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Dubai Metro Red, Green Lines will add billions to economy by 2030

Estimates suggest that by 2020 and 2030, Dubai Metro’s “accumulated benefits” will respectively total $31.3bn and $63.7bn

Dubai Metro will add billions to the emirate's economy by 2030.
Dubai Metro will add billions to the emirate's economy by 2030.

The Dubai government’s investment in road and transport infrastructure totals $27.2bn (AED100bn), according to the director general of the emirate’s Roads and Transport Authority (RTA). Mattar Al Tayer, who is also chairman of RTA’s board of executive directors, revealed these details as part of a study that calculated the direct and indirect benefits of Dubai Metro’s Red and Green Lines.

According to the study conducted by University of Reading’s Henley Business School, Dubai Metro – since it was established in 2009 – had led to benefits worth $18bn (AED66bn) by 2016. Its cost-benefit ratio was 1.6 by the end of 2016, with its accumulated and operational costs valued at $11.1bn (AED41bn). Estimates suggest that by 2020 and 2030, Dubai Metro’s “accumulated benefits” will respectively total $31.3bn (AED115bn) and $63.7bn (AED234bn), with its capital and operational costs for the same years equalling $12.3bn (AED45bn) and $14.7bn (AED54bn).

IN PICTURES: Construction of Dubai Metro, 2009

“This means that every dirham spent on the Dubai Metro has yielded a return of 1.6 dirhams to the economy of the emirate in 2016, and this return will shoot to 2.5 dirhams and 4.3 dirhams in 2020 and 2030 respectively,” RTA said in a report.

Henley Business School’s study received assistance from various government departments, such as Dubai Land Department, Dubai Municipality, Dubai Statistics Centre, Department of Economic Development, and Department of Tourism and Commerce Marketing, as well as major shopping centres.

“For instance, the study benefited from the information provided about the selling and lease of properties, which helped to develop an analytical economic model to assess the impact of Dubai Metro on the real estate market,” according to a report by WAM.

“In doing so, the study analysed 50,000 sales transactions and 150,000 lease transactions conducted between 2009 and 2016 within a 500m radius of the metro stations.

“To examine the impact of the metro on urbanisation in Dubai, analyses and comparisons of aerial maps of areas surrounding Dubai Metro were carried out for the 2005-2017 period. In addition to the local information input, the study relied on various information sources and data including the review of more than 400 studies and technical reports worldwide,” the report added.

IN PICTURES: Top rail projects in the UAE

Commenting on these findings, Al Tayer said: “At a time when RTA celebrates the ninth anniversary of Dubai Metro, this study underlines Dubai’s keenness to invest in improving and widening its infrastructure, since it is the backbone of driving the competitiveness of cities and countries.

“The sustained improvement of roads, as well as transit systems and services witnessed by Dubai since the establishment of the RTA in 2005 have generated savings of as much as $34bn (AED125bn) in the cost of fuel and time.”

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Construction Week - Issue 745
Jun 30, 2019