Sustainable change: Plans to diversify the local economy and provide more services

As government plans come to fruition, Al Gharbia – the western region of Abu Dhabi – will be a model of responsible and sustainable development for desert and arid coastal environments. The goal for the region is to accommodate appropriate growth, while offering its residents a high quality of life within the environment’s carrying capacity.

Guided by a master development framework known as Plan Al Gharbia 2030, the region’s economy is forecast to double in size, and the population is to increase from 185,000 in 2010 to 450,000 by the end of the plan. Already a hive of activity in the energy and industrial sectors, other areas of the economy – notably tourism, logistics and agriculture – are proactively being positioned for healthy growth.

Proof of the region’s potential can be seen in the large and growing number investments: the value of current projects in Al Gharbia is estimated to be up to $100bn, according to Mohamed Hamad bin Azzan Al Mazrouei, the director-general of the Western Region Development Council (WRDC).

GOVERNMENT LEADERSHIP: Development policies picked up pace with the establishment of the WRDC in 2006, which has a primary objective to promote sustainable economic development in the region. Working alongside the Western Region Municipality (WRM) and other government entities, it endeavours to enhance health and education facilities, provide social and employment programmes, support infrastructure development and promote tourism, as well as attract new investment. “To bring more foreign investors to Al Gharbia, WRDC has integrated investment packages and relevant statistics for interested parties,” Al Mazrouei told OBG.

FRAMEWORK: The strategic policies within Plan Al Gharbia 2030, which is a regional structure framework plan, provide a way of satisfying the needs of a growing population and of reversing the sometimes adverse trends in development. The framework’s policies are firmly grounded in the three basic elements of sustainability: the natural environment, economic development and cultural heritage.

The overarching development strategy of Plan Al Gharbia 2030 was released in 2010 – the end result of cooperation between the Abu Dhabi Urban Planning Council (UPC), the WRM, the WRDC and other major public and private sector entities. But in addition to providing an overall vision for development, the plan aims to define specific roles and projects for each of the of the region’s seven major communities, namely: Madinat Zayed, Liwa, Ghayathi, Ruwais, Mirfa, Sila and Delma Island.

The regional structure framework plan provides conceptual solutions to shape the growth of Al Gharbia over the next quarter century. These solutions address the major issues that shape urban form – the environmental context, land use distribution, transportation infrastructure and the network of connected open spaces – and then proceed through more detailed analyses at finer scales.

A number of investment opportunities have also been drawn from Plan Al Gharbia 2030, and were presented in the Investment Roadmap released in 2012. Providing a sector-based approach to developing the region, it highlights principal growth areas in key economic sectors such as energy, petrochemicals, agriculture, tourism and real estate.

ENERGY: Beneath the expanse of Al Gharbia lies vast hydrocarbons wealth, equating to around 7% of the world’s oil reserves and 3% of natural gas reserves. This sector is currently the main driver of the regional economy, contributing some 40% to the emirate’s GDP. The government is seeking to boost oil production and bring new sources of gas on-line.

The Shah gas field near Liwa is witnessing one of the largest ongoing projects: a $10bn development of sour gas reserves by Al Hosn Gas, a joint venture formed in 2010 between the US’s Occidental Petroleum and state-owned Abu Dhabi National Oil Company (ADNOC). “Al Gharbia will benefit directly from this project, with the introduction of new companies and facilities operating in the region,” Saif Al Ghafli, the CEO of Al Hosn Gas, told OBG, explaining that not only the energy sector but also transport, materials and logistics are set to gain from the project. “Hiring people from this area is a priority,” he added. Similar benefits are expected from the expansion of Abu Dhabi’s largest refinery at Ruwais, as well as from the onshore facilities being constructed nearby as part of the Integrated Gas Development (see Energy chapter).

ALTERNATIVE SOURCES: Hydrocarbons aside, Al Gharbia is also the primary arena in which Abu Dhabi is working to develop alternative sources of energy. Four nuclear energy plants are to be built in Baraka by the Korean Electric Power Company (KEPCO): the first is to come on-line in 2017, followed by one additional facility completed each year up until 2020. The first of these reactors by itself is to create more than 2000 jobs, of which 60% are expected to be allotted to UAE nationals, according to the Emirates Nuclear Energy Corporation (ENEC). Nuclear energy will provide baseload electricity to power the growth of the UAE while saving 12m tonnes of carbon dioxide emissions each year. Concurrently, KEPCO and ENEC are planning to sponsor a skills development programme for young recruits from the area. Beyond the reactors themselves, new roads and supporting infrastructure will need to be constructed and ultimately serve the surrounding areas.

By the time nuclear power hits the grid, the region will also be harnessing the sun’s energy. Scheduled to come on-line by the end of 2012, the Shams 1 project is a 100-MW concentrated solar power plant under development by Mubadala subsidiary Masdar, France’s Total and Spain’s Abengoa Solar. As the government pushes to increase the share of renewable energy to 7% of Abu Dhabi’s generation capacity by 2030, Shams 1 will pave the road for the development of further solar projects in the future.

PETROCHEMICALS: Further west, in the city of Ruwais, two massive industrial developments are being watched by petrochemicals executives throughout the world. Ranking as one of the world’s largest chemicals investments, the Madeenat ChemaWEyaat Al Gharbia (MCAG) project is in its first phase of development. This includes the building of an aromatics complex, which will begin to produce benzene, parxylene and mixed xylenes from naphtha feedstock by 2015.

Complementing this new addition to Ruwais’s industrial environment is Borouge, a producer of polyolefin. Established in 2001, the company has in recent years begun to expand. Once this growth is completed, which is expected by the end of 2013, Borouge is set to create the largest integrated poly-olefin complex in the world. In addition to generating significant employment opportunities in the local market, in 2011 the project was awarded multimillion-dollar contracts for engineering, procurement and construction by international contractors.

At the start of 2012 the Executive Council, the primary policymaking entity in the emirate, gave the go-ahead for two new industrial zones in Al Gharbia, which are to be developed by state-owned Higher Corporation for Specialised Economic Zones (known as ZonesCorp). The first, which will cover 14 sq km of land at Ruwais, will feature industries such as oil and gas services, petrochemicals, plastics, construction and logistics. The second will be at Madinat Zayed and cater to oil and gas services, food processing and light manufacturing.

TRANSPORT: By 2017, Al Gharbia will also be home to the first phase of the planned 1200-km Etihad Railway, the national rail system that is set to link the country together, from one emirate to the next. In October 2011 Etihad Rail, the master developer of the project, awarded the civil and track works for the first portion of the rail network, which will run from Liwa to Ruwais Port, to a consortium including the Italian giants Saipem and Technimont, in addition to Abu Dhabi’s Dodsal.

This part of the rail network, due to be completed in 2014, is for the service of the oil and gas and petrochemicals sectors, allowing sulphur extracted from sour gas at the Shah and Habshan fields to be transported to Ruwais for export, passing through the towns of Mirfa, Tarif and Madinat Zayed en route.

The next phase, which is due to be tendered in 2012 and completed in 2016 or 2017, is to link Al Gharbia and Abu Dhabi with Dubai. An extra link is expected to follow that will connect the emirate of Fujairah a year later. Initially, the railway will concentrate on freight traffic, but passenger services are expected to be introduced in due course.

LOGISTICS: Along with an increase in tourism, the imminent arrival of the new mobility of a nationwide public transport line is likely to drive growth in the logistics sector in Al Gharbia. “We expect the railway to alleviate congestion on the main international highway (E11) and provide a fast and competitive alternative for the region’s freight agents,” said Musabah Al Marar, the acting director-general of the WRM. Logistics and tourism should further benefit when the line is eventually linked to other Gulf nations, such as Saudi Arabia and Oman.

New roads are also helping to put Al Gharbia on the map. Among a host of infrastructure projects for which the Executive Council confirmed funding at the start of 2012 is the expansion of part of the 350-km E11 highway that will begin in Al Mafraq on the outskirts of Abu Dhabi City and make its way along the coastline to Ghuwaifat at the UAE-Saudi border. The E11 project will involve the construction of 15 new overhead interchanges.

TOURISM: At a time when unprecedented numbers of visitors are coming to Abu Dhabi and tourist spending is expected to rise dramatically, Al Gharbia is in a position to thrive. The region is home to seven beach resorts and desert retreats, including the luxurious Qasr Al Sarab and Desert Islands Resort & Spa on Sir Bani Yas Island. In fact, Plan Al Gharbia 2030 is looking to more than triple the hospitality sector’s contribution to GDP between 2010 and 2030.

FESTIVALS & SPORT: Several annual festivals represent an important sub-sector of the emirate’s tourism industry, many of them attracting tens of thousands of visitors each year. “We are getting a lot of international as well as Arab tourists coming to traditional events like the Liwa Date Festival and the Al Dhafra Camel Festival,” Al Mazrouei told OBG.

In terms of sporting events, for which Abu Dhabi is a centre in the Gulf region, there is the Al Gharbia Watersports Festival at Mirfa, which is one of the WRDC’s initiatives, as well as the motor vehicle events of Liwa International Festival (Tel Moreeb) and the Abu Dhabi Desert Challenge (see analysis).

REAL ESTATE: The WRDC’s Investment Roadmap envisages that there will be a demand for more than 10,000 residential units by 2020. They are expected to be delivered in multiple phases up until that point, principally in the industrial city of Ruwais, the business capital of Madinat Zayed, Sila and Liwa. On top of residential real estate, the WRDC’s vision indicates that there will be a need for around 10,000 sq metres of commercial and retail space in the region.

The development of additional residential units in the region is already under way, thanks to the National Housing Programme launched by the UPC. As part of this project, the Abu Dhabi-based developer Sorouh will construct 448 villas in the western town of Sila as part of a mixed-use complex that will feature a mosque, school, women’s centre and several retail outlets alongside the housing units.

The development of educational facilities in 2011 and 2012 has been also fuelling demand. In February 2012 the Executive Council approved the construction of residential compounds for teachers throughout Al Gharbia.

AGRICULTURE: With the government looking to address the issue of the emirate’s food security as a matter of urgency, stock farming and agriculture are both set to remain prominent features of Al Gharbia’s landscape and development plans.

It may come as a surprise that Ghayathi, buried deep in the desert, is home to a population of whom 48% are employed in agriculture. In Mirfa that figure stands at 21%, while at Madinat Zayed it is 30%. In Liwa, the centre of the emirate’s date production, 78% of the population works in the sector. By 2030 the government wants to see agricultural GDP more than doubled from its current level.

At Liwa’s 2012 Date Festival – which attracted 70,000 residents and visitors – farmers from Al Gharbia won international awards in the best production and distinguished producers categories. Given that the UAE was recently ranked as the world’s leading exporter of dates, related investments will continue to reinforce this strong reputation.

There is also real potential for growth in the provision of clean and sustainable agricultural technologies to existing farms. Sustainable agriculture is a priority for the government: “The local agriculture industry is being revamped to maximise resources in terms of water and soil in order to increase the product value per unit of resources consumed,” Rashed Mohamed Al Shariqi, the director-general of the Abu Dhabi Food Control Authority, told OBG. New technologies, such as sub-surface irrigation systems, fertilisers and machinery, have been marketed to the farmers of Al Gharbia and throughout the emirate at agricultural exhibitions held in 2010 and 2012.

PUBLIC SERVICES: The WRDC recognises that sustainable economic development will not come from money alone. One of the major challenges will be to provide the necessary social infrastructure and services to attract permanent residents back to Al Gharbia. According to the latest available figures from 2010, Al Gharbia accounts for 60% of the emirate’s land mass, but just 9% of its population.

If Plan Al Gharbia 2030 is realised, the population of the region is forecast to grow from 185,000 in 2010 to more than 450,000 by 2030, at which point it will represent around 15% of the emirate’s total population. An additional challenge will be to retain and attract an Emirati population: according to statistics from Statistics Centre – Abu Dhabi, Al Gharbia accounted for only 3.5% of total citizen births in 2010, while the bulk were in Abu Dhabi (53.4%) and Al Ain (43.1%). Still, the government hopes that by enhancing the hard and soft infrastructure, more families will be encouraged to settle in the region.

Steps have been taken to further expand the public services offering in Al Gharbia, including the establishment of one-stop-shop facilities known as Tamm centres. Offering more than a dozen government services that span immigration to waste management, four of these centres have so far been completed, and another two are soon to open. “A current project is the Multi-Task Employment Programme, which is designed to train locals to work in any of the kiosks at a given Tamm centre,” Al Marar told OBG. “The first stage is complete, but we now need to make the services faster and more efficient,” said Mohamed Al Hosani, the director of the regional development division at the WRDC.

EDUCATION: Bringing new schools and universities to the region is another way of encouraging residents to return. After two new schools began classes in Al Gharbia in late 2010, the 2011/12 academic year has seen two refurbished schools open and a further 12 merged, which has allowed the students to be moved to their newer and highest-quality facilities. “The private sector has a large role to play in the provision of new indoor facilities at schools,” said Al Marar at the WRM.

Upgrading soft educational infrastructure alongside new and enhanced buildings is also under way. The region’s new schools conform to Abu Dhabi’s New School Model, which was introduced in 2010 to place increased emphasis on critical thinking, IT skills and English language, among other aims.

The private sector is also playing a role here. “Many locals are willing to pay the extra fees for private education,” said Al Marar at the WRM. In collaboration with Glenelg Country School in the US, the Abu Dhabi National Oil Company has since 2008 established two branches of the Glenelg School in Al Gharbia, in Ruwais and Madinat Zayed. “As well as locals, the private schools are targeting the more permanent staff of the compounds used by employees of the oil companies at Ruwais,” added Al Marar.

TERTIARY PROVISION: The government is also pushing to increase both the quantity and quality of tertiary education options in the region. At present, Al Gharbia hosts the Higher Colleges of Technology at Madinat Zayed and Ruwais, as well as the Baynounah Institute of Science and Technology in Madinat Zayed. Abu Dhabi University and Zayed University both announced in 2011 that they are considering opening branches in Al Gharbia. All things being equal, Zayed University is likely to establish itself in the region as part of a complex of vocational training institutes and universities that is currently under development at Madinat Zayed.

EMPLOYMENT: The private sector has again been playing an important role in helping Al Gharbia’s youth enter the workforce. The WRDC is partnering with employers in key industries to assess what courses would best provide students with the skills they need for jobs in oil and gas, alternative energy, transportation, food and other key industries. In August 2011, the WRDC signed a memorandum of understanding with the Abu Dhabi Company for Onshore Oil Operations, part of which was aimed at joint work on education and job placements.

SUPPORT FOR LOCALS: These type of sustainability directives are increasingly used by the region’s key industry players. “In fact, it is quite familiar to see clauses in big contracts compelling companies to procure from local suppliers and invest in their development,” said Al Marar at the WRM, although he added that there is “an urgent need to create some kind of regulatory framework” on the issue.

Alongside these efforts to channel graduates into larger companies, the government is working to foster an environment in which smaller businesses can flourish. The WRDC, WRM and UPC have collaborated in formulating the Estishara programme, which assists start-ups and entrepreneurs with developing project designs, obtaining approval from relevant agencies, sourcing demand, helping to produce feasibility studies and exploring funding possibilities.

Through this scheme, the WRDC has helped to establish several start-ups including a desert hospitality attraction, a poultry farm and a building components manufacturing facility, among others. Further support for Al Gharbia’s entrepreneurs was made available in 2011, when the National Bank of Abu Dhabi collaborated with the WRDC to provide financial skills training for aspiring business owners.

OUTLOOK: Abu Dhabi’s government entities are all joining hands to catalyse economic growth. With a dedicated development council and ample potential funding from the emirate’s government, the realisation of the ambitious Plan Al Gharbia 2030 has so far proved to be feasible. Likewise, the private sector is already pouring billions of dollars of new investments into energy, industry and tourism.

Hand in hand, the public and the private sectors are striving to deliver the very best of opportunities to Al Gharbia residents. They are working together to ensure that the western region of Abu Dhabi will be a prosperous place for people to live and raise their families while enjoying high living standards.