SECRETARY OF TRANSPORTATION DISCUSSES REGIONAL TRENDS WITH

UNCLAS SECTION 01 OF 03 DUBAI 000249 SIPDIS NEA/ARP BAGWELL AND MASILKO SENSITIVE BUT UNCLASSIFIED E.O. 12958: N/A TAGS: ECON EINV ETRD ELTN BTIO PGOV SENV AE SUBJECT: SECRETARY OF TRANSPORTATION DISCUSSES REGIONAL TRENDS WITH DUBAI OFFICIALS DUBAI 00000249 001.2 OF 003 ¶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 -------------- ¶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? -------------- -------------- ¶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 DUBAI 00000249 002.2 OF 003 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 -------------- -------------- ¶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. DUBAI 00000249 003.2 OF 003 Integrating Dubai's Transportation System -------------- ¶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 -------------- 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