Salik, Dubai’s exclusive toll gate operator, has valued the two new toll gates at Business Bay and Al Safa South at AED2,734 million ($744.4 million) and has revised its full-year revenue guidance for 2024 upwards because of its financial impact.
The Business Bay Gate, positioned on Al Khail Road, has been valued at AED2,265 million ($616.7 million). The Al Safa South Gate, between Al Meydan Street and Umm Al Sheif Street, is valued at AED469 million ($127.7 million). Both gates are expected to be operational by the end of November 2024.
The gates will expand Salik’s toll gate network in Dubai from eight to 10 and are expected to ease traffic flow by redirecting vehicles to routes with higher capacity. Roads and Transport Authority (RTA) has conducted detailed traffic impact studies to ensure that the placement of each gate aligns with its strategic goals for traffic management optimisation.
Financial impact
Salik expects to see an increase in annual revenue-generating trips with the operation of the gates, supported by the positive macroeconomic factors in Dubai. Upon their operational launch in November this year, the gates are expected to generate a revenue impact from day one until the end of the year.
Revenue-generating trips are expected to increase in the range of 7-8 percent for 2024 versus previous guidance of 4-6 percent, with an EBITDA margin of 67-68 percent, as against the previous guidance of 65-66 percent.
Mattar Al Tayer, Chairman of the Board of Directors of Salik, commented: “The launch of the two new gates highlights the commitment of both the Roads and Transportation Authority and Salik Company to advancing sustainable mobility solutions and improving Dubai’s transport infrastructure.
“These strategic investments underscore our dedication to sustainable growth and providing more seamless mobility across Dubai by enhancing travel efficiency and reducing traffic congestion. The new gates will play a crucial role in optimising travel time and reducing congestion on some of Dubai’s busiest routes.”
Salik’s exclusive rights
Salik has the exclusive rights to construct, operate, and maintain the toll gates until the end of June 2071, following the Concession Agreement with RTA.
Salik’s Board approved the valuation of the two new gates and the difference between the valuation by Salik and the valuation by the RTA, did not exceed the allowed 5 percent margin.
An agreement has been reached between Salik and the RTA regarding the payment schedule for the gate’s valuation. Repayment plan is over six years starting November 2024. Annual instalment has been fixed AED455.7 million ($124.1 million), to be paid equally every six months. This will be provided from the company’s own financial resources.
Ibrahim Sultan Al Haddad, CEO of Salik, commented: “We are extremely pleased with the progress we are making on our long-term objectives, in line with our ambition to become a global leader in mobility solutions. We are thriving in the tolling business and remain focused on strengthening our core business offering as we expand our footprint within Dubai.”
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