United Arab Emirates Freight Transport Report Q4 2009

According to press reports in September, work was continuing on the development of the UAE's rail sector. Dubai was preparing to launch its local light rail network while the seven emirates acting together were drafting shared railway regulations. Dubai's local network was described as the world's longest fully-automated driverless metro system; introduced at a cost of AED28bn (US$7.6bn) the system, known as the Dubai metro, will when complete have 47 stations and 76km of track. For the UAE as a whole a consultant was expected to be appointed to help define standards for competition, licensing, and engineering procedures, with the complete package of regulations due to be finalised before the end of 2010. In July the authorities had announced the creation of a new Union Railways Company with startup capital of AED1bn (US$270mn), which would act independently of the regulator. The company would oversee passenger and freight services linking the seven emirates. It was expected that the first phase of the network would be built up around Abu Dhabi to serve its developing industrial sector. Subsequently a rail link between Sharjah and Dubai would be built, designed to ease exiting traffic congestion by road.

The UAE rail network would eventually connect with the proposed GCC (Gulf Co-operation Council) international network.

Since our last report, we have slightly lifted our macroeconomic forecast for UAE. While we see the contraction in 2009 being a little deeper than at first projected (-3.0% vs -2.9% before) we are projecting a stronger recovery with growth of 5.2% in 2010 (was 3.9%) and 6.4% in 2011 (was 4.6%). For the 2009- 2013 period as a whole, we expect GDP growth to reach an annual average of 4.2%, down from 7.5% in the preceding five-year period. The effect on our freight-traffic forecasts across the two periods is therefore quite strongly negative, although offset by continuing strong investment in transport infrastructure.

Although the UAE has developed a sophisticated infrastructure and its economy generates significant wealth, the country is reticent about providing official statistics. This is apparent in the dearth of published material on the freight-transport sector and BMI forecasts are based on very limited information. That said, we are predicting faster-than-GDP rates of expansion for freight carried by air, sea, and road. Despite the 2006 controversy over its role in the US, the globalisation of DP World (DPW) should drive higher growth in maritime freight. The net result of these and a few other small adjustments is that we now expect freight carried growth across all modes, measured in million tonne kilometres (mntkm), to average 3.7% per annum over the 2009-2013 forecast period.

According to our latest estimates, transport and communications GDP rose by 8.2% in 2008, 0.8 percentage points faster than overall GDP, which we estimate to have increased by 7.4%. For the 2009- 2013 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole in value terms. It will achieve average annual growth of 4.4%, versus 4.2% for overall GDP. The total value of transport and communications GDP will rise to US$22.15bn in nominal terms by 2013, representing 6.8% of the UAE's GDP.

The UAE economy is relatively dynamic and is now more diversified and shows evidence of robustness to withstand external shocks. Strong investment in transport infrastructure and the global ambitions of companies like Emirates and DPW will be positive factors. By transport modes, we expect the fastestgrowing in the 2009-2013 forecast period to be air, with an annual average of 7.9% growth in freight carried, followed by pipeline throughput at 4.6%, road haulage at 4.4% per annum (just ahead of GDP) and shipping at 2.6%.

• Executive Summary
• SWOT Analysis
• UAE Transport Industry SWOT
• United Arab Emirates Political SWOT
• United Arab Emirates Economic SWOT
• United Arab Emirates Business Environment SWOT
• Business Environment
• Freight Transport Business Environment Ratings
• UAE Freight Industry Ranking
• UAE Performance Index (LPI)
• Political Risk Summary
• Economic Risk Summary
• Business Environment Risk Summary
• Legal Issues
• Labour Force
• Industry Trends And Developments
• Rail
• Air
• Sea
• Industry Forecast Scenario
• Quarterly Oil Products Price Outlook
• Macroeconomic Outlook
• Transport Outlook
• Trade Environment
• Trade Regulations
• Market Overview
• Multi-Modal
• Competitive Landscape
• Road
• Infrastructure
• Competitive Landscape
• Rail
• Infrastructure
• Competitive Landscape
• Air
• Infrastructure
• Competitive Landscape
• Company Profile: Etihad Airways
• Water
• Infrastructure
• Competitive Landscape
• Pipelines
• Competitive Landscape
• Country Snapshot: UAE Demographic Data
• Section 1: Population
• Section 2: Education And Healthcare
• Section 3: Labour Market And Spending Power
• BMI Methodology
• How We Generate Our Industry Forecasts
• Transport Industry
• Sources
• List of Tables
  • Table: Middle East And Africa Freight Transport Business Environment Ratings
  • Table: Oil Product Price Assumptions, Q408-Q409 (US$/bbl)
  • Table: Oil Product Price Forecasts, 2006-2013 (US$/bbl)
  • Table: United Arab Emirates – Economic Activity, 2006-2013
  • Table: UAE Freight Transport Indicators, 2006-2013
  • Table: Freight Turnover, Domestic And International, 2006-2013
  • Table: Value Of Imports By Category, 2006-2013 (US$mn)
  • Table: Value Of Exports By Category, 2006-2013 (US$mn)
  • Table: Demographic Indicators, 2005-2030
  • Table: Rural/Urban Breakdown, 2005-2030
  • Table: Education, 2002-2005
  • Table: Vital Statistics, 2005-2030
  • Table: Employment Indicators, 2000-2004
  • Table: Consumer Expenditure, 2000-2012 (US$)