Expo 2020 Win: Infrastructure Boost Expected

Dubai’s prolific win to host Expo 2020 will fast-track infrastructure developments such as rail projects and ramp up logistics facilities that are worth billions of dollars.

After fighting it out with three other strong contenders, the emirate is ready to begin its preparations to host Expo 2020. According to official estimates, Dubai is set to receive 25 million visitors during the Expo while Expo-related expansion plans alone are expected to create 277,000 jobs over the next few years.

The effects of Dubai’s Expo win is already evident as the emirate’s stock market index jumped four per cent on Thursday in the opening minutes, rising above the 3000 point level for the first time since November 2008.

A previous Dubai Chamber of Commerce Study indicated that the emirate’s business confidence was at an all time high in anticipation of Dubai winning the Expo.

Remaining true to its theme of sustainability, mobility and opportunity, Dubai has allocated a large chunk of its Expo budget to building and developing its infrastructure and improving its logistics facility by 2020.

However, unlike other sectors, infrastructure is an integral part of a country’s economy and has paved the way for further development and not necessarily a bubble.

Traditionally, World Expos trigger an investment rush in infrastructure development to the host city. The Chinese government spent over $40 billion on developing and improving infrastructure in the build up to Shanghai Expo 2010, adding six new metro lines, roads, tunnels, bridges and a high-speed rail link.

Dubai’s plans to develop infrastructure in time for the Expo is no less ambitious. According to a Standard Chartered report, Dubai is expected to spend around $9 billion to fund its growth plans for the event. “Capital expenditure will be directed to develop city-wide infrastructure that is not already in the pipeline and the Expo area and the immediate vicinity, such as the extension of the Dubai metro red line,” said the report.

The Road and Transport Authority (RTA) announced earlier this year that it would fast track the expansion of Dubai Metro’s Red Line if the emirate wins the bid.

The expansion, which is worth Dhs5 billion, will extend the Red Line from the existing terminus at Jebel Ali to Al Maktoum International Airport, which is close to the proposed Expo site.

Mattar Al Tayer, Chairman of the Road and Transport Authority and a member of the Higher Committee for Hosting the 2020 World Expo said the expansion would take three to four years to complete and would be the only major transport investment required for the Expo.

“All we need is a small change,” he said. “We don’t need major change because the infrastructure is ready or almost ready.”

According to a CBRE report, development of the real estate projects around Dubai World Central (DWC) and expansion of the Al Maktoum International Airport would accelerate it as a new passenger hub and develop the cargo infrastructure.

The report also said that the importance of Jebel Ali ports will increase due to its proximity to the new airport and the Expo site.

The port will act as a key corridor for transfer of goods from the sea to the Expo site, boosting Dubai’s logistics while enhancing its competitiveness as a global trade hub.

Additional investment in infrastructure development is also expected to boost UAE’s recession-hit construction sector. The UAE is projected to spend $329 billion on major construction projects by 2030, according to an EC Harris study.

Big construction projects, which cost more than $1 billion, are due to peak in the UAE by 2016. The report found that projects worth $40 billion will be due for delivery in 2016.

“These programmes, particularly the more ambitious mega cities, are at the forefront of these enormous infrastructure developments which will bring diversification, foreign and domestic investment and job creation on an unparalleled scale,” said Alistair Kirk, head of infrastructure, industry and utilities, Middle East at EC Harris.

With the GCC hosting mega events such as the Fifa World Cup 2022 and Expo 2020, infrastructure development will receive a much-needed boost.