From glitz and glamour...

... to sewers and roads: infrastructure planning puts Abu Dhabi on a path for the future.

ANALYSIS, Business

After emerging from under the British protectorate banner of the Trucial Coast, and becoming part of the UAE in 1971, Abu Dhabi and Dubai have endured a similar history but have ended up in very different places. While both emirates enjoyed the discovery of oil in the 1950s and '60s, this was where the similarity ended. Abu Dhabi enjoyed immense wealth while Dubai, realising its resources were limited, embarked on a frantic re-branding exercise to market itself as a business and tourist destination.

But while Dubai chose a seemingly more glamorous path, driven by a need to secure its future prosperity, Abu Dhabi kept its cards close to its chest, and chose to take its time and use the experience gleaned from other cities around the world as to how to develop itself to become a destination in its own right.

Announcements over the past year regarding the Louvre and Guggenheim being launched in the Middle East are a clear indicator that Abu Dhabi is taking its expansion plans very seriously. And this, tied in with major projects such as Al Reem Island, Saadiyat Island and Al Raha Beach, to name a few, has acted as a catalyst for the UAE capital.

"In the last couple of years, there has been a great awakening in the market to opportunity and to establishing Abu Dhabi as a global brand, which has taken a lot of thought, consideration and planning," says Terry Comeau, vice president - project planning and development, Cansult Maunsell Aecom. "It hasn't been a case of 'build it now, ask questions later'. But there has been more of a focus from all the government ministries to come together to do intelligent design and planning at a level that the region hasn't seen."

Certainly the infrastructure challenges that have been recognised and subsequently addressed in Dubai is an avenue that Abu Dhabi is keen to avoid. "When you look at the US $150 billion (AED550 billion) worth of developments that will be underway and the infrastructure needed to service this, that's where the intelligence is focused - how to deliver infrastructure," adds Comeau.

"For us [Cansult Maunsell Aecom], this is a continuum, but what's changed is that there has been a quantum leap in terms of size and complexity and the degree of difficulty in achieving the level of infrastructure required."

Abu Dhabi's turning point, where investment in the region increased, was when the property laws were overhauled in August 2005, which allowed foreign nationals to purchase property. Speaking at Cityscape Abu Dhabi, Karen Lay, marketing manager, LLJ Property, says: "It was only last year when they started marketing property to non-UAE nationals and the choice was limited. Exhibitions like Cityscape Abu Dhabi are important; people are looking at the market, and they are seeing more coming on line, giving them more confidence. Initially there were a lot of investors buying, but now, in some buildings, they are doing one of two things: they are either buying as end users or looking at an investment strategy where they will buy smaller units which they then rent out and use the rental yield on something else."

Raed Al Hada, marketing coordinator, Reem Developers - a subsidiary of Reem Investments, claims rental prices went up 40% last year in the wake of greater attention and interest on the city.

"Abu Dhabi is different; it is, after all, the capital city," adds Lay. "And what I think they are doing is looking at other capital cities around the world and putting together a plan where they take the best elements - like the Louvre, Guggenheim and Formula One. That is the advantage of being a city that is developing now, rather than one that is 250 years old: you get the chance to look at what everyone else has done and pick the best."

Comeau agrees that Abu Dhabi is looking at a model of development akin to other capital cities or seats of government around the world. "You are looking at building a New York, an international city," she says.

But the extent of how far Abu Dhabi is willing to go was only really understood last month, when it was announced that Sheikh Mohammed bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai, had commissioned a new master plan. The ramifications of this action will be seen in an extensive layout redesign for many of the high-profile projects.

What is understood is that the revised structured masterplan effectively extends the Abu Dhabi grid system beyond the current Central Business District (CBD) area, downgrading from a motorway-style interchange network to an urban road network. This would afford improved general accessibility and flow with the CBD, with reduced segregation of communities and an improved overall aesthetic. Conversely this may reduce capacity in traffic signal controlled networks as well as some restrictions on future planning.

The ability to service those [projects] with materials is going to be difficult, especially when you consider that you are competing with Dubai.

While fundamental changes have taken place - Al Reem Island could now feature 17 bridges connecting it to the mainland as opposed to two in the original plans - it is believed the three developers responsible for Al Reem Island - Sorouh, Tamouh and Reem Investments - will be affected to varying degrees. While Sorouh already broadly complies, it is believed that Reem Investments and, to a lesser extent, Tamouh could encounter quite significant changes.

But it is agreed that such plans will be essential if Abu Dhabi is to succeed and avoid the congestion that is suffered by Dubai's population. "If you look at how Dubai has grown, it has had a wonderful exponential curve, because it has been the first city in the region to experience this kind of growth. They have seen it all, and they have had to develop the infrastructure while they go - that's tough. What we are hoping to do is build the infrastructure in such a way so that it provides a platform for the great architectural projects," says Comeau.

"From our perspective, we think it's just about the greatest thing that has ever happened, and it's interesting because it could only have happened in a place like Abu Dhabi," she says, highlighting the foresight the government has demonstrated in approaching the development in a more methodical manner, even if it means limiting the scope of future projects. "You have the pressure of the development community trying to build quickly and for quick returns, which is important to brand Abu Dhabi, but the wisdom here is very cool, because the leadership here has said 'no'. We will hold on the glamour and the glitz; we are going to tackle sewers and roads and make sure everyone has enough water to drink."

Omar Ayesh, president, Tameer, which is involved in Shams Abu Dhabi on Al Reem Island, believes the new masterplan is a positive step: "The government is being careful and researching so it doesn't have traffic or infrastructure problems in the future.

"I know personally from guys close to Sheikh Mohammed bin Zayed Al Nayhan, that they [the government] said they have enough money, a lot of land, and that they are not in a hurry. They want to study and do it in the right way. The last thing they want to do is have traffic problems in the future."

Ayesh adds that Tameer projects should not be affected as some of Sorouh's plots, which have not been sold, will be reduced to compensate.

At the same time, Comeau concedes that the disparity in growth between the two cities is indicative of the resources at Abu Dhabi's disposal. "Abu Dhabi is looking at a certain set of parameters and taking more of a public perspective. Dubai is developing as a financial and entertainment centre, with a Singapore or Kuala Lumpur-type model with fast growth and fast returns. And this is for good reason: Dubai doesn't have the resources that Abu Dhabi has in order to take its time."

But to possess resources does not cancel out the impact of market forces. And such is the strain on materials in the region that procurement is and will be a massive issue for contractors and developers in Abu Dhabi.
According to Mark Prior, regional managing director, EC Harris, securing a reliable supply chain for cement and rebar is a current concern as developments start to break ground. Although he adds that lead times for curtain walling and plant, for example, will not be felt for another year. "The smart call is to bring those lead-ins forward and start procuring the supply now," he says.

While the Abu Dhabi contracting market has progressed steadily for a number of years, a large number of projects, including Al Reem, Al Raha Beach and Central Market, are all coming on stream at the same time. "The ability to service those with materials is going to be difficult, especially when you consider that you are competing with Dubai," adds Prior.

To offset this potential conflict - and this has not even factored in development taking place in Fujairah and Ajman - Prior also believes that people will form joint ventures to secure their own supply lines for materials such as cement.

"I think you are going to see more developers forming alliances with contractors to try and secure and manage supply chains that way," he adds.

The challenges of procurement and infrastructure being witnessed in Dubai and the wider region have provided the perfect template for Abu Dhabi. Given the luxury of time and natural resources, the city is pursuing a vision of the future that integrates with the existing city while not compromising its heritage or culture. And while time and money are no guarantees to success, the new masterplan - with all its redesign implications - illustrates the lengths the government will go to deliver a world-class city without world-class problems.

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