Salik, the exclusive operator of toll gates in Dubai, announced yesterday the total valuation of the two new toll gates at Business Bay Crossing and South Safa, with the total valuation of the two gates amounting to AED 2.734 billion, of which AED 2.265 billion for the Business Bay Crossing gate and AED 469 million for the South Safa gate.
The company said in a statement that the two new gates, which are expected to start operating by late November 2024, are located at the Business Bay crossing on Al Khail Road, and Al Safa South on Sheikh Zayed Road, specifically in the area between Al Meydan Street and Umm Al Sheif Street, thus increasing the number of Salik gates in Dubai from eight to 10 gates.
The two new gates aim to improve traffic flow by redirecting vehicles to wider alternative roads, which will help reduce congestion.
The Roads and Transport Authority in Dubai conducted detailed studies on the traffic impact to ensure that the location of the two gates is in line with its strategic objectives to improve traffic management.
According to the concession agreement signed with the Authority, Salik has the exclusive rights to build, operate and maintain existing or new toll gates, until the end of June 2071.
“The two new gates are strategic investments that underscore the RTA and Salik’s unwavering commitment to developing sustainable mobility solutions and improving Dubai’s transport infrastructure,” said Mattar Al Tayer, Chairman of Salik. “This investment also highlights the drive towards promoting sustainable growth and providing smoother mobility across Dubai by improving mobility efficiency and reducing traffic congestion.”
He stressed that the company is moving forward with its growth strategy to become a global leader in providing sustainable and smart transportation solutions, noting that the new gates will contribute to improving travel time and reducing traffic congestion on some of the busiest roads in Dubai.
In turn, the CEO of Salik, Ibrahim Sultan Al Haddad, said: “We are very pleased with the progress we are making towards our long-term goals, in line with our ambition to occupy a leading global position in providing mobility solutions.”
He added that the Board of Directors of Salik approved the evaluation value of the two new gates based on the results of the financial evaluation, noting that the differences between the evaluation of Salik and the evaluation of the Roads and Transport Authority did not exceed 5%.
Al Haddad added that according to the terms of the concession agreement, the average of the two assessments was adopted as the final value for the two new gates, in line with what was stipulated in the concession agreement. He said: “This reflects our commitment to transparency and accuracy in financial and operational assessments, in addition to the convergence of the future vision between Salik and the Roads and Transport Authority.”
He explained that with regard to the structure of the assessment payments, an agreement was reached with the Roads and Transport Authority on a plan to pay the total assessment amount for the two new gates over a period of six years, starting from the end of November 2024, where the annual installment will amount to AED 455.7 million, to be paid in two equal installments every six months, with a value of AED 227.85 million for each installment, which will be provided from the company’s own financial resources.
Expected financial impact
Salik expects to see a significant increase in the number of annual revenue-generating trips with the opening of the Business Bay and South Safa gates. With their expected operational launch in late November 2024, the two new gates are expected to have a revenue impact from the start of operations until the end of this year, with revenue-generating trips expected to increase by 7-8% in 2024, versus the previous estimate of 4-6%, with a strong EBITDA margin of 67-68%, versus the previous estimate of 65-66%.
• The two new gates increase the number of Salik gates in Dubai from 8 to 10 gates.
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