Al Gharbia encompasses the western part of the emirate of Abu Dhabi and, at 35,250 sq km (59% of Abu Dhabi emirate), is also larger than any other emirate in the UAE. The region is bound by a 350-km northern coastline, Saudi Arabia to the west and south, the Al Ain region to the east and the Abu Dhabi region to the north-east.
Much of Al Gharbia’s territory is desert, and it lies on the edge of the Arabian Peninsula’s so-called Empty Quarter (Rub Al Khali), the largest uninterrupted mass of sand in the world. The temperature in the region varies between average daily minimums and maximums of 12.4° C and 22.6° C, respectively, in January, and 29.6° C and 44.6° C in July, according to 2014 figures. Total rainfall peaked in March at 19.8 mm, while June to September saw no rain at all.
Demography & Key Settlements
Al Gharbia’s estimated population stood at approximately 313,500 as of mid-2014, according to figures from Statistics Centre – Abu Dhabi (SCAD), equivalent to 11.8% of the population of Abu Dhabi. Of the total, only around 29,550 are Emirati citizens.
The region, much of which is desert, is sparsely populated, with a density of 8.9 people per km, compared to a figure of 44.7 for the emirate as a whole. However, its population is growing rapidly, at a much faster rate than those of the Al Ain and Abu Dhabi regions, having almost tripled since 2005, when it stood at 108,600.
This growth is largely driven by immigration; the crude birth rate for citizens in the region in 2014 stood at 19.9 births per 1000 people, which was substantially below the emirate’s average of 31.6, and that of non-citizens at three, compared to 10.2 for Abu Dhabi as a whole.
The national population was made up of 17,800 males and 11,700 females, while the expatriate population consisted of 248,200 males and 35,800 females. Working-age adults dominate the population, with residents between the ages of 20 and 44 accounting for 75% of the total. Residents are concentrated in seven main settlements, namely Delma Island, Ghayathi, Liwa, Madinat Zayed (the largest city by population size and the regional administrative capital), Mirfa, industrial centre and key port Ruwais, and Sila.
Government & Administration
The Ruler’s Representative Court of the Western Region oversees and implements the vision for the development of Al Gharbia.
A range of bodies are responsible for administering the region within their own spheres, including the Abu Dhabi Department of Economic Development (ADDED) and the Abu Dhabi Housing Authority. However, several bodies play a broad role in the region’s development, including the Western Region Municipality, which was established in 2006 as a unit of the Abu Dhabi Department of Municipal Affairs and is responsible for providing municipal services, as well as playing a role in planning the region’s development, with particular responsibility for infrastructure projects.
Economic Overview
According to figures cited in the Plan Al Gharbia 2030, the region accounts for approximately 40% of Abu Dhabi’s GDP.
This would put the region’s economic output at around Dh381bn ($103.7bn) in 2014, based on the emirate’s total GDP of Dh952.7bn ($259.3bn), up from Dh243bn ($66.1bn) in 2010.
It should be borne in mind that the figure is likely to vary from year to year, and to have been lower than usual in 2014 due to the fall in international oil prices. Economic output is dominated by the region’s hydrocarbons industry, with Al Gharbia accounting for approximately 90% of the emirate’s oil reserves. In 2012 the now-defunct Western Region Development Council published a strategy document – entitled the Al Gharbia Investment Roadmap – which anticipates regional GDP rising to over Dh500bn ($136.1bn) and non-hydrocarbons GDP rising to Dh60bn ($16.3bn), up from Dh15bn ($4.1bn) in 2010.
Workforce
The government was the largest employer of citizens in the region in 2014, accounting for 69.3% of employment, while 85.2% of expatriate workers were employed in the private sector, according to figures from SCAD. The labour force participation rate stood at 97% for working-age males and 42.5% for working-age females. The figure stood at 52.3% and 92.1% for citizens and non-citizens, respectively.
Development Strategy
The government’s strategy for the development of the region is laid out in a master plan known as Plan Al Gharbia 2030, which was issued in 2008.
Priority sectors for development identified under the plan include energy (hydrocarbons and nuclear), desalination, petrochemicals, tourism and food production.
“The sectors have been identified based on the region’s competitive advantages,” said Mohammed Ibrahim Al Hosani, director at the ADDED. “There is a need for investment in other sectors as well, but these are the key industries that will play the main role in boosting regional GDP.”
As of late 2015 authorities were working on an updated version of the plan, which is due for release soon; in October 2015 the Abu Dhabi Urban Planning Council (UPC) told OBG that the technical work for the plan had been completed and that it was awaiting overall approval from the government. “The main changes will involve incorporating Etihad Rail into the plan and linking all the settlements to the new Al Mafraq-Ghweifat Road, as well as determining the function of each settlement in more detail,” Falah Al Ahbabi, director-general of the UPC, told OBG.
While the original plan provides roles for each of the region’s main towns, the council is planning to develop more detailed individual master plans for each of them. As of October 2015 it was working on one such master plan for Madinat Zayed, and intending to launch work on plans for the other settlements once the overall update of Plan Al Gharbia 2030 is approved.
In November 2015 the UPC also announced that it was launching a Capital Projects Plan for the Al Gharbia and Al Ain regions, which will collate data and map projects that are to be funded by the government under the plan; it is scheduled to be completed in early 2016.
Al Hosani said that government-backed companies such as Abu Dhabi-based investment and development company Mubadala Development Company and Abu Dhabi National Oil Company (ADNOC) play a major role in the development of the region under the strategy. “Government-backed firms are leading on investment and facilitating private sector investment,” he told OBG. “If private firms do not follow as planned, then these companies will ensure the region nonetheless receives the necessary investment.”
Oil & Gas Development
As noted above, Al Gharbia holds around 90% of Abu Dhabi’s oil reserves. Abu Dhabi’s oil reserves, in turn, represent around 90% of the UAE’s total reserves.
A number of major hydrocarbons development projects aimed at further bolstering the region’s output are currently under way or have recently been completed, including several projects to extract sour gas (that is, gas that contains high levels of other – often toxic or corrosive – compounds, typically sulphur) from local fields. These include a project to extract high-sulphur gas from the onshore Shah field, located near Liwa.
The $10bn development, which is not only one of the largest sour gas projects in the world but also deals with some of the highest levels of contaminants of any such project globally, came on-stream in January 2015 and reached full production capacity of 1bn cu feet per day in October.
Around half of its total output is usable, meeting around 10% of the UAE’s gas requirements. Gas from the project – which is being developed by a company called Al Hosn that is 60%-owned by ADNOC – is being used to power electricity and desalination plants as well as to provide feedstock for petrochemical facilities, while sulphur recovered from the gas, which also contains high levels of carbon dioxide, is being transported to Ruwais port via the first stage of the Etihad Rail project.
Another major sour gas development project had been proposed at the Bab field, near Madinat Zayed, with Shell initially said to be partnering with ADNOC at a cost of $10bn.
As with the Shah project, the original plan was for approximately half of the field’s total production of 1bn cu feet per day to be usable. The future of the Bab field project is now less than clear, however, with Shell having pulled out in January 2016.
Power Projects
Al Gharbia will also be home to the country’s first nuclear power plant. Four reactors are currently under construction at Barakah at a combined cost of approximately $20bn. The reactors, which are being built by a consortium led by South Korea’s KEPCO, are due to come on-line between 2017 and 2020.
Renewable and conventional power projects are also being developed; 2013 saw the commissioning of the 100-MW Shams 1 concentrated solar power plant near Madinat Zayed, one of the largest such projects in the world, and plans for two more such projects are under consideration.
Additionally, the Abu Dhabi Water and Electricity Authority and GDF Suez are in the process of building the gas-fired Mirfa Independent Power Project, a $1.5bn facility that will have an electricity generation capacity of 1600 MW and will also produce up to 52.5m gallons of desalinated water a day through the use of reverse osmosis technology. The latter project is due to come on-stream in 2016 and reach full capacity the following year. GDF Suez will operate it under a 25-year contract, in addition to holding a 20% ownership stake.
Downstream Oil & Gas
Downstream facilities are also seeing large-scale investment. November 2015 saw Abu Dhabi Oil Refining Company (Takreer) fully commission a major $10bn expansion project at its refinery in Ruwais, doubling the facility’s refining capacity to more than 800,000 barrels of oil per day.
Petrochemicals producer Borouge, a joint venture between ADNOC and Austrian firm Borealis, has also been investing heavily in its polyolefins facility in Ruwais, with plans to more than double production capacity from 2m tonnes per annum (tpa) to 4.5m tpa in 2016, through the completion of its Borouge 3 expansion project.
The development includes the construction of a 1.5m-tpa ethane plant to produce ethylene, which will feed a 960,000-tpa polypropylene plant, a 1.08m-tpa polyethylene plant and a 350,000-tpa low-density polyethylene plant.
Construction
Construction activity in the region appears to have slowed in 2015, with 83 new buildings completed in the first nine months of the year, compared to 308 in the same period of 2014, according to figures from SCAD.
The period saw the construction of 52 residential buildings, five fixed mixed-use residential and commercial buildings, 12 industrial buildings, 13 public facilities and one commercial building. The pipeline remains strong nonetheless, with 601 construction permits issued in the region in 2014, including 291 for new builds, following figures of 790 and 120, respectively, in 2013. Of the new buildings approved in 2014, 201 were residential.
Despite signs of a slowdown in the sector, industry figures say that the region holds promise. “There should be fairly rapid development in the Western Region, which will provide opportunities for contractors,” said David Stones, who has worked in Abu Dhabi for 25 years and is currently the contract manager for local construction firm ADMAC, citing projects such as road-widening schemes and nuclear power plant construction.
Housing construction also offers opportunities to firms in the sector, with authorities continuing to launch new master-planned communities for Emiratis and expatriates; most recently, in October 2015 the UPC announced that ground-breaking on the 410-villa Mirfa Beach Development would begin in the first half of 2017.
The development will be built by the Abu Dhabi General Services Company (Musanada) in coordination with the Abu Dhabi Housing Authority, and in line with the authorities’ Complete Sustainable Communities initiative, which aims to ensure that new developments in the emirate contain all necessary infrastructure and facilities for residents within the community itself.
Transport
The authorities’ strategy for the development of transport in Al Gharbia over the coming 20 years is laid out in the Al Gharbia Surface Transport Master Plan.
The plan seeks to develop transport infrastructure to support the aims of Plan Al Gharbia 2030, in line with principles laid out in the 2009 Abu Dhabi Surface Transport Master Plan. The Department of Transport in October 2015 told OBG that the plan was awaiting approval from the government and was due to be published soon.
Al Gharbia had 883.6 km of roads (not including urban streets) as of 2014, and a major road expansion project is under way in the region, in the form of a new motorway from Al Mafraq, near Abu Dhabi City, through Al Gharbia via Ruwais, Mirfa, Barakah and Sila, to Al Ghweifat on the Saudi border. In August 2015 Musanada said that construction work on the Dh5.3bn ($1.4bn) project, which is due to be finished in 2017, was 35% complete.
The highway will have between three and four lanes in each direction along its length, as well as a central space designed to accommodate the construction of two more lanes in each direction if necessary, as well as a number of interchanges.
Al Gharbia is also the setting for the 264-km first phase of the country’s Etihad Rail project, which transports granulated sulphur recovered from gas produced in the Shah gas field to Ruwais. The line was completed in 2013 and in December 2015 the federal government authorised Etihad Rail to begin full commercial operations on it, following the granting of requisite safety approvals. Two trains carrying 11,000 tonnes of sulphur each will run along the line daily; in December the firm said that the line had already transported 3m tonnes of the commodity during trial operations.
Tourism & Hospitality
There were 10 hotels operating in Al Gharbia in 2014, with a combined 939 rooms. Guest arrivals grew strongly in 2015, with the number rising by 68% to 131,955 in the first 10 months of the year on the same period of 2014, according to the Tourism and Culture Authority. Guest nights and revenue rose by a smaller 6% and 2%, respectively, and occupancy and revenue per room rates both fell slightly.
A number of hotel construction and expansion projects are in the pipeline, including plans for a five-star, 228-room 60-villa property called The Ruwais Jebel Dhnana Hotel.
Recently completed projects include a 10-villa expansion to the Qasr Al Sarab desert resort near Liwa, opened in 2014; the resort’s operator, Thai luxury hotels company Antara, also operates three facilities on Sir Bani Yas Island, opening the 30-villa Al Sahel Villa Resort there in 2013.
Another key operator in the region is the National Corporation for Tourism and Hotels, which manages three facilities in the region, namely the Tilal Liwa hotel, the Danat Jebel Dhanna resort and the Dhafra Beach hotel. In addition, Western Hotels, which is managed by Al Marina Hotel Management, operates two hotels in Al Gharbia.
Key attractions in the region include the desert and oasis towns and resorts as well as two islands, Sir Bani Yas and Delma. As of late 2014, more than 250,000 tourists had visited the nature reserve opened on Sir Bani Yas Island in 2008; the facility is home to over 13,000 animals, including cheetahs, gazelles and oryxes. In April 2015 Dubai-based tour operator Seawings began offering seaplane safaris to the island.
The authorities are working to upgrade transport infrastructure on the islands in order to further boost the development of the sector. The redeveloped Al Mirfa Port was opened in December 2015. The authorities are also working to upgrade Sir Bani Yas Island’s airport.
Festivals
The region’s attractiveness to visitors is further bolstered by a number of festivals, including a water sports festival in Mirfa and the Liwa Date Festival, the 11th edition of which took place in July 2015. The latter event attracts approximately 70,000 people annually.
Food & Agriculture
Al Gharbia is a significant contributor to Abu Dhabi’s farming sector, with the region’s 210,458 dunums (a dunum is roughly 0.1 ha) of plant holdings area accounting for 28% of Abu Dhabi’s total plant holdings in 2013, according to figures from SCAD.
Of the total, 82,409 dunums were devoted to fruit growing, more than any other category of holding. The region also hosted 3098 greenhouses, 35.1% of the emirate’s total. Output of dates – Abu Dhabi’s most important commercial crop – stood at 33,027 tonnes in 2014, representing 35% of the emirate’s total output. In addition, the region has traditionally been a centre for camel herding, particularly in the area around Liwa. The Abu Dhabi Food Control Authority reported that Al Gharbia was home to 98,550 camels in 2014.
Growing Contribution
The agriculture sector is set to grow in importance, in particular in the livestock and fisheries segments. Al Hosani told OBG that new regulations recently introduced for agricultural activities such as poultry farming – specifying minimum distances from housing and roads – have made it more difficult for companies to operate in smaller and more densely populated emirates such as Ras Al Khaimah and Dubai.
This is opening up opportunities for Al Gharbia, which is larger than any emirate outside of Abu Dhabi and has a low population density. “The change provides Al Gharbia with an important competitive advantage in the sector,” he said.
Aquaculture is also under development; in early 2014 local fish farming firm Asmak announced plans to build a 500,000-sq-metre land-based salmon, sea bream, barramundi and subaiti farm in the region, the first of its kind in the Gulf, at a cost of Dh100m ($27.2m), as well as a 250,000-sq-metre offshore cage farm on Delma Island. The facilities will have respective production capacities of around 4000 and 1000 tonnes per annum.
Outlook
Major investment projects that are now under way in Al Gharbia are set to further bolster the region’s economic and infrastructural importance to Abu Dhabi.
Oil and gas will continue to dominate the local economy, boosted by large-scale investment programmes within the sector. However, the government’s ongoing push to develop other industries – such as tourism, food and agriculture – as well as determined efforts to develop public-private partnerships and to boost the local small and medium-sized enterprise segment, mean that the region will also be contributing to the economic diversification of Abu Dhabi in the coming years.
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