UAE: Private investors to enter Dubai public transport

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By Gamal Ragay  www.english.globalarabnetwork.com

Dubai has cleared the way for private investors to enter the emirate’s public transport sector, having laid the foundations for a partial privatisation of some operations in the state’s growing rail, road and waterborne networks, Global Arab Network reports according to OBG.

Dubai Metro
Dubai Metro

On October 19, Crown Prince Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, the chairman of Dubai Executive Council, issued a resolution clearing the way for the private sector to move into the public transport field. Under the resolution, the Public Transportation Agency (PTA) of the Roads and Transport Authority (RTA) will be empowered to issue licences to private companies interested in operating public buses and bus stations. The agency will also be authorised to lease public transportation utilities to private firms, on the condition that the companies adhere to the rules and regulations laid down by the PTA.

Though the RTA is looking to hand over at least some of its public transport concerns, the resolution made it clear that responsibility for the planning and introduction of new routes within the city, and for bus connections between Dubai and other emirates, would remain with the PTA. The agency would also be responsible for testing, maintaining and repairing RTA buses, and for licensing drivers.

Another resolution issued the same day set out the conditions for the RTA to lease operation rights for abras, or water taxis, with the authority retaining control of routes and maintaining a regulatory role.

The proposal to open up the public transport sector to private investment is not a new one, the concept having been raised a number of times over the past 10 years or so. Yet the idea was given added impetus last January when the RTA announced it had submitted draft legislation to the government aimed at promoting private involvement in the transport sector.

However, interest in taking over some of the RTA’s services has yet to be publicly announced, nor have the exact terms of any operational agreements been issued. What is also unclear is how keen the private sector is to buy into Dubai’s public transport network. To date, it is only the bus services and the abras that appear to be on the radar for limited privatisation, with no mention of the jewel in the crown, the emirate’s metro.

Potential private sector operators will need to proceed with diligence to ensure that by taking part in Dubai’s public transport system they can reap the dividends, so will likely look carefully at what routes the RTA may bring to the table. Finer details, such as shared ticketing arrangements, between those elements of the network that go private and the part that remains in state hands will also have to be hammered out. More info