Dubai World Central Major Transportation Hub

The Middle East’s air cargo growth is the highest among all other regions in the world representing 9.5% in 2007. On the other hand, the aviation sector is expected to grow by more than 30% annually for the next five years. However, a recent report by the International Air Transport Association shows a slowdown in passenger traffic. In this context, how confident are you about the growth in the aviation industry?

Growth in Dubai is very high. In 2006, there were 26 million passengers going through Dubai Airport and in 2007 there were 24 million passengers. We have to continue with that growth. Dubai’s strategy beyond 2016 is to focus on aviation and transport. That’s why Dubai’s government is investing in the largest airport city in the world.

Do you think the slowdown will affect the Dubai market as well?

I don’t think there is a slowdown in our region. Our growth of 30% is very high. However, we’re talking about the aviation business in the UAE and especially Dubai. Of course, there are other regions that we have to develop in the aviation sector. Aviation growth is very high, 30% is not a small number. In the aviation city, we are focusing on MRO – Maintenance, Repair and Overhaul. The figure that we have from 2006 shows that the Middle East is the fastest growing market in the MRO business, with a growth of 8.9% compared to other regions where it is 4%. Of course, the figure of 8.9% was at a time when there were no facilities or infrastructure available for the MRO business to grow. However, by having the aviation city in Dubai World Central, and by building the largest MRO centre in the world with 79 facilities, this 8.9% will increase three or four times by the time the facilities are ready. We are very confident that growth will continue. Also, there is very high interest and demand.

The $33bn Dubai World Central (DWC) is a 140 sq. km urban aviation community being built in Jebel Ali, Dubai. Let’s get back to basics, what was the original idea?

The idea and plan were started a long time ago by the Dubai government. They made studies and made sure they had enough time to implement them. So, we announced it at a time that was the right time to start it. As you see, Dubai International Airport is a very busy airport with high growth and this was the best time for Dubai’s government to announce its plan to build the largest airport in the world. Of course, it will be implemented in phases but the growth we’re going to have by building the C2 and C3 will enable Dubai to reach 70 million passengers by 2010.

Dubai World Central is to have a pioneering multi-modal concept. Can you tell us more about this?

The concept of an airport city is very unique. This includes the airport, all the business units around it, such as Logistics City, Aviation City, plus eventually an airport with a capacity of around 160 million passengers and an average of a million movements a year and a population of a million people to live in an area of 140 sq. km. We will have local accommodation to start with, and then we will have the commercial city, the exhibition city and more. So, this is all a solution for accommodation for the people that will be working in the area, as well as for transportation.

You mentioned that the concept of Logistics City is so branded because it is going to be the most sophisticated, the most integrated and the most complete city or logistics center in the entire world, not only in the region. On what level the integration will be accomplished?

Well, stage one – the first runway – is already completed, the fuel farm is ready and the control tower is under construction; about 90% is completed. In the residential city, there are already 500 plots of land for multi-storey buildings – G+5 to G + 9; some of these plots are already designed and ordered and will be under construction very soon. The infrastructure of the aviation city is ready; a few companies will start construction very soon. So, we are working in phases. Blue-coloured accommodation is to accommodate 35,000 employees and will be under construction in a month or two. We are trying to work in phases so as to make it ready according to our master plan.

Can you highlight some other pioneering concepts developed in Dubai World Central?

As we announced, we have several companies involved. The logistics companies have already started construction, including Panalpina Group, one of the top ten, and Aramex. In the aviation city, we have a few companies such as Gulf Aerospace and MRO businesses like Livewel; the largest Indian MRO company who has started the grand opening ceremony. There are more to come as we try to provide land to them and in a very short time they will start construction.

Of 40% of Dubai Logistics City, 25 sq. km leasable land was already reserved. Can you comment on how strong demand is to reside and operate within the free zone?

Dubai Logistics City is going to be the largest logistics city in the world with 12 million tones of cargo. We have a new concept at Dubai Logistics City; sea-air cargo. We have connectivity between the largest airport in the world, the largest logistics city in the world and the largest port in the world, which is Jebel Ali port. We also have a fast track between Jebel Ali port and the logistics city. We have very good experience, even with our partners; the logistics companies who will start their business this year. Air freight is very important for this region. Dubai is a hub for distribution to almost the entire Indian Subcontinent, Central Africa and the Central Asian zone where there is no connectivity between the seaport and cities.

In that context, what is the profile of companies that you are trying to attract and that are coming into the City?

We are very selective, when choosing companies we have criteria. The companies will have good business in the logistics city. Of course, we have to look at their business plan before we make a decision. We want to be one of the best logistics cities in the world and to have the best companies operating in Dubai Logistics City.

What can you offer to these companies?

Well, of course, as a free zone, they will be operating as a free zone company; they do not need a local sponsor as most companies in the Middle East require to start up. The second thing is there will be kinds of administrative services offered to the companies, such as providing employees with visas until companies update their license to operate. It’s a holistic solution.

You will open the first operations at the end of 2008. In your opinion, what will be the greatest challenge or the weak spot?

Our challenge is to make sure the company is operational by that time. In fact, we are ahead. Our target was to be operational by next summer – the second quarter of 2009 – but we’re trying to make it a bit earlier. We have a good team, we are following our schedule and we are ahead. We completed the runway in 18 months, which was very good timing – we originally estimated 24 months. The runway is four and a half kilometres long with a very high quality design.

What kinds of factors are making it happen?

The good thing is our leaders know what they want. This makes it very easy to go forward. Their encouragement is a big incentive for us.

How do you see the competition or complementarity between Dubai’s free zones and other emirates?

We don’t compete with others. As I said, this is a very unique area; the airport is not like other free zones, which are more like industrial zones. So, others have something different from what we have, whether you are talking about the Logistics City, which is specialized in logistics, or the Aviation City, which is specialized in aviation, and the same goes for Media City or Jebel Ali free zone. They have a different type of free zone. It’s about complementarity.

How do you imagine the whole area when finished?

To have an airport handling 160 million passengers is not a small business; it’s a big business. Secondly, by having connectivity between east and west, imagine how big the airport is going to be.

Do you think the infrastructure might be challenged in the future?

The challenge is always there but, of course, we have a good plan and a good strategy and we are ready for any challenges.

You have 40% of your goods in transit and then you have the goods held here for regional distribution. When we interviewed Tadweer, the waste management company, they said one of the main concerns is waste from transit goods. How are you going to respond to these environmental concerns?

As they say, the three most important things in business are location, location, and location. We have a very good infrastructure for road networking between Dubai and neighboring countries. We also have very good connectivity between the seaport and other seaports in the region. This means we can be a centre for distribution either by air, by sea or by land. So, this is a very important component for us to be the hub of the region. This infrastructure was provided a long time ago by building the largest harbor in the world in the 70s and by establishing Jebel Ali free zone in the 80s. So, this is not just one or two years’ effort and planning, this is the result of a long time of planning. Of course, this gives Dubai the capability to be a hub for this region as well as for the Indian Subcontinent and Africa, which has a population of approximately 1.5 billion people.

How do you address corporate social responsibility?

We started a long time ago. The first platinum-rated green building is in Dubai. His Highness Sheikh Mohamed Bin Rashid Al Maktoum, Vice President of the UAE and Prime Minister of Dubai, issued a decree in Dubai becoming the first to start the initiative of a green building in Dubai. We will encourage all companies to focus on environmentally-friendly facilities.

How do other international hubs, such as Singapore and Amsterdam, see Dubai World Central? Do you see a lot of international interest in what you are developing here?

Definitely. We will have good synergy between east and west, we talked today about our region – the Middle East. Singapore is in the Far East and Amsterdam in Europe. We will have very good synergy between Singapore, Amsterdam and other countries in the world.

Do you consider Dubai World Central and the free zones as bench marks in urban planning and destination living? Yes, even in our business plan for the future we take these issues into consideration. DWC represents one of the most important developments in the history of the United Arab Emirates. How do you think DWC will impact Dubai and the image of Dubai?

This is going to be the most important infrastructure for Dubai and this is the area that can attract a lot of visitors to Dubai: tourists, business, cargo, etc. So, this is not a real estate investment, this is definitely part of Dubai’s infrastructure and that of the UAE.

Do you have any final message?

To all our potential clients, look at this beautiful airport, its advantages and the facilities that are provided.