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Dubai Authorities Contradict Power, Water Shortage Stories

by Lorys Charalambous, Tax-News.com, Cyprus

09 August 2007

Dubai Electricity and Water Authority (DEWA) has hit back at claims that it is unable to keep up with demand for power and water during the city-state's real-estate boom, which is expected to see $300bn of property investment in new projects during the next ten years.

Local blogs are full of stories that DEWA is behind schedule with infrastructure, causing delays to projects, and there are anecdotal reports of power and water cuts during peak periods.

A spokesperson at DEWA said the claims were just speculation by developers. "DEWA has so far been able to provide power for all the years that Dubai has been under development proving it can meet the challenges," the spokesperson added.

The UAE is planning to invest US$61.2 billion in additional power and water capacity by 2011, boosting supply by around 60% from the 2006 level of 14.8 Gigawatts. DEWA is building a 9,000 MW power and desalination station near the border with Abu Dhabi, and adding a further 5,000 MW to its existing Al Habab power facility by 2017. Upgraded power plants at free zone Jebel Ali will add a further 400 MW.

DEWA says that power and water demands in the Emirate are rising at annual rates of 20% and 15%. The population of Dubai is expected to grow by more than 30% to 2m people by 2010, and these are not low-consuming 'guest workers', they are business workers demanding air-conditioned apartments, offices and play-spaces.

It has to be said that no country has done more to support business and property development that Dubai, whose leaders have single-mindedly set out to create a world-class business and financial hub in the desert, unfettered by financial or administrative constraints.

Most developers agree that DEWA is doing everything it can, but has been overcome by the completely unexpected level of demand, so successful has been the Emirate's development plan.

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