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Home Sector Logistics Dubai’s new Salik gates to become operational from November 24

Dubai’s new Salik gates to become operational from November 24

The new gates will expand Salik’s toll gate network in Dubai from eight to 10
Dubai’s new Salik gates to become operational from November 24
The combined valuation of the two new toll gates stands at a total of AED2,734 million

The two new Salik gates in Dubai – the Business Bay Gate and Al Safa South Gate – will go live starting Sunday, November 24, the company said on Friday.

It was on August 28 that Salik Company announced that the new gates would be operational by the end of November.

The new Salik gates

The new gates, at Business Bay Crossing on Al Khail Road and Al Safa South on Sheikh Zayed Road, positioned between Al Meydan Street and Umm Al Sheif Street, will expand Salik’s toll gate network in Dubai from eight to 10.

These gates will optimize traffic flow by redirecting vehicles to routes with higher capacity, thereby alleviating congestion.

As per a concession agreement with the RTA, Salik has the exclusive rights to construct, operate, and maintain the toll gates until end of June 2071.

Valuation of the gates

The combined valuation of the two new toll gates stands at a total of AED2,734 million, with the Business Bay Gate valued at AED2,265 million and the Al Safa South Gate valued at AED469 million.

“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,” said Mattar Al Tayer, chairman of the board of directors of Salik.

Revenue generation

Salik expects to see an increase in annual revenue-generating trips with the operation of the new toll gates. Revenue-generating trips are now likely to increase in the range of 7-8 percent for 2024 versus previous guidance of 4-6 percent, with a robust EBITDA margin of 67-68 percent, versus previous guidance of 65-66 percent.

Regarding the payment schedule for the gate’s valuation, an agreement has been reached with the RTA on a repayment plan for the total valuation amount for the two new gates over a period of six years starting from the end of November 2024.

The annual instalment will be AED455.7 million, to be paid in two equal instalments of AED227.9 million each, every six months, which will be provided from the company’s own financial resources.

Strong H1 results

Salik generated a net profit after tax of AED544.8 million in H1 2024.

The company registered 238.5 million revenue-generating trips, which increased by 4.9 percent YoY to record total revenue of AED1.1 billion. Revenue from toll usage, comprising 87.1 percent of total revenue, rose by 4.9 percent YoY to AED953.8 million. During the first half of 2024, Salik reported EBITDA (earnings before interest, tax, depreciation, and amortization) of AED738.4 million, up 6.5 percent year-on-year, and profit before tax of AED598.6 million, up 9.2 percent year-on-year. In view of the strong financial results, the company’s board of directors approved an interim dividend distribution of AED544.8 million, equivalent to 7.263 fils per share, payable on September 5, 2024.

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