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	United Arab Emirates		Info-Prod Country Guide
CHARACTERISTICS   INDICATORS   THE ECONOMY   INVESTMENT ISSUES   PROJECTS   PROSPECTS

Current and Projected Projects General The Dubai strategic plan has earmarked US$ 9 billion to be invested in the Jebel Ali free zone over the coming five years. Development projects which are already underway include the construction of a US$ 200 million unit for the Jebel Ali topping plant now being planned by the Dubai-based Emirates National Oil Company (ENOC) and the possible US$ 400 million expansion of the Ruwais Fertilizer Company (Fertil) plant in Abu Dhabi. Southern Petrochemical Industries Corporation of India has already received approval to construct the US$ 165 million Jebel Ali fertilizer plant, which produces urea and ammonia. Other plants currently being considered for massive expansion include the Taweelah A and Jebel Ali D power stations and the Al-Awir sewage treatment plant. Additional major projects include the establishment of the 400-kilometer link from the Taweelah power complex to Abu Dhabi island, a ship repair and construction yard for Abu Dhabi Ship Building and a new Abu Dhabi naval base. Other projects include the US$ 530 million expansion of Dubai Airport, a US$ 500 million expansion of Abu Dhabi and Al-Ain airports, the building of a number of new hotels, including a new 280-room Hyatt between Umm al-Nar and Shahama and a 416-room Park Plaza hotel near the Dubai World Trade Center, as well as two office towers in Dubai of 305 and 350 meters respectively and a new Sharjah world trade center, which will include a 320-meter tower and a 20,000 square-meter exhibition hall. Hospitals and housing projects are also being planned and should be open for tender during 1997. 1998 is likely to see the beginning of consultancy work on a project to expand the capacity of the Mirfa power and desalination operations. The General Projects Committee (GPC) is currently discussing what form the expansion should take. One option is to install back pressure turbines at the A station to produce additional power and desalination output. An alternative is to go for a much larger development of 400 to 500 MW of power and forty to fifty million gallons a day (g/d) of desalinated water. The government has said it plans to invest up to US$ 300 million in the recently-formed Saadiyat Free Zone, including the construction of a six-kilometer bridge to the mainland. Build Operate Transfer One of the first BOT projects in the water treatment sector is the Ajman wastewater project. Concessionaires are Black & Veatch US International. and the Abu Dhabi-based KEO International Consultants. One hundred million dollars will be invested in the first phase of development and the overall project is expected to require an investment of US$ 600 million. The concession will extend for twenty-five years, and the operators are expected to recover their outlay through house connection charges as well as through the treatment of waste water. Another waste water treatment plant to be built on a BOT basis will be located in Salalah. The British partner of this British/Omani joint venture is North West Water International, a subsidiary of the North West Water Group. According to the terms of the award, the operating company will be responsible for building the city's wastewater transportation system as well as for operating a sewage plant, currently being built by ABB USA. The concession is to extend for thirty years and will include responsibilities for billing and collection of water connection fees. Other income is to be secured through the sale of treated effluent back to the municipality and the sale of water to other interested buyers. Franchising Currently, franchises are operating in the fast foods industry; dine-in restaurants and clubs; auto leasing; apparel; soft drink bottling; beauty products; hotels; toys; photography; jewelry; vending machines; dry cleaning; furniture; hardware; natural health products; publica; and sporting goods. The largest segment is the fast food franchise group which is highly sought after by local companies. Most of the major US fast food companies are already established in the market. The industry, however, is currently going through a major restructuring with several major franchises being sold to new owners. These changes are seen as a positive change from weaker to stronger management, and not as a reflection of weakness in the market. There remains considerable potential for franchises of all kinds. There is no special legislation for franchises in the UAE. General contract and commercial law apply to franchise agreements. UAE law mandates that only UAE citizens or corporations wholly owned by UAE citizens are allowed to conduct retail operations, the most common type of franchise. Foreign businesses must work through a local partner as licensee or enter into a joint venture. Franchisees usually prefer to own 100 percent of the franchise themselves. In other cases, the franchisee enters into a joint venture with the franchiser to operate all outlets as company-owned stores employing local managers. As with other types of business operations in the UAE, the selection of the local partner is critical. One common practice used by franchisers in the past that has, in many cases, caused considerable problems and significant lost sales is the selection of a master distributor to cover the entire Gulf through the use of sub-distributors in each country. Each market is different and requires qualified local partners to exploit its opportunities. Previous Chapter Contents Menu Next Chapter

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