Encouraging foreign investment was at the top of the agenda on Sunday at the Abu Dhabi Economic Forum (Adef) and officials said plans are afoot to make it easier for international investors to contribute to the emirate’s growth.
Laws may soon be revised to allow increased share of foreign ownership in industrial projects.
More than 1,000 foreign and GCC investors took part in the forum and government representatives indicated foreign capital would be encouraged to play a role – especially in industry, infrastructure and real estate – in the emirate’s masterplan, Abu Dhabi Plan 2030.
Adef was the backdrop for the announcement of Dh1.3 billion in new projects, which will be implemented over the next two years in industry, infrastructure and real estate. Naser Ahmed Khalifa Al Suwaidi, head of Planning and Economy Department, said the government is keen to take advantage of the huge oil revenue flowing into the region by creating a corresponding boom in industry, healthcare, infrastructure, tourism, real estate and energy. He said the capital has plans to actively encourage increased foreign investment.
Over the next few years, he said Abu Dhabi will spend over Dh91.8bn, including Dh36.7bn on infrastructure projects such as Khalifa Port, an industrial area, a train network, expansion of the Abu Dhabi International Airport and expansion of Emirates Univer-sity. In addition, Dh55bn will be pumped into refinery capabilities, industrialisation, marketing and oil and gas distribution projects.
Abu Dhabi predicts GDP to grow to Dh584bn by 2010
Foreign investment in Abu Dhabi has grown in a rapid and unprecedented manner, according to Salah Al Shamesi, President of the Abu Dhabi Chamber of Commerce and Industry. The growth to the efficiency and strength of the emirate’s economy, which is expected to grow between 8.2 and 13 per cent over the next few years, he said at the Abu Dhabi Economic Forum.
The jump is due to the rise in the Gross Domestic Product (GDP) in 2007, which is expected to have crossed Dh400 billion. By 2010, the GDP is projected to be Dh584bn.
In an exclusive statement to Emirates Business, Jaber Al Khaili, CEO of the Higher Corporation For Specialised Economic Zones (Zones-Corp), confirmed that new foreign investment legislation will be issued in the next few days that will raise foreign investors’ share in the ownership in new industrial projects.
Al Khaili said the Abu Dhabi Executive Council will soon draw-up the legislation, adding: “The current 49 per cent will be considerably increased in sectors that are most in need of foreign investments. Our aim behind this is to give a strong push to the industry in Abu Dhabi.”
When asked if foreign investors would be able to own the projects outright, he said such a move was unlikely. “One hundred per cent is impossible in the meantime. But there are good percentages that will considerably attract foreign investments. We will attempt to provide all factors of success for foreign investment. There are important industrial sectors that need to significantly raise the percentage of possession.”
He said ZonesCorp will soon launch a fourth industrial area in Abu Dhabi, where investments will reach as high as Dh10bn. Together investments in the four industrial areas will stand at Dh25bn. Al Khaili said the emirate’s government has plans to increase the area dedicated to industry from 20 million square metres to more than 200 million square metres. The number of factories, he added, has already risen from 1,000 to more than 2,000.
The industry sector today represents Abu Dhabi’s dynamic development, he added. “We are looking for strong partnerships with the UAE national and foreign private sector.
“The capital offers exceptional investment opportunities and has laid down mechanisms and regulations to facilitate the construction of factories.”
Meanwhile, Faisal Ahmed Al Suwaidi, Executive Director of the Highways and Infrastructure Sector in Abu Dhabi, told Emirates Business that new highway projects, costing Dh11bn, will be built over the next two years. They include the 320km Al Mufraq-Al Guwaifat Road with a cost of Dh8.8bn, the 80km Zayed City Road with a cost of Dh1.7bn, Dh145m Bani Yas Road and Dh170m Khalifa City Road.
Al Suwaidi said a new highway will also be built, linking Abu Dhabi and Dubai. The project is under study and will be announced soon, he said, adding that the new roads should go a long way towards ending traffic jams in the capital.
As for the emirate’s major airport, Khalifa Mohammed Al Mazroui, President and member of the Abu Dhabi Airport Company (Adac), said Adac will complete construction of a new runway in the next few days. A new terminal is scheduled to open its doors within weeks. The terminal will increase the airport’s capacity to five million passengers a year.
While international airports grow by an average of three per cent annually, Al Mazroui said in 2007 Adac expanded its capacity by 31 per cent over the previous year. He expects the same rate of growth this year.
Adac will have an additional terminal by 2010 that will be able to accommodate 20 million passengers each year. The company’s strategic plans, he said, include an expansion of the airport that will enable it to host 50 million passengers by 2030, when the Abu Dhabi Plan will be implemented completely.
But Adac is not planning to work alone. “We are looking for partners. We call on the local and foreign private sector to establish a strong partnership with us. Over the last two years it was proved that the local and foreign private sector is playing a big role in the development of Abu Dhabi airport and helping it to compete at international level,” he said.
Husain Al Nuwais, President of the Sheikh Khalifa Fund for Supporting Small and Medium Projects, seconded official declarations that Abu Dhabi needs new industrial projects, especially in the field of iron and steel.
He said the UAE currently consumes 10 per cent of the global production of iron and steel. He noted that the capital is trying to increase the share of medium-sized projects in the economic development plan from 20 per cent to 60 per cent. To assist smaller businesses, Al Nuwais said the fund has handed out loans valued at Dh40m over the past few years.
Abu Dhabi may raise foreign ownership in industry