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Dh200bn worth projects under way in Abu Dhabi

posted on 03/05/2010: 2485 views

The five mega projects totalling Dh200 billion now under way in Abu Dhabi will fundamentally change the emirate's production infrastructure, according to the emirate's Chamber of Commerce and Industry (ADCCI).

Dr Mohammed Abdul Rahim, ADCCI's economic consultant, made the announcement during the 'Reality and Prospects of Industrial Sector of Abu Dhabi' seminar, organised yesterday by the Department of Economic Development.

The projects are: Emirates Aluminium (Emal), built at a cost of some Dh21bn; Strata composites aero structures facility in Al Ain (Dh10bn); Abu Dhabi Polymers (Dh15bn); Emirates Nuclear Energy Corporation project (Dh73.6bn); and the Dh36bn computer chip plant by Mubadala and Globalfoundries.

Abdul Rahim said that in the coming years, oil and gas will not represent the largest part of the emirate's revenues. According to 2009 figures, Abu Dhabi has 346 industrial facilities, with investments of some Dh42bn or 50 per cent of the value of investments in the UAE.

There are problems, though. Abu Dhabi's industrial projects suffer from a lack of financing offers, said Abdul Rahim. This, in addition to the high prices of industrial land and cost of diesel, electricity and water, in comparison with other countries such as Saudi Arabia, make things difficult at times. Loans given are often not big and the repayment period is very short, he said.

Majid Al Owais, Director of the Industrial Institutions Development and Support Department at the Ministry of Economy, said the UAE's first industrial mortgage law has been finalised and will be enforced next year. The law regulates loans from banks for industrial projects and the guarantees that should be secured by the plants, especially the machinery and equipment, to ensure banks' rights.

Al Owais said the ministry has also finalised the new industry draft law, that will be enforced in the following months.

He told Emirates Business the new law does not include any texts related to foreign ownership. It is the cabinet that will set the foreign ownership percentage.

The number of industrial facilities amounted to some 4,644 in 2009 against some 3,294 in 2005, according to the official.

The head of DED's economic studies department, Muna Al Suwaidi, said Abu Dhabi had set up five industrial cities over the past 10 years.

The seminar recommended the establishment of an industrial bank in Abu Dhabi to finance projects, a reduction in the value of land and diesel and expansion of foreign ownership of several projects, especially the strategic ones. – Emirates Business 24|7


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