Thursday, June 28, 2007

Toll road 'shaikh down': Salik operators gouge commuters in Dubai

Dubai commuters angry over proposed toll road

June 28, 2007

Kuwait Times
Copyright 2007

DUBAI: Dubai commuters are alarmed over plans to slap a toll on the city-state's main thoroughfare, claiming there are no viable alternatives to the road and worried about creeping indirect taxation in the historically tax-free emirate. More than 8,000 people have signed an online petition urging the government to postpone a plan to impose a toll on Sheikh Zayed Road from July 1 until alternative routes and the new metro network are completed.

They also say the four-dirham ($1.08) levy is too high for a majority of workers, already facing rampant inflation, which hit 9.3 percent in 2006. "Salik ("clear way" in Arabic) will divide rich from poor. (It is) time to go back to my country," wrote Rova Veluz, one of the signers, who belongs to an expatriate community that represents more than 80 percent of Dubai's 1.3 million inhabitants. Tala Sabouni, citing another cumbersome financial burden, said "please don't implement Salik. We are already struggling with rent increases."

The cost of rental housing has more than doubled in the past two years. For an average low-middle income earner of around 5,000 dirhams ($1,360) a month, who commutes between the relatively cheaper northern emirate of Sharjah to Dubai's southern industrial zone, the toll road means an extra monthly expense of around 400 dirhams ($110). Salik, expected to generate annual revenues of 600 million dirhams ($163 million), could effectively wipe out workers' small savings or remittances to families in poor countries.

"It is a tax ... A money-raising scheme," said a Dubai-based economist who did not think that Salik would help effectively in reducing traffic, but would increase the financial burden on workers. "Increasingly you hear of cases of people becoming unwilling to come to Dubai" due to the increasing cost of living, she added, requesting anonymity. The government says the tollgates on the Garhoud Bridge over Dubai's Creek and at the southern end of the extremely busy 25-km stretch of road aim to reduce congestion.

Until a few years ago, this stretch of road, was considered an out-of-town highway. It is now a main street in the middle of the ever-growing city-state, flanked by hundreds of office and residential towers and hotels. "Dubai's road toll system will help reduce traffic by 25 per cent on the toll roads and encourage motorists to use alternative roads and public transport," Traffic and Roads Agency (RTA) chief Maitha Obaid bin Udai said in May. A 13-lane bridge over the creek was recently opened with a floating bridge being constructed further along to raise the number of crossing passages to five, while the Emirates Road bypass is being widened from six to 12 lanes.

Dubai is in the midst of a multibillion-dollar project to build a 70-km rail network, but that will not be operative before September 2009. And while there is a bus network, it is used only by workers who cannot afford a car and who are forced to endure extreme temperatures while waiting on the roads of the desert emirate. Moreover, most of the alternative routes proposed by RTA to ease congestion on the artery road are already crowded, with roads having to cope with more than a million registered cars.

Residents along adjacent narrower routes, like upmarket Jumeirah and Al-Wasl Road, have already voiced concerns about motorists jamming their tranquil neighborhoods to evade the toll. "The situation of the roads will be dreadful once more people start using Jumeirah road to escape the toll," resident Eshaq Al-Beloushi told Gulf News in May. Hence the petitioners' plea to defer the toll until all proposed alternative routes are ready and until an adequate network of public transport is built.

Even so, many believe the move's real aim is to tax people. "Charging people even during midnight ... shows that the government wants to print money rather than (improve) public welfare," said a signatory of the petition.

The economy of Dubai has been growing at an impressive double-digit rate since 2000, thriving in an environment free of corporate and personal income tax. But indirect taxation, like council taxes, is already in place, and sales or value-added tax is expected to be introduced in the near future. Mohsin Khan, International Monetary Fund director for the Middle East and Central Asia, said last month that "service-driven economies such as Dubai and Qatar will be the first (in the Gulf) to implement VAT, with Dubai already having made significant progress." - AFP

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