Dubai Metro could lead to up to $7.6bn boost – DIFC

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    By Soren Billing  www.arabianbusiness.com 

    Dubai’s investment in a metro system could add between $4.6-7.6bn to the emirate’s national output, the chief economist of the Dubai International Financial Centre (DIFC) said on Tuesday.

    METRO MONEY: DIFC has calculated the potential benefits to Dubai of the metro system. (ITP Images)
    METRO MONEY: DIFC has calculated the potential benefits to Dubai of the metro system. (ITP Images)

    DIFC said empirical analysis shows that for emerging economies, a 1 percent increase in the stock of core infrastructure is associated with an increase in the level of national output of between 0.15 to 0.25 percent.

    A country’s stock core infrastructure includes transportation, water supply, wastewater treatment, and power facilities.

    “Since national output is about 4 times the value of core infrastructure, then an AED100 infrastructure investment can generate an increase in output of between AED60 to AED100 within a year,” chief economist Nasser Saidi and director of macroeconomics Fabio Scacciavillani said in an e-mailed statement.

    “In the case of the Dubai Metro the capital investment of AED28bn ($7.6bn) through 2014 will likely lead to an increase in national output of between AED17bn ($4.6bn) and AED28bn.”

    The Dubai Metro is expected to generate revenues of more than AED17 billion ($4.6bn) over the next 10 years, the chairman of Dubai’s Roads and Transport Authority (RTA) said on Tuesday.

    Sources of income would include fares, advertising, stores and AED1.8bn ($490m) worth of station naming rights, he said.

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