Abu Dhabi is trialling its first PPP deal on a £1.5bn project to upgrade a “dangerous” highway
The emirate is also planning to use this approach on other transport projects, including roads and mass transport systems.
Under the pilot scheme, Abu Dhabi’s department of transport is seeking a company to upgrade and operate the Mafraq-Ghweifat highway, the main road linking the United Arab Emirates and Saudi Arabia.
Mott MacDonald is acting as technical adviser on the selection of a winning bidder, and it will also monitor the maintenance of the road over the 25-year contract period.
John Lee, highways and transport adviser at the transport department, said: “It’s a dangerous road, there are security issues.”
This is because the highway is an important artery and passes through Ruwais, an industrial town containing oil refineries. The project will involve bypassing the town.
Financial testing has convinced us ppp is the way to go for certain projects
John Lee, Transport adviser
The 325km motorway links Mafraq, near Abu Dhabi, with Ghweifat, on the western border of the emirate. The operation contract for the project is for 25 years and the operator will be paid by the government annually provided the road meets quality and safety requirements.
Lee said: “If the private sector is risking its capital, the road will be open quicker. The operator will also maintain the quality because its payment will depend on it. The intention is for this approach to be used on other schemes.”
He added that while the project was officially a pilot, “our financial testing has convinced us that PPP is the way to go for certain projects”. He expects the next PPP scheme to be a road between Abu Dhabi and Dubai.
Construction is due to start in August or September 2009.