Making the most of its surging petrodollars and large overseas assets, Abu Dhabi is looking to restart some of its shelved projects estimated at $30bn.
According to the latest GCC economic review of the National Commercial Bank (NCB), a major part of the projects involve construction, roads and the planned metro, estimated at around Dh26 billion.
“The increased spending will be supported by rising revenues. Abu Dhabi oil production rose to an average of 2.5 mbd in 2011, up from 2.2 mbd in 2009 and 2.34 mbd in 2010,” the report said.
Citing official data, the report showed that Abu Dhabi had earned a whopping Dh278bn from its hydrocarbon exports in 2010, up on Dh188.8bn in 2009. While no figures were available for 2011, the emirate’s income is expected to have grown sharply as oil prices soared by at least 50 per cent over their 2010 level.
“In general, the government’s fiscal position is likely to remain strong. The Abu Dhabi Investment Authority has an estimated $627bn in assets and the government boasts substantial reserves,” NCB said.
“Nonetheless, the recent Dh16.8bn bail-out of Aldar Properties highlights the risk still posed by contingent liabilities. The total debts of government-related entities in the UAE were recently estimated at 54% per cent of GDP.”
The report noted that although authorities in Abu Dhabi and other UAE emirates had begun to reverse some of the “largesse” in their fiscal plans for 2011, the onset of the Arab Spring led to a partial reversal. This led to a delay in the consolidation agenda to this year. It said the consolidated UAE budget is now estimated to require a fairly high break-even price of approximately $85/barrel.
Recalling the events in January 2012, the report mentioned that the Abu Dhabi Executive Council unveiled a plan marked by a great deal of continuity in government spending and general commitment to the strategic objectives of Abu Dhabi’s Vision 2030.
The NCB said that of the several projects put on hold last year, out of the estimated $30bn worth of projects, a number of them have now received a go-ahead.
The Abu Dhabi government also reiterated its commitment to certain key projects such as the Abu Dhabi metro venture and allocated funds to a new Dh25bn Midfield Terminal for the Abu Dhabi airport and the Khalifa Port and Industrial Zone.
The Dh10bn Mafraq- Ghuweifat Road project, originally conceived as a public-private partnership, was revived by the government.
The report said that the execution of the metro project should give a fillip to the plans for the development of the Reem Island, which is nearing completion with an expected occupancy of over 100,000 people.
“In general, the plans to build 50,000 homes over the coming 20 years appear to be on track. The government allocated funds to the North Wathba project which will have more than 13,000 resident plots, while the government hopes to deliver more than 7,600 villas this year. Beyond this, the Louvre, National Museum, and Guggenheim museum projects for Saadiyat Island were funded.”
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