SECRETARY OF TRANSPORTATION DISCUSSES REGIONAL TRENDS WITH

UNCLAS SECTION 01 OF 03 DUBAI 000249

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SUBJECT: SECRETARY OF TRANSPORTATION DISCUSSES REGIONAL TRENDS WITH
DUBAI OFFICIALS

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1. (SBU) Summary: A Department of Transportation delegation led
by Secretary of Transportation Mary Peters visited Dubai May 29
- June 1 to learn about the emirate's rapidly-expanding
transportation infrastructure, as well as how this
infrastructure will be integrated into the plans for regional
and international transportation networks. Secretary Peters met
with DP World executives to review the growing container
transport industry and the importance of transportation
infrastructure. The delegation also received a briefing on the
Dubai World Central development and its associated
transportation investments, including the new Al Maktoum
International Airport. Secretary Peters then discussed general
aviation trends in the region with senior aviation officials,
including Dubai Civil Aviation and Emirates Airlines President
Sheikh Ahmed bin Saeed al Maktoum, and toured the
nearly-completed massive Terminal Three at Dubai International
Airport. In meetings with representatives from Dubai's Road and
Transit Authority (RTA),the delegation learned about major
initiatives in Dubai's road and public transportation system and
how these improvements would set the standard for future
regional transportation projects. The delegation was accompanied
by Consul General and Pol/Econ Officer (notetaker). End Summary.



Growing International Trade and the Importance of Infrastructure

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2. (SBU) In a tour of the Jebel Ali Port, Secretary Peters
learned about the facility's evolution from a small strip of
desert into the seventh-largest container port in the world, and
the largest between Rotterdam and Singapore. DP World Senior
Commercial Vice President Michael Moore highlighted the effects
of globalization on the container shipping industry, noting that
the numbers of containers shipped worldwide is increasing
exponentially. Referring to the US, he warned, "You have a
tsunami of containers heading your way."




3. (SBU) Moore stressed the importance of infrastructure
investment and the necessity for the US to better-integrate its
transportation systems to handle this increased trade. If the US
cannot accommodate this cargo, he added, trade and its
associated economic benefits will divert to places that can.
Moore pointed to exclusive transportation links between Jebel
Ali Port and the cargo section of the new Al-Maktoum
International Airport (currently under construction - see para.
5) as a prime example.




4. (SBU) Showing a map of DP World's 42 worldwide port
facilities, with 13 more under construction, Moore pointed to
the conspicuous absence of the US, noting that DP World would
have liked to invest in American transportation infrastructure,
but that "capital will flow where it's wanted," referring to the
political storm over DP World's acquisition of six US terminals
in their acquisition of P&O. He noted with some regret that the
rest of the world, including important US allies, has welcomed
DP World investment. When asked about security, Moore replied
that DP World had consistently met and exceeded the highest
international security standards, including US government and
military security requirements - and in fact participates in a
number of key US port security programs at facilities like
Southampton in UK and Port Qasim in Pakistan. Moore said that
governments need to work with shippers and port facilities to
develop a security system that makes sense.



Dubai World Central: The Future Trade Nucleus of Dubai?

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5. (SBU) Secretary Peters also visited the headquarters of Dubai
World Central, the planned residential, commercial, and aviation
development currently under construction in the southwestern
section of Dubai. The 140 square kilometers will ultimately
consist of six separate developments: (1) Al-Maktoum
International Airport, a state of the art facility that may
eventually accommodate up to 160 million passengers annually, as
well as significantly increased cargo traffic; (2) Dubai

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Logistics City, a combination of light industrial plots, office
space, and residential housing; (3) Residential City,
apartment-style housing for up to 250,000 white collar and blue
collar employees, as well as commercial/retail space; (4)
Aviation City, a mix of industrial and commercial real estate,
an executive jet terminal, and dedicated space for aviation
maintenance, repair and overhaul (MRO),as well as exhibition
events; (5) Golf City, an exclusive development of villas,
apartments, and other luxurious compliments; and (6) Commercial
City, a high-end commercial and residential space featuring
high-rise office towers and apartments.




6. (SBU) Though technically distinct segments, Dubai World
Central will feature a dedicated internal transportation network
linking each individual development. This system, in turn, will
be fully-integrated into Dubai's broader RTA rail and bus
network. When finally completed, the Dubai World Central is
expected to employ 770,000 people and have the capacity to house
approximately 945,000.



An Emerging Aviation Hub, Growing Regional Air Travel

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7. (SBU) Sheikh Ahmed bin Saeed Al Maktoum, president of
Emirates Airlines and CEO of Dubai Aerospace Enterprises, hosted
Secretary Peters for a discussion about Dubai's aviation
industry. The Secretary thanked Sheikh Ahmed for Emirates
Airlines' purchase of Boeing aircraft and conveyed her pleasure
that the company had increased the number of US destinations,
adding that she hoped additional US airlines would add service
to Dubai. She also thanked Sheikh Ahmed for his participation
in the Open Skies Agreement and for his overall cooperation with
the FAA.




8. (SBU) Sheikh Ahmed emphasized the consistent double digit
growth in passenger and cargo traffic in Dubai and remarked that
Dubai was emerging as both a regional and international aviation
hub. He noted that in 2007, 34 million passengers passed
through Dubai International Airport (DBX). By 2011, this number
is expected to reach between 65-70 million. Asked whether this
growth was sustainable, Paul Griffiths, recently-appointed CEO
of Dubai Airports, responded with an enthusiastic yes. He
pointed to Dubai's geographic advantage, but also stressed
Dubai's proactive approach to expanding aviation-related
infrastructure. Whereas airport authorities in Europe and North
America were struggling to increase capacity, Dubai was adding
additional capacity today so that tomorrow's growth would not be
constrained. Griffiths later led the delegation on a tour of the
new DBX Terminal Three facility, which is expected to commence
operations in October 2008. The above-ground section of the
terminal is nearly as large as three Superdomes laid end to end,
and also includes a huge underground arrival/departure hall.




9. (SBU) Secretary Peters noted that many GCC countries were
anticipating major increases in aviation growth over the next
decade; Sheikh Ahmed acknowledged the challenge and said he is
taking a proactive approach to addressing these issues through
regional dialogue. Secretary Peters noted that technical
improvements, like state of the art air traffic control systems,
as well as modern airport design, would help to increase the
capacity for additional aircraft and save fuel by reducing
flight times.




10. (SBU) Secretary Peters inquired about Dubai's plan to launch
a discount airline (Note: Recently named as FlyDubai). Sheikh
Ahmed acknowledged the demand for low-cost travel from Dubai and
pointed to the former Soviet states as an example. The airline,
he said, is on track to buy but has not yet bought aircraft or
begun operations. Asked whether Emirates Airlines would
consider joining a global alliance, Sheikh Ahmed said the
question had been considered carefully, but the conclusion was
there is no advantage gained for Emirates to join such a
partnership at the present time.



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Integrating Dubai's Transportation System

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11. (SBU) Mattar Mohammed Al Tayer, Chairman and CEO of Roads &
Transport Authority (RTA),explained the vision for Dubai's
transportation system by reviewing key elements of the $22
billion in planned improvements, including the
addition/expansion of roadways, as well as enhancements to the
public transportation system. Al Tayer specifically stressed
the importance of public transportation in Dubai, noting that an
integrated network of light rail, subway, public buses, and
water taxis, along with pedestrian and bicycle trails, would
greatly improve the transportation options for residents and
reduce Dubai's infamous traffic. He also highlighted RTA's
concern for the environment, noting that Dubai's taxi and bus
fleets have initiated hybrid technology pilot projects, with the
aim of converting all of Dubai's 3500 RTA-owned taxis to hybrids
by 2012. (Note: Shortly after the delegation's departure from
Dubai, RTA began road testing 10 General Motors hybrid taxis.
End Note.) Safety, Al Tayer stressed, was a primary focus of
RTA's expansion and noted that Dubai needed to reduce the
relatively high number of fatal accidents.



Department of Transportation Delegation

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12.(U) The delegation consisted of:



Mary Peters, Secretary of Transportation; Quintin Kendall, Chief
of Staff; Husein Cumber, Deputy Chief of Staff; Mike Reynolds,
Acting A/S for Aviation and International Affairs; Brian
Turmail, Director of Public Affairs; David DeCarme, Deputy
Director, International Transport and Trade; and Brooke Evans,
Special Assistant to the Secretary.
SUTPHIN