Salik to pay Dh2.73 billion to RTA for Dubai's two new toll-gates
Toll gates will open in Business Bay and Al Safa South
Dubai: The two new Salik tollgates in Dubai have been valued at Dh2.73 billion, with the company to pay back the sum to RTA over a six-year period.
The two new gates are in Business Bay and in Al Safa South on Sheikh Zayed Road, and are to open in November of this year. It will take Salik’s tally to 10 gates in the city. The addition of these two toll locations will significantly raise Salik's revenue - and profit - prospects during 2025 and beyond.
Both locations already have high density traffic operating through the better part of the week days, and at optimum levels over weekends too.
"The new gates will play a crucial role in optimizing travel time and reducing congestion on some of Dubai’s busiest routes," said Mattar Al Tayer, Chairman of Salik.
The tollgate in Business Bay is valued at Dh2.26 billion and Al Safa South at Dh469 million. Al Safa South will be linked with the existing Al Safa gate ('Al Safa North'), by which commuters will be charged only once if they pass through the two gates within one hour in the same direction.
The new gates will play a crucial role in optimizing travel time and reducing congestion on some of Dubai’s busiest routes
Salik has entered an agreement with RTA for the payment of the value, which will be done over a 6-year period. It will mean semi-annual payment of Dh227.9 million, starting November 2024.
"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," said Ibrahim Sultan Al Haddad, CEO. "We are thriving in the tolling business and remain focused on strengthening our core business offering as we expand our footprint within Dubai.”
Salik ups its revenue, earnings forecasts
From the date of opening in November, 'Revenue-generating trips are now expected to increase in the range of 7-8 per cent for 2024 versus previous guidance of 4-6 per cent, with a robust EBITDA margin of 67-68 per cent, versus previous guidance of 65-66 per cent', Salik said in a statement.
Payment to RTA
Under the terms of its incorporation, Salik needs to pay licensing fees to the RTA for operating the toll-gates in the city. The RTA has done traffic impact studies to ensure that the placement of the new gates 'aligns with its strategic goals for traffic management optimization'.
As per the concession agreement with RTA, Salik has the exclusive rights to construct, operate, and maintain the tollgates until end of June 2071.
On the valuation for the two tollgates, the differences between that computed by Salik and the one by RTA 'did not exceed 5 per cent'.
"Accordingly, and as per the terms of the concession agreement the average of the two valuations was adopted as the final value for the two new gates," said the statement. "This reflects our commitment to transparency and accuracy in financial and operational assessments, as well as the alignment of future visions between Salik and the RTA."
We are thriving in the tolling business and remain focused on strengthening our core business offering as we expand our footprint within Dubai