates of car ownership underpin the problem. "The population has grown at 6 per cent a year, and the number of cars is growing by 17 per cent a year," says Matter al-Tayer, chairman of the RTA. "In most other countries, you have 2-3 per cent growth in the number of vehicles on the road."

The government plans to spend its way out of trouble. "The RTA will be given an annual budget if $2,720 million to invest in new roads, along with alternative forms of transport, such as metro lines and bus routes to traffic moving again," Shaikh Mohammed told conference delegates.

Spending plans

A large proportion of this investment will be spent on roads. In late May, the RTA announced plans to spend $12,000 million, about $1,000 million a year, to boost road capacity. At present, cars are practically the only form of transport in the emirate – only 7 per cent of all journeys are made on public transport, although this is expected to increase when the first phase of the metro project is completed in September 2009.

"Our plan is to increase the capacity of the roads by building 500 kilometres of new roadways, 95 new interchanges, nine new ring roads, and increasing the number of creek crossing lanes from 19 in 2006 to 47 by 2008, and 100 by 2020," says Al-Tayer. "The total cost is estimated to be about $12,000 million."

A good start was made in 2006, when the authority awarded about AED 3,500 million ($950 million) worth of road contracts covering a wide range of projects including interchanges on Shaikh Zayed road, Emirates road and two new bridges across the creek. This trend looks set to continue. In the first six months of 2007, about AED 1,500 million ($400 million) worth of major contracts were awarded and more are scheduled to be tendered by the end of the year (see table, page 34).

The proposed projects for the coming year will upgrade existing junctions around the emirate and create new road corridors running between the Sharjah border and Jebel Ali. The two largest schemes, currently under design, are the parallel roads and the sixth crossing.

The parallel roads involve two new roads running between Al-Khail road and Shaikh Zayed road, and between Zabeel and Jebel Ali. The sixth crossing involves the constructions of a bridge across the creek in the Nad al-Hammar area connecting the proposed Lagoons development with Oud Metha and Zabeel areas.

Another major scheme is the Business Bay extension across Shaikh Zayed road through Al-Safa and into the Gulf. Tender documents for the first stage of the project are not expected until later this year, although it is understood to involve a series of road and bridge packages spread over the next two years as it will cut across the major highways, the Shaikh Zayed, Al-Wasl and Jumeirah beach roads.

The challenge for the RTA is finding sufficient contracting capacity. The number of contractors working in the market specializing in road and bridge building is limited.

Traditional contractors, such as the local/UK Dutco Balfour Beatty and the local Wade Adams Contracting, are already working on major projects for the authority and are unlikely to take on too much work for the same client.

To make matters worse, many established local contractors are reluctant to work for the authority after bad experiences in the past working on road projects for Dubai Municipality.

Reluctant bidders

Since 2005, a number of major projects have struggled to move ahead, with bidders proving hard to find. The first phase of the parallel roads scheme was retendered at least three times in 2006 and was delayed by about seven months before it finally attracted four bidders in January.

So the RTA is looking for new companies to tender for work. The results so far have been encouraging. New players such as Turkey's Yuksel, Japan's Taisei Corporation, Italy's Salini Costruttori, Abu Dhabi-based Al-Muhairy General Contracting and Beijing-based China State Engineering Corporation have all been awarded major contracts by the authority in the past year.

Despite these successes, the challenge of attracting interest remains. Closing dates for bids for interchange 8 on Shaikh Zayed road have been due to be submitted at least twice over the past three months, but each time only one bidder has turned up and the deadline has been extended.

The problem is that the RTA has to compete for the interest of international contractors with other clients across the region such as Qatar's Public Works Authority (Ashghal) and the various developers and authorities in Abu Dhabi, where contractors are being approached to negotiate work with developers under partnering agreements offering cost certainty and minimal risk. In addition, Ashghal has made Qatar a more attractive proposition for contractors by introducing a range of measures including new payment terms and local ownership regulations – neither have been adopted by the RTA.

Nevertheless, some contracts do still manage to attract enough bidders, especially when it involves working outside the town centre in simple projects. "The RTA does pressurize us into participating in its projects," says a local contractor. "Ideally, we would prefer not to work with them, but if we have to, we would prefer to tale a relatively straightforward scheme located somewhere out of town."

Despite its considerable spending plans, budgets could be another problem. Rising labour, plant and basic materials costs have caused budgetary issues over the past 18 months, and some schemes have been rebid even after attracting more than one bidder.

Contractors claim the authority's cost plans are outdated and fail to take recent price escalations fully into account. The RTA says contractors are including unreasonable margins in their prices. "It is a real stumbling block," says one consultant. "Contractors say costs have gone up, and the RTA believes the contractors are trying to rip it off."

But the hard work for the RTA should be coming to a close. Examples of delayed projects will undoubtedly remain, but moving projects from the drawing board to the site should become a smoother process in the future.

Last year, the market showed it was able to digest about $1,000 million worth of new projects a year. If $12,000 million worth of road projects are distributed evenly over the next 12 years, the current pool of contractors should be able to deliver all of the RTA's planned projects by moving from one scheme to the next.