Linking up the various networks

In addition to the construction of new transport infrastructure in Abu Dhabi, linkages between different forms of freight and passenger transport are set to deepen substantially in coming years, boosting the efficiency of local and regional supply chains. At the forefront of these improved connections will be planned interfaces between the new national rail network, Etihad Rail, and other forms of transport, including shipping and air cargo. Other connections, such as links between the road network and the sea, as well as between various forms of urban passenger transport, are also being strengthened.

A New Dimension

Improving multimodal connections is a priority for the authorities in Abu Dhabi. The emirate’s Multimodal Freight Master Plan, issued in January 2014, includes multimodal policy as one of its nine main themes and calls for “efficient physical interchanges between modes of transport” to be prioritised by, for example, ensuring “effective land transport access to major transport terminals”.

A major development that will significantly expand and deepen such multimodal connections in the emirate is the forthcoming launch of a national railway network, Etihad Rail. The company behind the project estimates it will boost the UAE’s GDP by up to Dh3.5bn ($953m) a year by 2030. The first stage of the system, which has been completed and is set to enter into service soon (see overview), will link up with maritime transport; its main purpose is to transport granulated sulphur to the Port of Ruwais for export. However, it is the second stage, which will see the network connected to Musaffah Port and Khalifa Port, as well as to Jebel Ali Port in neighbouring Dubai, and will also link up with the wider GCC rail network project, that will do the most to deepen the emirate’s network of multimodal interfaces.

Within Abu Dhabi, the connection between the network and the emirate’s largest port, Khalifa Port, will be particularly important – especially given that the Multimodal Freight Master Plan seeks to maximise the use of rail and sea freight transport, due to their lesser impact on the environment. In February 2014 Etihad Rail signed a memorandum of understanding with Abu Dhabi Ports regarding construction of an integrated bulk and container rail terminal at Khalifa Port; the terminal will also provide access to the Khalifa Industrial Zone Abu Dhabi. Seamless integration between road, rail and maritime transport at the site will be critical to the growth of non-oil exports and the diversification of the economy more generally given government targets for Khalifa Port and its adjacent industrial zone to generate 15% of non-oil GDP when all phases are complete.

Etihad Rail will also be integrated with air transport in the emirate; in April 2014 the firm said it was in talks with Abu Dhabi Airports about the construction of a rail logistics park at Abu Dhabi International Airport. This news comes as Abu Dhabi Airports and Etihad Airways seek to expand cargo capacity at the airport; Abu Dhabi Airports told OBG that it was in discussions with Etihad Airways over where to locate a new air freight facility and that 12 new dedicated aprons for cargo aircraft will enter into operations in late 2015 or early 2016.

Such additional infrastructure will accommodate rapidly rising air cargo traffic; the volume of freight transported through Abu Dhabi International Airport in 2013 stood at 706,456 tonnes (373,097 tonnes of inbound freight and 333,359 tonnes of outbound freight), up 24.4% from 567,964 tonnes the previous year, according to figures from Statistics Centre - Abu Dhabi. Asia was the largest source of incoming air cargo, with 170,280 tonnes, up from 162,763 tonnes in 2012, while Europe was the most important outbound destination, with 121,997 tonnes, up from 94,481 tonnes in 2012.

Port Connections

Connections between Khalifa Port and the UAE road network are also being upgraded. A new 62-km road between Abu Dhabi and Dubai, which will pass by the port and thereby improve road connections to the two cities and beyond, is being built parallel to the existing main road to reduce rising congestion. The road will have four lanes in each direction, with an option to expand this to six lanes, and will be able to accommodate 7000 vehicles an hour. A contract for the project was signed in December 2013, with the construction expected to take 30 months to complete.

The interface between road and sea at Khalifa Port is already highly efficient. Abu Dhabi Ports reports that truck turnaround times at the port’s container terminal takes 12 minutes on average, the shortest time at any container port in the region and representing a reduction of 70% since the opening of the port. Steps taken by the port authorities to bring waiting times down have included training drivers to use the terminal’s semi-automated systems and implementing an information technology system that allows drivers to choose a time window of their preference to load and discharge containers, among other things, according to Abu Dhabi Ports.

Ship-to-ship connections are also set to intensify at Khalifa Port in coming years, with trans-shipment operations forecast to increase from 5% of port activity in 2013 to around 20% by 2016. Khalifa Port is called upon by 20 major global shipping lines that have a direct connection to more than 52 international ports around the world.

Regional Constraints

Such improved connections will help to support the growth of the freight transport and logistics industry not only in Abu Dhabi, but also in the UAE and wider GCC, given that a large proportion of logistics traffic in the Gulf passes through the emirate. There are, however, some regulatory constraints that are limiting the growth of intermodal freight linkages and logistics in the region, and these are expected to somewhat reduce the links’ impact for logistics service providers.

“There are restrictions on consolidated shipments, express and e-commerce, via land within the GCC,” Yasser Zahreddine, senior station manager at the Abu Dhabi branch of logistics firm Aramex, told OBG. “Currently, you cannot move a consolidated shipment across a land border within the GCC to then be broken up and distributed to different customers within the second country,” he said, explaining that inter-GCC consolidated shipments could only take place by air, which adds to costs.

“An open-border policy and unified Customs law, with proper implementation would represent a major boost for the local logistics industry,” Zahreddine told OBG. However, he added that security concerns on the part of some regional states mean that this is unlikely to occur in the near future.

Passenger Hubs

A number of projects to improve access to more passenger-oriented forms of transport are also in the pipeline. Discussions regarding integrating the emirate’s planned metro and light rail system with Etihad Rail’s passenger services are taking place, though dates are not in place yet for the launch of either network. “We will need to integrate heavy rail with the metro and light rail networks in order to attract the maximum number of passengers,” said John Thomas, regulatory affairs advisor at Etihad Rail, adding that he expected that an integrated ticketing system allowing passengers to buy one ticket for use on both the metro and the railway system would be put in place.

Such plans will extend beyond transfers between different forms of rail transport. “There will eventually be several main transit hubs in Abu Dhabi City that will integrate all forms of transport – trains, the metro, cars, buses, walking, cycling and even water taxis in some instances,” said Falah Al Ahbabi, director general of the Abu Dhabi Urban Planning Council (UPC). The emirate’s Surface Transport Master Plan also seeks to ensure “hassle-free” transfers from cars to public transport through the creation of infrastructure such as park-and-ride hubs.

Road infrastructure is also being upgraded to deal with growing air passenger traffic. In April 2014 the emirate’s Department of Transport (DoT) announced plans for Dh638m ($173.6m) of construction work to improve access to Abu Dhabi International Airport in time for the opening of the new Midfield Terminal Building, which will eventually triple passenger capacity at the airport, in 2017. The authorities also intend to extend the metro and light rail network to the airport, which will involve the construction of an express metro service between the central business district of Abu Dhabi City and the airport.

Abu Dhabi Ports has also started construction on its new permanent cruise terminal. The cruise segment has been rapidly growing in recent years and efforts are being made by the port’s management and the government to help develop it to tap into tourist interest. The new cruise terminal will be well suited to cater to this new demand. Abu Dhabi has been included as a stopover within regional trips, for activities ranging from cultural excursions to major events, and 189,000 passengers visited in 2013/14.