UNITED ARAB EMIRATES: TRANSPORTATION AND TELECOMMUNICATIONS

TRANSPORTATION AND TELECOMMUNICATIONS

Overview: The UAE’s modern internal transport system was developed primarily in the 1960s and 1970s, with the construction of main roads to link the major cities. Maritime trade is a mainstay of the economy because of the UAE’s strategic location on the Persian Gulf, and Dubai’s ports at Mina Rashid and Mina Jabal Ali (the largest man-made port in the world) are considered the UAE’s premier maritime facilities. The road network is well advanced in urban areas, and a light rail system is under construction in Dubai City. The UAE has six international airports, and the emirates of Abu Dhabi and Dubai are both making major investments in airport infrastructure, potentially increasing passenger traffic exponentially over the next 10 years.

Roads: Transport within the UAE is almost entirely road-based. Development of the road network since the 1970s has been rapid, and the quality of the roads is good, particularly in Abu Dhabi and Dubai. The UAE has 1,088 kilometers of paved roadways, including 253 kilometers of expressways. Dubai Municipality, which is responsible for government transportation policy in that emirate, has announced plans to introduce tolls on its busiest roads in an effort to reduce growing traffic congestion. It also plans to expand Dubai’s urban bus network and promote commuter ride-sharing to alleviate this problem.

Railroads: The UAE currently has no rail network, but construction began in October 2005 on Dubai Metro, a US$3.5 billion, 70-kilometer, two-line urban light rail system. This project, slated for completion in 2009, will be 100 percent financed by the Dubai Municipality.

Ports: According to the UAE government, 15 commercial ports (including oil terminals) currently serve the country, with a total capacity of more than 70 million tons. Located in the city of Dubai, Mina Rashid, completed in 1972, is the leading port of the Gulf region. It has modern facilities to handle almost all types of commercial and passenger shipping, including roll-on-roll-off containers. Also located in Dubai, Mina Jabal Ali, completed in 1979, is the largest port in the country and the largest man-made harbor in the world. It deals primarily in bulk cargo and industrial material for the Mina Jabal Ali Free Zone, an international investment haven. In 2004 the two ports had a combined annual traffic of more than 77 million tons of cargo, nearly 6.5 million 20-foot-equivalent-units of containers, and 14,000 vessels. The two ports, collectively, ranked tenth in the world in terms of total container throughput in 2004.

In August 2005, the Dubai Ports Authority began the first stage of a multiyear, US$1.4 billion expansion project at Mina Jabal Ali that will increase storage-handling capacity to 2.5 million 20-foot-equivalent units by 2007 and to 5 million 20-foot-equivalent units by 2008. In September 2005, the Dubai Ports Authority merged with Dubai Ports International Terminals to create a single global port operator—Dubai Ports World, owned by the Dubai government. A new regulatory body, the Dubai Ports and Jabal Ali Free Zone Authority, was created to oversee the regulation and administration of Dubai’s port operations.

Mina Zayid, established in 1972, is Abu Dhabi’s main general cargo port. Its container terminals have a capacity of 15,000 20-foot-equivalent-units. A 15-year expansion of this port has been underway since 1998. The first phase, scheduled for completion in 2006, is expected to double the port’s container handling capacity.

Inland Waterways: The UAE has no waterways of any significant length.

Civil Aviation and Airports: The UAE has 35 airports, 22 of which have paved runways, as well as two heliports. Of the 35 airports, six are international.

Dubai is attempting to become a leading passenger and freight hub by undertaking several major initiatives. Dubai International Airport, which now supports 105 airlines, is undergoing a US$4.1 billion expansion, including the construction of a third passenger terminal, two new concourses, and a cargo terminal enabling cargo capacity of 3 million tons per year by 2018. As of third quarter 2005, passenger traffic at the airport had reached 18.5 million; by year’s end, this volume was expected to increase to 25 million passengers. The expansion is expected to increase passenger capacity to close to 60 million people per year. Also under construction is a major international airport at Mina Jabal Ali, which will have six runways and the capacity to handle 100 million passengers per year. In addition, the state airline, Emirates, is planning a major expansion. It has ordered 45 Airbus A380 “superjumbo” airliners, the largest single order for the aircraft from any airline.

Abu Dhabi International Airport, which supports 50 airlines, is undergoing a multi-year, US$500 million expansion project; a second terminal opened in 2005, raising passenger capacity to approximately 3 million per year. Al Ayn International Airport, built in 1994, supports 10 airlines, and plans have been made to spend US$20.5 million to expand its facilities. In 2003 Abu Dhabi launched Etihad Airways to compete with Emirates and has announced a US$7 billion investment program to expand the fleet from 35 to 100 aircraft by 2010.

Sharjah International Airport, the first airport to be built in the UAE, launched the low-cost Air Arabia Airlines in 2003 to serve destinations in the Middle East and Asia. The airport handles 1.3 million passengers per year. There are currently plans to spend US$61 million over the next two years to expand this airport’s facilities.

Pipelines: According to the U.S. government, as of 2004 the UAE had a total of 6,365 kilometers of pipelines. This total includes pipelines designated for various products: condensate, 469 kilometers; gas, 2,655 kilometers; liquid petroleum gas, 300 kilometers; oil, 2936 kilometers; and oil/gas/water, 5 kilometers.

Telecommunications: The US$250 million Dubai Internet City (DIC), opened in 2000, has made Dubai the regional center for e-commerce, attracting major international telecommunications firms. The DIC offers various incentives to companies that locate there, including 100 percent foreign ownership rights, tax-free corporate earnings (guaranteed for 50 years), exemption from customs duties, and full rights to repatriate profits.

Etisalat, the UAE state telecommunications operator, provides Internet access to 1.1 million users and has a virtual monopoly on the country’s telecommunications; it also operates and maintains the national and international fixed telephone line network, mobile telephony, and cable TV services. The company has been highly successful, has expanded outside the UAE, and has invested heavily in telecommunications infrastructure. Efforts are underway to end Etisalat’s monopoly in 2006, on expiration of the 10-year monopoly exemption negotiated with the World Trade Organization (WTO). In 2004 the UAE government established the Telecommunications Authority to oversee the general process of telecommunications deregulation.

The UAE is believed to have the best telecommunications network in the Arab World—the highest voice connection and broadband Internet connectivity capacity per capita. The UAE also has the lowest mobile-phone rates in the Arab world (US$0.06 per minute). According to the International Telecommunication Union, the UAE has more than 3 million mobile cellular telephone subscribers, as compared with nearly 1.2 million landlines in use. These numbers represent a penetration rate of, respectively, 85 and 28 lines per 100 residents. The technology used for domestic lines includes microwave radio relay and fiber optic and coaxial cable.

Except for those located in Dubai’s Media Free Zone, most television and radio stations are government owned. The government-owned Emirates Media owns Abu Dhabi’s radio and television stations. As of 2004, 15 television broadcast stations and 13 AM, 8 FM, and 2 short-wave radio stations were in operation.

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