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UAE Bolsters Logistics Hub Status

DUBAI — The UAE has committed around $26 billion in investments to new air and seaport infrastructure projects to reinforce its role as a global trade and logistics centre, the bank Standard Chartered said 
on Wednesday.

The financial crisis notwithstanding, the UAE is on track to achieve economic diversification. Central to this strategy are the expansion of Jebel Ali Port, the launch of a new seaport in Abu Dhabi, a new airport in Dubai and the expansions of existing airports in Dubai and Abu Dhabi, the bank said in a report.

“The economic benefits of turning the country into a logistics hub are multiple. It encourages more firms to set up regional headquarters in the UAE. The meetings, incentives, conferences, and exhibitions sector benefits from improved access,” said Philippe Dauba-Pantanacce, senior economist at Standard Chartered.

The UAE can take advantage of its central location at the crossroads of Europe, Asia, Africa, and the Middle East. Dubai, the UAE’s traditional cosmopolitan trading hub, is transforming into a logistics hub as well, he said.

Jebel Ali Port, which accounts for roughly a third of Dubai’s gross domestic product, has embarked on a plan to expand capacity to 50 million 20-foot equivalent units, or TEU, by 2030, up from its current capacity of 30 million TEU.

The port, the third-largest re-export hub after Singapore and Hong Kong, became a symbol of Dubai’s rapid development at home and abroad, the report said.

Government-owned DP World, which manages Jebel Ali, is set to open a new port in Abu Dhabi – Shaikh Khalifa Port in Taweelah.

The first phase of the new port will open in 2010 with two million TEU and six million tonnes of general cargo capacity. The next phases of development will boost the port’s capacity to 22 million TEU and 35 million tonnes of cargo by 2028. Sharjah and Fujairah are also ramping up their port infrastructure, the report said.

Dauba-Pantanacce said that the UAE’s airport expansion push was facilitated by aggressive capacity expansion by the country’s government-backed airlines. Etihad Airways announced $14 billion in new aircraft orders in June. Emirates Airline will receive eight more planes this year and has 160 planes on order, worth a total of $50 billion, he said.

The country’s expanded infrastructure is supporting this push. Emirates opened a new terminal at Dubai airport, and Abu Dhabi is extending its airport, the report said.

Dubai’s new The Al Maktoum International Airport, now under construction, is to have five runways and a planned capacity for 160 million passengers annually, compared to about 60 million at today’s
 largest airports.

The airport is building its freight and logistics platform in coordination with Jebel Ali port to form Dubai Logistics City, a 21.5 square-kilometer logistics hub that links the airport and the port, the report said. 
— issacjohn@khaleejtimes.com