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Dubai's Roads and Transport Authority, commonly known as RTA, has instructed toll operator Salik Company PJSC to install two new toll gates on key routes in the emirates to optimise traffic flow and reduce congestion.
With the launch of the new toll gates, Salik will see a jump in revenues, the toll operator said in a statement on Dubai Financial Market on Friday.
In a separate statement, Salik said the two new gates will be located at Business Bay Crossing on Al Khail Road, and Al Safa South on Sheikh Zayed Road between Al Meydan Street and Umm Al Sheif Street. The two locations have been selected based on extensive traffic movement studies by the RTA. "Their objective is to manage traffic distribution and reduce congestion by rerouting some traffic to alternative routes with greater capacity, facilitating smoother and more efficient travel for all motorists in Dubai."
The new gates, expected to begin operations by November 2024, will increase Salik’s total number of toll gates in Dubai from eight to ten. Similar to Al Mamzar North and South, Al Safa South will be linked with the existing Al Safa gate, whereby commuters will be charged only once if they pass through the two gates within one hour in the same direction.
Ibrahim Sultan Al Haddad, Chief Executive Officer of Salik Company PJSC, commented: “The addition of new toll gates in two increasingly busy locations marks the latest milestone in the growth plan that we set out at the time of Salik’s initial public offering. Our partnership with RTA in launching these new gates is another important step in our journey to enhancing Dubai’s transport infrastructure with smart and sustainable mobility solutions. These two new gates aim to improve overall mobility throughout the city, facilitating smoother and more efficient travel for road users.”
As per the concession agreement with RTA, Salik will oversee the essential civil works required for constructing, operating, and maintaining the toll gates and will acquire the exclusive right to operate the gates until June 2071.
The RTA expects the Business Bay Crossing gate to assist in improving traffic congestion by 12-15% on Al Khail Road, reducing traffic volume by 10-16% on Al Rabat Street, and redistributing traffic to Al Maktoum and Al Garhoud bridges and Ras Al Khor Street. Similarly, Al Safa South is expected to reduce right-turn traffic volume from Sheikh Zayed Road to Meydan Street by 15% and optimise traffic flow on Financial Centre, First Al Khail, and Al Asayel streets.
Details regarding the required upfront valuation and the funding mix for the installation of the new gates as well as the guidance on the expected revenue, EBITDA and balance sheet impact will be disclosed after completion of detailed traffic studies, Salik said.
Salik listed on the exchange in 2022 following an IPO in which the government sold a 20% stake raising 3.7 billion dirhams ($1 billion) and a market capitalization of $4.1 billion.
In its financial results for nine-month 2023 its net profits declined about 23% yearly to about AED 803 million. For Q3 however it made a net profit of AED 242 million, up 5% on year.
The toll operator is expected to be a key beneficiary of the recent surge in Dubai's population. The city has laid out its 2040 Urban Master Plan which envisages building a '20-minute city' where residents can access 80% of their daily needs and destinations within 20 minutes on foot or by bicycle.
(Writing by Brinda Darasha; editing by Seban Scaria)
