Salik Announces Combined Valuation of Two New Toll Gates

Salik Company, Dubai’s exclusive toll gate operator, on Wednesday said that the combined valuation of the two new toll gates at Business Bay and Al Safa South, has been put around $747 million.

While the Business Bay Gate was valued at $620 million, the Al Safa South Gate was valued at $127.59 million, Salik in a regulatory filing with Dubai Financial Market (DFM) this morning. The new gates are expected to be operational by the end of November 2024.

These two gates – one at Business Bay Crossing on Al Khail Road and the second one at 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 additions aim to optimise traffic flow by redirecting vehicles to routes with higher capacity, thereby alleviating congestion. Dubai’s Roads and Transportation 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, Salik said.

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

Advancing Mobility Solutions

Salik Chairman Mattar Al Tayersaid that the launch of the two new gates highlight the commitment of both – Salik and RTA – to advancing sustainable mobility solutions and improving Dubai’s transport infrastructure.

He added: “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 optimizing travel time and reducing congestion on some of Dubai’s busiest routes.”

Salik CEO Ibrahim Sultan Al Haddad said that the progress they were making on their long-term objectives, in line with the company’s 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,” he added.

It is worth noting that the differences between the valuation by Salik and the valuation by RTA did not exceed the 5%.

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, in line with the concession agreement. This reflects Salik’s commitment to transparency and accuracy in financial and operational assessments, as well as the alignment of future visions between the two entities.

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 around $124.07 million, to be paid in two equal instalments of $62.05 million each, every six months, which will be provided from the company’s own financial resources.

Financial Impact

Salik expects to see an increase in annual revenue-generating trips with the operation of the two new gates supported by the positive macro-economic factors in Dubai.

Upon their operational launch which is expected to be by the end of November 2024, the new gates are expected to generate a revenue impact from the starting date till the end of the year 2024. In light of the new gates, revenue-generating trips are now expected to increase in the range of 7%-8% for 2024 versus previous guidance of 4%-6%, with a robust EBITDA margin of 67%-68%, versus previous guidance of 65%-66%.