Salik Announces Valuation of Two New Toll Gates in Dubai

Salik Announces Financial Valuation of Two New Toll Gates in Dubai

Salik Company PJSC ("Salik"), Dubai's exclusive toll gate operator, has announced the financial valuation of two new toll gates, strategically positioned at Business Bay and Al Safa South. The combined valuation of these two gates is AED 2,734 million (Two billion 734 million Dirhams), with the Business Bay Gate valued at AED 2,265 million (Two billion 265 million Dirhams) and the Al Safa South Gate valued at AED 469 million. These new additions are part of Salik's ongoing efforts to enhance Dubai’s road network and improve traffic management across the city.

New Toll Gates to be Operational by November 2024

The new toll gates at Business Bay Crossing on Al Khail Road and Al Safa South on Sheikh Zayed Road are expected to be operational by the end of November 2024. These gates, strategically located between Al Meydan Street and Umm Al Sheif Street, will increase Salik’s toll gate network from eight to ten. The primary aim is to optimize traffic flow by redirecting vehicles to routes with higher capacity, thereby reducing congestion in some of Dubai's busiest areas.

In alignment with its strategic goals for traffic management optimization, the Roads and Transport Authority (RTA) conducted extensive traffic impact studies to determine the most effective placement for these new gates. Under the Concession Agreement with RTA, Salik has the exclusive rights to construct, operate, and maintain these toll gates until the end of June 2071.

Commitment to Sustainable Mobility Solutions

Mattar Al Tayer, Chairman of the Board of Directors of Salik, emphasized the importance of these new toll gates in advancing sustainable mobility solutions and enhancing Dubai's transport infrastructure: "The launch of the two new gates highlights the commitment of both the Roads and Transportation Authority and Salik Company to sustainable growth and improving travel efficiency. The new gates will play a crucial role in optimizing travel time and reducing congestion on some of Dubai’s busiest routes."

Ibrahim Sultan Al Haddad, CEO of Salik, echoed this sentiment, stating, "We are thriving in the tolling business and remain focused on strengthening our core business offering as we expand our footprint within Dubai. These new gates align with our ambition to become a global leader in mobility solutions."

Financial Valuation and Payment Plan

Salik's Board of Directors approved the valuation of the two new gates at a combined total of AED 2,734 million. Notably, the difference between the valuation provided by Salik and the Roads and Transport Authority did not exceed 5%, demonstrating the transparency and accuracy of the financial assessments. As per the Concession Agreement, the average of the two valuations was adopted as the final value, underscoring the alignment of future visions between Salik and RTA.

Regarding the payment schedule for the gates' valuation, Salik and RTA have agreed on a repayment plan that will span six years, starting from the end of November 2024. The total amount will be repaid in annual instalments of AED 455.7 million, split into two equal payments of AED 227.9 million every six months. These payments will be covered by Salik's own financial resources.

Positive Financial Impact and Revenue Projections

Salik anticipates a significant increase in revenue-generating trips following the launch of the Business Bay and Al Safa South gates. Supported by Dubai's positive macro-economic conditions, these new gates are expected to generate additional revenue from their operational start date until the end of 2024.

With the operation of the new gates, revenue-generating trips are projected to increase by 7-8% for 2024, up from the previous guidance of 4-6%. Additionally, Salik forecasts a robust EBITDA margin of 67-68%, compared to the earlier estimate of 65-66%.

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