Dubai Considers New Salik Gates to Manage Growing Traffic Flow
The Salik toll system in Dubai is considering adding more toll gates as part of the city's effort to improve traffic flow. As the city's population grows, the current eight Salik gates will become increasingly important in directing traffic.
Dubai Salik toll gates may see expansion for traffic management
When discussing traffic flow, Salik Company CEO Ibrahim Al Haddad brought up the necessity for more toll booths. The Roads and Transport Authority (RTA) in Dubai, with input from the Dubai Executive Council, makes the final call on whether or not to install new gates.
Toll gates play a major role in managing the city's traffic
Salik toll gates were introduced in Dubai back in 2007, serving a dual purpose of traffic management and generating revenue for the government. These gates are strategically positioned across the city, with Sheikh Zayed Road being a major corridor that features several of them. In the first half of the current year, these toll gates recorded a total of 293 million trips, reflecting a notable 9.8% increase compared to the same period in 2022. Each trip through a Salik toll gate costs four dirhams.
Strong performance and IPO success
The Salik Company witnessed considerable success in the past year, including the launch of its initial public offering (IPO). The IPO garnered substantial interest from investors, raising nearly Dh3.7 billion (approximately $1 billion), with total subscriptions reaching Dh184.2 billion (around $50.2 billion).
The demand for Salik equities has increased dramatically, making them among of the most actively traded on the Dubai Financial Market. On Tuesday, the stock was trading at Dh3.16, up nearly 60% from its initial public offering price of Dh2.
Traffic growth prompts revised forecasts
Moreover, in Q2 2023, Salik reported the greatest quarterly toll usage revenue since the beginning of its operations, totaling Dh455 million, an increase of 13.8% year-on-year.
More traffic management measures have become necessary as a result of Dubai's continuing population increase, increasing numbers of visitors, and rising volume of commuters moving through the city.
As Salik is looking into new ways to grow beyond its current toll gates, and one possibility is incorporating digital and physical advertising into the gates themselves.
Furthermore, Salik is focusing on sustainability initiatives, such as exempting electric vehicles from tag prices and adopting a paperless strategy. The company has already installed solar panels on the Jebel Ali Gates, supplying 15% of the energy required, with plans to extend this eco-friendly initiative to other existing gates and any potential future gates. These initiatives align with Salik's broader environmental, social, and governance (ESG) strategy to promote sustainable and responsible practices.
In sum, the Salik toll system is positioned for potential expansion as it continues to manage the growing traffic in Dubai while also making strides in sustainability and financial success.