Khalifa Industrial Zone Abu Dhabi. Kizad Project that will become part of the largest industrial zone in the world has many

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1 Khalifa Industrial Zone Abu Dhabi Kizad Project that will become part of the largest industrial zone in the world has many competitive advantages over other free trade industrial zones that are part of economic vision promoted by the government of Abu Dhabi till The estimated costs of the project in $7,2 billion range only A s first phase present enormous opportunities for future growth of Abu Dhabi economy. The most prominent object in construction of the KIZAD zone is Khalifa port that has access to the water which would provide the supply of raw materials for the facilities operating in this area. The location of KIZAD and Port is in the middle of the area of two largest emirates Abu Dhabi and Dubai. The completion of the project is estimated by 2030 as part of Economic Plan accepted by the Urban Government of Abu Dhabi. The precise location of KIZAD is 60 km from Abu Dhabi and 85 from Dubai, 45 km from Jafza the central mega policies in United Arab Emirates. The project would be spread into five phases that hopefully would be completed on time, depending on the market conditions. The total area of zone A (51 sq. km) and B would be 420 square kilometers which exceeds the area of Abu Dhabi by four times and 2/3 of the Singapore area. The transportation network is highly relevant in supply of materials for the facilities operated by foreign tenants and includes transportation hub connected by the road which is the prolongation of Sheick Zayed highway, railway branch that will be extended by the terminals of the island by the end of 2016 year air support as Abu Dhabi International airport which is 30 km from the zone, Dubai Central Al Maktoum Airport 50 km from the zone, Dubai International 85 km from the zone and Al Ain International airport 170 km from the zone. Such highly developed infrastructures make the region highly secured and less dependable on the transportation network because various methods of cargo delivery could be used. In addition to 4 methods of transportation, it would have support from the sea as a Khalifa Port that

2 was opened in the middle of December 2012 with the container terminals. The business activity of the area would generate job positions supported by highly qualified local specialists working on highly technological equipment facilitated by development of skills for the whole population that would improve the conditions of life for residents (Oxford Business Group, 2010). Due to large size of the project the completion stages are split by phases. For Khalifa Port, the phase 1 consists of an operation terminal that can process 2,5 million TEU containers on a yearly basis altogether with 12 million tons of bulky raw materials supplied to the tenants facilities. The capacity of the Port would overreach the capacity of Mina Zayed sea port that was able to process of containers which is 4 times less than present Khalifa Port. By 2030, the prognosis is the plan to reach 15 million TEU containers along with 35 mln tons of raw materials. While the whole project is still under construction, their operating areas already occupied by anchor tenants of KIZAD which include Emirates Aluminum (EMAL) that already operates in the zone since 2009 providing the aluminum world industry with the biggest smelter. The EMAL berth being process the original first cargo in 2010 being able to handle the overall tonnage of 4 million tons on the annual basis what made it possible for EMAL to process the delivery of 1,65 m tons of raw cargo for the smelter (Halcrow, 2008). The key points of Khalifa Port that provides successful operation for the region are delivery of Zone A ready for primary operations by the tenants that already invested financial resources in the assets constructed in the KIZAD zone and would be ready to start production of ready for consumption products by the end of Since a lot of leased spaces was allocated to investors, (December %) the arise demand for zone B that is still under construction has drastically arisen.

3 KIZAD zone A, which covers 51 square kilometers, consists of EMAL investor there are different industries that would be a main goal for operations in this area constructed to increase the effectiveness of operations and minimize the costs. The potential industries for operation are aluminum, steel, chemicals, petrochemicals, pharmaceuticals, healthcare equipment, paper, printing and packaging, food, trade and logistics, engineered metal products (Khalifa Port and Kizad factsheets). Zone B would be mostly proficient in manufacturing of lighting products, high technological commodities and light industry products. The key point of Zone A and B operation would be clustering of activities and their allocation by groups to make the process more efficient increasing transportation and overall production costs. Introduction of hot metal roads would allow the manufactured products to be transported directly in the container. The commodities of Khalifa Port would include bulk liquids (different types of oil) altogether with dry bulk (aluminum, concrete products and agricultural ones). The world tour of Chief Leaders of KIZAD project visits to Xiamen Commodities Exhibition and Messe Frankfurt Industrial Exhibition attracted the high interest of investors and manufacturers of industrial commodities to KIZAD area for the main factor of 100% flexibility rate to orient the tenant for high level of customer satisfaction that would provide a modification of any process to meet the customer s demand. In 2011, the authorities of Abu Dhabi have celebrated a year construction of KIZAD Khalifa Industrial Zone of Abu Dhabi and seem to be optimistic about the future of the whole region that contains such immense industrial zone that already became world largest industrial region. The readiness of completion in 2010 was at 30% while, at the end of 2011, it was already 67%. The industrial infrastructure zone occupies the range of 50 square kilometers and industrial area was already leased till 2011 by 1,17 square kilometers hiring 60 employees for operation incurring

4 unusual demand for lease due to profitable economic location of the region. Participation of KIZAD in the international road shows opened an opportunity for clients to know the essence of this region. The result was a number of delegations, foreign investors who came to the region showing the interest at leasing of space in KIZAD (Halcrow, 2008). The essential role of this region integrated in development of Abu Dhabi Economic vision by 2030 that will lessen the dependency of the economy on natural resources. The first customer of KIZAD occupies the area of square meters along with Talex Company that was established in aluminum cluster, which is a part of Emirates Aluminum. The state ownership of Aluminum cluster by the government, which has 50% share in the business, secures the economic activity for the clients coming to this region. The role of the Talex extrusion aluminum manufacturing facility would be the products for the automotive industry molded from light weight and durable aluminum. The further plan of Talex would be additional lease of space for construction of hot metal road that will enable aluminum to be directly supplied to the manufacturer who would process the metal into ready for consumption products. Except aluminum manufacturer, KIZAD has signed contracts with glass producers and suppliers of green technology. The investment into Industrial zone would be $5 billion to prepare the facilities for launch (Oxford Business Group, 2010). The rapid relocation in KIZAD area for the tenants was the foundation of free zone that will allow 100% ownership for the foreigners accompanied by the absence of re-export and import duties. The successful operation of KIZAD zone brought a reward for high satisfaction among consumers and was rated at 72% satisfaction rate. The fostering of marketing activity targeted the KIZAD zone to clients in India and China mainly focusing on the Asian region. In addition to that, the purpose of signed Memoranda of Understanding was financing the projects in the regions through loans to the tenants on behalf of world s leading banks such as HSBC, CitiBank,

5 Bank of Baroda and Commercial Bank of China (ICBC). The operating objectives of Industrial zone consist of gaining tenants; work on the clear and understandable procedures in the operation process, correspondence with utility providers supported by the coordination with agent representatives, supply of housing for labor force and construction of accommodation facilities for the locals that are part of trainee and development program (Port Finance International, 2010). The project overview in a construction zone would include the completion of Phase 1 which was long awaited event of , highlighting the results of 2011 as the most prominent ones in the industry. The GO-Live program consisted of installation of first crane that is a part of port infrastructure (Halcrow, 2008). The rapid progress of the KIZAD project was fostered for the cause of 100 steps plan which helped to complete Khalifa Port by 93%, which was added by 20% push during the summer of 2012, all equipment was tested in October with its system called Radio Frequency Identification Devices (RFID) to make sure no accidents occur on site due to bulky trucks and equipment used. June was highlighted for launch of Terminal Operations Building (TOB) providing 5200 square meters for the port operations and space for administrative purposes. This includes reception, infrastructure for first aid, data block and cafeteria along with hall for accepting official delegations and hosting conferences on the international level (Halcrow, 2008). The most significant completion for 2012 was the power supply operation unit that could coordinate distribution of electrical power. Three 33KV substations able to give out energy power to the port gate. The launch of this part of the industrial zone was at the beginning of 2012.

6 The biggest asset in Khalifa Port equipment is the family of cranes. For the construction Company, that was processing the order for cranes in Abu Dhabi, the time was ticking unusually fast because highly demandable government of Abu Dhabi was aiming to complete the project of KIZAD as fast as possible. The six shore to ship cranes were ordered from ZPMS Company along with 20 Terex-Noell carriers from China, another big order for 30 cranes from Finish Crane Corporation consisted of automated stacking cranes (ASC). The high 1200 ton capacity crane arrived at Khalifa port at the beginning of The rest of the cranes came a year later; meanwhile the ADPC set up ladders and grounding platforms with cable inserts having a supply of electricity of 11KV consuming 8 hours in labor time cost for crane erection. The launch of first crane into work occurred in October 2011 while everybody anticipated this event with worrisome attitude (Halcrow, 2008). The total amount of cranes 50 pieces (30 ASC and 20 straddle carriers) seem impossible to launch in operation but with the confident work of suppliers, shareholders and operator of container terminal the work became visible when all of them were launched in operation. The problem during the work with cranes was technical, production and transportation challenges that collected the parts for the cranes from Montenegro, India, Poland and other countries. The bulky problem was with cranes manufactured in China that should be delivered by sea and ready to be assembled on site at Khalifa Port (Port Finance International, 2010). The dimension of ZPMC cranes ranged from 65 meters in outreach to a height of 44 meters under the spreader (ADPC, Annual Review). Fortunately the world record by ADPC was set through installation of these cranes during 2011 and The regular term for installation of these cranes would be 18 months, but the coordinated team completed the task in 11 months. The GO-Live program was aimed at testing the delivery of work by ADPC a transition from the processing of crane erection to operations. The inspiration by ADPC to the

7 team of workers at Khalifa Port who faced challenges of high pressure from authorities were overcame in a timely manner launching the Port into operation from September first, 2012 (ADPC, Annual Review 2012). The collaboration of all teams involved in construction of KIZAD project including the managers of terminal along with Customs, Food and Control Authorities, Ministry of Environment and Abu Dhabi Police made this project a success testing the integrated equipment to make sure the project runs smoothly. The connections of road arteries of Industrial Zone with onshore port complex with Khalifa Port Interchange were the key performance factors for the cranes operations launch (Port Finance International, 2010). Along with existing roads, the secondary (66 km) roads network was developed. The 2011 snap shot showed that all the works are on time having an 86% completion by the end of the year including most valuable Data and Control Centers in coordination with completion of concrete columns for 18 principal buildings in KIZAD. The most critical path was laid in the contract number that included construction of bridges, drains and progress in road works that would be tested for high performance and compliance with safety and environmental standards. In addition to that support and launch in operation of 33KV and 11KV substation between the key D3 and D5 interchanges was main performance point for the overall contract. The key issue in this part of the work was a connection of two substations to power outlets so the supply of electricity would be enabled between ADPC and ADDC. This task was completed allowing the project to stay ahead of schedule completion. For Khalifa Port, the biggest project was visible when the crane handling equipment, set by the contractor, launched the straddle carriers and ASC cranes in operation in Terminal Operation System (ADPC, Annual Review). For the whole project team, it was particularly obvious that it will be delivered on time within the allocated budget what was promised was delivered (Halcrow, 2008).

8 While the construction of such gigantic projects requires enormous efforts, the management of ADPC had concern and influence on the environment. Kizad fully admits the correspondence with healthy safety and most respected environmental standards that meet the requirements for environmental protection in the industrial zone becoming the main purpose. What helps to fulfill this purpose is use of the management system that will identify the potential hazards to the environment, protecting the sea from the possible commodities spills or accidents that might cause the change in the circles of nature operations. Establishment of environment performance that coincide with goals and objectives of KIZAD project would establish the reachable targets not to influence the environment in any sense. The continuous reporting procedures would allow the public organization to monitor the emission of harmful substances such as chemical gases in the atmosphere (Port Finance International, 2010). The optimization of natural resources with laws established by the environment protection organization that demands the use of professional equipment to minimize and reduce the emissions, utilize the technology, especially reduce energy consumption, waste and recycling commodities in compliance with world environmental standards along with sophisticated management of water resources exploitation. The policy guarantees the use of less hazardous chemicals than improving the current standards by the use of integration of modern equipment for processing of hazardous raw materials. The side effect to consider during construction of Khalifa Port and Kizad is damage of environment highlighted in the operations of both. For the purpose of Environment protection, the budget of $240 million was spent on construction of environmental breakwater shed at Khalifa Port with the purpose to secure the coral reef in the UAE including Arabian Gulf. The fauna that benefits from such action is corals, sea turtles, sea snakes, clownfish and dolphins protecting the benefits of nature. The breakwater shed helps to prevent the waves from the

9 destructive influence, contamination of the water and changes in the water temperature(port Finance International, 2010). The inspection services conducted by employees of KIZAD Sam Purki and Bernie Riegl from Florida Coral Institute monitor the activity of corals every three months to make sure they stay in healthy condition. The result of monitor is the conclusion that break water protects the reefs without making any threat to the existence. The main focus of the developed monitoring program is constant measurements of darkness of the water that are being observed by 14 professional stations in the project area. Daily mobile and synoptic observances of turbidity around all areas, which has activities directly related to construction of the project, secured the local flora and fauna. The inspections by the Florida specialists are held on the weekly bases. Most important for this region is the installation of equipment that processes the activities of waves, current and tide fluctuations because waves have a disastrous effect on the constructed area. Altogether with Florida Specialists Netherland Hydronamic Company conducts monitoring facilities in KIZAD area, in cooperation with consultants specialized in dredging works that become extensively popular over the world. In cooperation with Archirodon and Hyundai corporations, Boskalis survey and laboratories Hydronamic builds the plans for higher efficiency monitoring of environmental activities appointing highly qualified personnel due to extremely demandable requests from the Abu Dhabi Port Company that reports to the government of Abu Dhabi (Halcrow, 2008). The integration into Khalifa Port monitoring stations, which had sensors for turbidity measuring, reported to the onshore laboratories that summarized the condition of water quality state through the web-server making it available for a look to the client. In case of high level of turbidity, the scientists conduct meetings with clients discussing the preventive measures that consist of increase in the monitoring activity to a daily basis taking the probes of

10 water more often. In addition to Hydronautic monitoring activities, there is a monitoring vessel that roams about 4 sq km area taking the probes of turbidity and conducting activities to predict the future effect of construction work on the environment that consisted of numerical plume model that foresees the drift of sediments plumes in the following phases of construction activities. Regardless of deserted location of KIZAD the project uses go green methods at securing the environment supporting the construction activities in covered and confined systems to prevent the dust outflow from the construction work-site. The filtration systems used at KIZAD Zone reuse the water and process the waste. The highest concern is devoted to air pollution for the purpose of clean air quality systems were set to monitor the pollution of air. Before the conduction of work on the Khalifa Port, the wildlife protectionists helped to move more than 600 animals such as wonder geckos, saw-scaled vipers and Arabian gerbils to a secured area (ADPC) - Despite the high control of activities from the clients side, the set objectives for environment monitoring was executed with excellence in compliance with all environmental standards, requirements and limitations according to the conclusion of a scientist. The monitoring survey resulted in minimization of impact on the coral reef and sea grass brining several awards to the ADPC that include: sea trade Middle East Environmental Protection award 2010, Lloyds Middle East Environmental Protection award 2011 and International Bulk Journal Environmental Protection award In the literature KIZAD is also known as KPIZ what stands for (Khalifa Port and Industrial Zone) and according to Marine Environmental Monitoring the KPIZ project considers the relocation of Port Zayed activities from the central part of the main Emirate to AL Waeelah. Except the 8,5 km breakwater shed, the construction also included revetments of 15 km and a

11 quay walls. Concerning the problematic area that pose a threat to construction the famous Ras Ghanadah coral reef plays vital importance for the flora and fauna in this sea region. The reef serves as a habitat environment for different types of fish, sea turtles including the sacred species that are on the edge of extinction (Halcrow, 2008). The main factors which influence the decision of executives to develop KIZAD project is effective location and access to the sea ports that create a convenient route to the markets, cutting the costs of production and enormous size open broad opportunities for KIZAD developers. The purpose of the project is to add the value on every stage of supply chain fostering the effectiveness of production lines along with an offer for tenants to offer better market access. The deep water sea ports had a world class multimodal access to the sea, rail, air and regular roads to use various methods of cargo and commodities deliveries to and from the sea ports. The strategic orientation of the project is flexible location of utilities supply infrastructure that has a real competitive advantage for the project. The professionalism of a team would provide a detailed integration program to the industrial area to make the presence of the tenant on its territory to the best advantage of the manufacturing facilities located. From the market standpoint, the geographical location of KIZAD serves as a most convenient access to the world markets located on the way from Europe to Asia, India, Africa, Russia having direct access to markets of North and South America that s why most of the customers that demand industrial space in KIZAD are from Eastern part of the world with the population equivalent of 4,5 billion consumers. Availability of direct connection with the Middle East particularly GCC (Gulf of Cooperation Council) and infrastructure with airports located in UAE distributing the work load on railway roads that help to access hardly reachable parts of Arabian Peninsula. One of the key points in infrastructure is high connectivity between the transportation

12 means of cargo delivery from bulky loads to raw materials that could be easily accessible through Khalifa Port and easy export of finished products that go directly to container from the Industrial Zone. The capacity of the airport allows transferring more than 17 million tons of cargo on an annual basis. Additions of Hot metal road will increase efficiency of aluminum production and Modula Path allows movement of ultra large structures through the Abu Dhabi highway networks of the roads to the central part of the emirate and other strategically significant locations for the product chain processing. The specifics of the highways, built according to international standards, have dual four-lane highways and dual three-lane arterial roads for efficient movement of cargo and traffic (Uaefreezones, 2010). The dynamic of the traffic is properly controlled by the highway bridges that prevent the organization of traffic jams in the area that covers not only UAE, but Oman, Qatar and Saudi Arabia. The further development of Etihad Railway, fostering the foundation of Pan-Arabian rail network that would connect Yemen, Oman and other GCC countries with Europe and mainly, Russia which is the biggest consumer and importer of Middle East goods, connecting the strategically necessary facilities with other countries to speed up the product turnover (Uaefreezones, 2010). The reason for high demand of KIZAD areas from other countries is close access of strategic resources such as gas and other utilities that Abu Dhabi provides to the tenants. The lowest rates for water and electricity have the cheapest value supported by flexible and convenient logistic services. The services provided in the area include power, natural gas, telecommunications, potable water, industrial process water, storm water system; ground water system combined wastewater, sewage treatment plant and treated sewage effluent irrigation (Uaefreezones, 2010). The protection of environment stands on the front positions of the objectives for project integration that s why Master Plan developed by designers promotes innovative equipment

13 aimed at increases effectiveness of operation processes by tenants using the concept of integrated clusters. The value chain of the tenants located in this region includes the production of basic materials that are supplied to the produces in the nearby area that convert materials into value added commodities. The downstream cluster produces process the commodities into value products with the help of specialist companies promote the services to sustain the other tenants working in a close operation cycle that produce ready for use products transferred to final consumer by sealines. The effect of clustering fosters productivity and profitability by the companies involved in the process and with the help of collective expertise that further stimulates the advancement of Research and Development Institutes. The clustering in essence creates economies of proximity making the supply process less costly lowering the product price simultaneously providing in time manner availability of required resources or components without a need for additional transportation. A good example of clustering exists as EMAL (Emirate Aluminum) which provides the raw materials stock for the tenants for further processing adding value in a form of the forging process (Uaefreezones, 2010). Such aid from Emal incorporates the components into finished goods going for export. The key efficiency component in Emal operation, is the establishment of Hot Metal road that would save time and costs from re-melting ingots. The attractiveness of the land includes the no tax policy on the income for the nearest period while the zone would be fully constructed lessening the burden for the investors. The authorities at KIZAD allow the tenants to choose a joint venture with 49% ownership being exempted from the tax on raw materials while later the manufactured goods would be exempted from export taxes to GCC countries (Uaefreezones, 2010). The Companies with 100% foreign capital are exempted from duties on imported goods kept in bonded status and avoid them

14 during the export procedures. That is why such favorable conditions are highly attractive to the tenants flown into this region in search of cheap cost of production. The significance of Emal in these regions reaches the world recognition because it serves as the basis for many automotive companies that are looking for most efficient ways of aluminum production. The increase of aluminum consumption on the global level creates demand for KIZAD space. In 2009, the demand for aluminum was at 23,5 tons level. The cause for increasing demand is requests from aerospace, automotive and construction sectors that use aluminum as light and durable material. At KIZAD, the Emal smelter is which is the largest in the world looks for producers of rolling mills, extrusion, castings, forging and other producers of construction type goods along with low utility costs the producers of aluminum in that region will be strongly competitive in the metal market. Besides the aluminum producers, steel manufacturers will also come to the market because of proximity to the sea so the import of the ore would be more accessible that s why while the greatest part of the steel is being imported in the country the managers of the project hope that KIZAD will attract more world steel players to produce steel in this industrial zone. The same attractive feature of clustering would enable suppliers to process the raw materials converting them to added value products ready for export. The managers expect that world players of DRI production, Electric Arc furnace and other melt shops would come to the area broadening the production series of product from rolling mills, producing Rebar, beams, sheet steel so the engineers in the similar industries could benefit from demand for these low cost steel products. The engineering technicians in different types of industries would benefit from close collaboration reducing the time for production processing, reduce the cost of operation, price for utilities and general overhead costs that will increase profitability for the business present in the zone (Uaefreezones, 2010). While the labor force will

15 increase in the Zone the demand for food, would also go up. Food Industry has it s impact on the development of Economic Vision by 2030 as a key part due to increasing population in GCC countries on an annual basis by 4%. The increase in population results in income spending, fostering the domestic demand. Development of food processing facilities in the Zone would decrease the dependency on imported products; this regulation is strongly supported by the Abu Dhabi government (Uaefreezones, 2010). Availability of Warehouse logistic terminal to preserve for shipment goods solves the problems with flexibility for companies using just in time system without the need to wait for production of demanded products. The capacity for rent varies from sq.m to sq.m in area A. The highly developed transportation system would minimize the time costs that impact the delivery of finished products. The advantages for investors who build the logistics facilities in the area consist of long-term agreement for the land in the Industrial zone or lease agreement. The Company who considers an option of renting space in KIZAD should consider except the advantages for business development the area would consist of district centers build to provide a variety of services in order to satisfy the demand working labor force in the region for daily necessities. The two District Centers that would be constructed in the area would include mosque, hospital, retail shops, food&beverage shops including others population related services (Halcrow, 2011). Obviously there is a need for the business part that would be positioned in the location of Kizad business road providing office space, commercial showrooms, training and research centers and recreation facilities for clients or regular visitors. Since KIZAD is a zone of flexible opportunities investors build the office centers upon their needs. GCC countries have a significant part of land that is isolated by a desert, so land in these countries is a scarce resource. According to the demands of tenant the Plot Allocation Committee

16 fits the needs of the client to the Industrial Zone (Halcrow, 2011). The opportunities of the clients before signing the final agreement are supported by the financial instruments that foster the availability of financial resources serving as a third party making investment in the project. After the intent to work in the area, client signs an agreement for the lease of the land which is registered at the Abu Dhabi Land Registry Department. The key point of this procedure is a fact that the owner has 100% right for the property Company signed an agreement for and guarantees operations in the Zone in compliance with set standards, promoted to secure healthy and safe business environment, by authorities. The construction of new $400 million Musaffah Channel, which is fifty three km in length, becomes a vital arteria for cargo delivery after Suez Canal, which is a gate to the Middle East from Europe. This investment allows larger ships to come to the region. The works were executed on a 30 month period basis. With the width of 200 meters, two vessel carries could go through this channel Brochure-print.pdf The construction and development of Khalifa Port, which is a jewel of the Abu Dhabi emirate, occupied the offshore area of more than 4 kilometers. Due to the size of the project it was split into five parts. The advantages of new port would be semi-automated operations that could process TEU containers in the amount of 2,5 million at the beginning of exploitation process. The island which is occupied by the Port around 3 kilometers in size. The combination of on shore and offshore sites adds up in the total amount of almost 10 square kilometers. The estimated costs of the project that was conducted in collaboration with companies were ranged on a two yearly basis estimating the cost of $1,5 billion. The depth basin of the port itself is 16 meters and the measures 800 meters by meters. Constructing the port the greatest obstacle for plan realization was Ras Ghanada coral Reef and government allocated funds to protect this

17 area and built Port on a distance level. The area of the Port has been watershed by 8 kilometers in length breakwater preventive measure. The connection to the bridges from different sides with northern and southern causeways taking the length of 1000 meters the purpose of construction was to keep the flow of water to the reef without breaking the natural marine life cycles and in coordination with this supplied the Taweelah power plant with water to stimulate energy production used for Abu Dhabi facilities and fresh water in Al Ain. The coordination of many ports in KIZAD area highlights Western Port Al Gharbia that also stimulates the economic growth. The coverage area is square kilometers along with several marines owned by ADPC. The investments of 98 billion AED to develop the recreational facilities, infrastructure and attractive economic projects reached this level. The significance of this port is the location in the 350 kilometres natural resources that have a coast covered with dunes most famous all over the world. The collaboration with Khalifa Port would gain competitive advantage to both of the facilities (Dengton-Brown, J.2011). The commence of the KIZAD project caused the development of sea infrastructure in the region. The aid from ADPC (Abu Dhabi Port Company) created in 2006 which has superiority over all national Ports came as regulator of activities between the clients and representatives of Abu Dhabi. The ADPC organization is 100% owned by the national government and has a purpose to realize the global vision of the national plan by 2030 that has a purpose to be less dependent on the natural resources such as gas and oil which are the budget forming revenues. The based on "healthy" economy originated from projects such as KIZAD has a purpose to contribute by such project and combine 15% of the overall GDP from activities of Ports and typical economical projects that are based on the foundation of investors financial resources (Dengton-Brown, J.2011). The

18 main role of ADPC to conduct and launch the projects into operation coordinating the work of contractors granting the land and licenses for operations in that region. The general information about new Port Khalifa which has been constructing since 2008 and was finished at the end of 2010 presently gives and advantage of discharging the bulk of cargoes that go to Emal Facility (Dengton-Brown, J.2011). The construction of the port has increased demand for the services provided by the port. The first reason for construction is support of KIZAD the biggest industrial zone in the area allocated for the heavy and light industry, logistic services and distribution of finished products. The second more weighty reason than the first one is the Mina Zayed Port is not suitable anymore for the contemporary port operations that are why the container procedures would be shifted to Khalifa Port. The period of holding operations would be filled up with construction of improved terminal that could handle the passenger and cargo activities. The performance of the port would include the processing of TEU containers supported by the Emal aluminum production factory and availability of warehouse storage for easy access of cargo to the terminal (Dengton-Brown, J.2011). The 6 operating ship to shore cranes which can make 35 moves on an hourly basis along with automated yard with capacity for containers would process the operations with the help of 12 STS cranes, 52 stacking cranes and 33 diesel electric straddle carriers. The future of KIZAD is highly prosperous and the main reason for development of free trade zones it to decrease dependency of the government on the natural resources. BY 2030 the government expects that free trade zones would generate 15% of GDP (Gross Domestic Product). The present trend of the government to review the limits on the foreign ownership fostering the development of free trade zones which will have tax exemptions developing the newly created investment tools to attract clients that are willing to spend their capital in flexible

19 and favorable area for business (Dengton-Brown, J.2011). The objective of the program was to make the efficient and safe transport infrastructure that would also serve to the needs of tourists. The well off connection of the region to the sea port, railway transport, air and highways becomes a competitive advantage for the business. In the future, the government would further stimulate the development of infrastructure in the framework of economic vision by The Master Plan, which was developed for the region, has efficient public transport systems along with upgraded internal road infrastructure for the whole Emirate that is directly related to the performance of Industrial Zone with the purpose to make sure goods and commuters have a perfect coordination of activities. Since the national airport became a leading hub for cargo and tourists, the increased amount of passengers would come up to 3 million persons in the next five years. The strong prospects for cargo growth make Abu Dhabi International airport the main arterial for the flow of cargo between Industrial Zone and the clients. That s why increase demand for the airport services shifts the trend to other airports as well requiring further expansion of the infrastructure and its activities. The leading passenger airline Etihad plans to increase passenger flow to 3 million requesting the government to adjust hotel and residential space correspondingly (Dengton-Brown, J.2011). The overall capacity of the passengers by 2030 would increase to 30 million passengers according to project of Urban Council of Abu Dhabi. The expansion would not only relate to airports of UAE but of other GCC countries that have a favorable location to the recreating area boosting the demand for tourism services in these areas. With arisen demand for airline services, UAE plains to invite other airline services and carriers so the competition and connection between the Emirate and other countries would be more comfortable. The increase in demand for services would also increase demand for cargo services in the nearby ports such as Mina Zayed that s why while temporarily the activities with cargo

20 from Mina Zayed were shifted to Khalifa Port the expansion of the Mina Zayed would be the main priority for the next five years. In the present moment, the two Ports can manage the demand for the service on the appropriate level but to management the growth of imports and exports in the future would require construction of additional terminals and upgrade of current equipment capacities. The current demand for the network of roads plays vital importance in management of the cargo deliveries. The location of cities, nearby ports and transportation infrastructure in accessible range reduce the costs of cargo movement from one location to the other by several times. The Government of Abu Dhabi would improve the current state of the networking system making sure that all the roads are still accessible even in the paved areas. In addition to KIZAD development the coordination of routes between western and southern region Al-Ain takes place in the planning development of the area. The construction of highly developed public transportation system would allow employees to relocate without difficulty from place to place saving time for transportation. In the railway segment of transportation the plans negotiated by the government with investors to build a metro-system in the area to make even more accessible the transportation inside the Emirate and between the key business and residential centers (Dengton-Brown, J.2011). Construction of the free zones becomes a key point of Abu Dhabi development that s why government is looking for foreign investors providing a flexible approach to construction, adjusting needs in accordance with objectives and plan for coordination of the activities in the industrial zone. The success of KIZAD would provide a significant inflow of investments in the country that will be solely regulated by the mechanism of the invisible hand as one greatest economist Peter Drucker called it. The government of Abu Dhabi first of all stresses attention on the socio-economic factors that would allow the Plan for innovation to be fulfilled. The

21 government also understand that, with demand for the foreign capital, the workflow would invade the borders of the Emirate that s why at the present moment the immigration policy is less restricted, but the nearest perspective for innovation integration is availability of job positions for local habitats mostly national born Arab who will be trained using the development programs to serve the needs of their state. The nine pillars presented by the government that include social, economic and political aspects consist of a large empowered private sector what government facilitates providing 100% ownership to the foreign investors. A sustainable knowledge based economy the some training and research centers were already built to stimulate education of the locals to work on the new and highly technological equipment. Optimal, transparent environment would attract more investors to the region creating additional demand for the nearby free zones because in the favorable economic conditions created by the government of Abu Dhabi the price for resources is unusually low and will be kept on the same level in the nearest future while the tenants fill up all available spots in the KIZAD area (Adpc, 2013). Continuation of strong and diverse international relationships fosters productivity of the region and participating in the industrial fairs all over the world creates a positive image for the whole UAE country. Development of Industrial Zone would allow optimizing the emirate resources in more useful way improving the education, healthcare and infrastructure simultaneously with the economic growth of the region (Adpc, 2013). What most notable is the preservation of values, culture and heritage of the region what becomes a key interest of the government of Abu Dhabi. Contribution to the federation of UAE becomes the leading objective in development of economic zones what leads the government to focus on the four main objectives such as economic, social, human resources, infrastructure and environmental development that would result in optimization of the government operations (Adpc, 2013).

22 KIZAD is becoming the source of economic diversification and shifts from dependence on the natural resources to the project bases operated on the basis of investments into different industries. KIZAD s future would increase the employment of local inhabitants bringing highervalue opportunities for the population in general (Adpc, 2013). The encouraged investment and entrepreneurial activity in the region would further attract potential investors. The list of legislative reforms would promote the economic security for the foreign ownership integrating the economy of Abu Dhabi into the pace of world economic environment developing a better relationship with foreign investors and capital appealing to the foreign partners to set a base in KIZAD for future growth of foreign enterprises. The effect of KIZAD development on socio-economic factors represented in the purse of objectives directed at driving motivation among employees providing world standard education throughout educational institutions securing the full employment throughout the country especially in regards to the national population. The development of the urban environment would add value to the employment process by education more people with high standards that became used to under developed conditions. The government prepared a release with the objective to develop urban infrastructure, to prepare the potential workforce for the changes complied with global standards integrated in transportation and infrastructure systems and avoided stress during the implementation of the economic vision for the nearest 15 years (Adpc, 2013). The Agenda and Policy of Abu Dhabi complies first of all with the objective for social wellbeing of the whole population. In addition to that the increasing population creates demand for the work positions and a need to improve the educational system to satisfy the demand for high tech professionals that would be required to operate the facilities and equipment in KIZAD area. The geo-political status of Emirate would present additional opportunities to have a

23 response to the dynamically changing technological environment implementing the results of achievements in research and development centers reaching higher global rankings for development indications than before. Moreover, the government of Abu Dhabi should understand the importance of international trade and not only development of the projects. The Key Indicators for this achievement would be an increase in positions for improvement of the business climate in the region and easy of business activity operations. The future plans of ADPC consist of further development of the ports in the area of UAE. The increasing population of Abu Dhabi fosters economic development presenting other opportunities for the Company to operate comply with objectives of economic vision by 2030 (Adpc, 2013). Based on conducted research the KIZAD zone along with developing infrastructure presents enormous opportunities for the regions and already hundreds of companies are flowing to pursue the reduce costs opportunities for the business in KIZAD. The reasons for building KIZAD are favorable geographic conditions which are located in the range of two biggest Emirates Abu Dhabi and Dubai and on the way located the sea ports which connect the activity on water with largest Khalifa Port in the area (Adpc, 2013). The development of Khalifa Port is the biggest advantage for this region. It s a fact that most of the companies spend financial resources on relocation of raw materials from one place to the other while in KIZAD the example of smelters at Emal facility gives a superior advantage to aluminum producers to conduct cycle activities in one place simply moving the value chain components from one process to the other in designated area. Availability of logistics terminals in the industrial zone makes access to finish products unusually convenient (Adpc, 2012). The storage of finished products in the terminals supplied the manufactured with goods available upon demand from other countries (Adpc, 2013). High

24 social responsibility of the managers not only creates the working spots for the National population improving the educational system and establishing the centers for research and development leading the economic development to compliance with the world economic standards that are traded oriented and less dependable on the natural resources. Judicial regulations and exemption from the import and exports tax make the area a lucrative paradise for the producers. Basically, what the tenant needs is to bring the capital in the country. Adjust the area in compliance with production needs to create added value product and ship to the client supported by 100% foreign ownership provides a firm security base that the capital invested would be working to the interest of shareholders hedged by the government agreements (Adpc, 2013). In a country with stable economic growth, this is a highly attractive business environment. Despite the obstacle occurred on the way to the development of Khalifa Port as a Ras Ghanada Coral reef the management of ADPC used an innovative approach that benefited to the interests of the project and environment. The economic growth of the region is truly supported by environmental responsibility by the project managers who build a long eight kilometers water break to protect the coral reef from any construction activities monitoring the turbidity of water so the flora and fauna would suffer the consequences of economic growth of the region (Adpc, 2013). If the government could allocate funds for protection of wild life preserving the rare species the investors certainly have a guaranteed that their investments would be secured and economic growth of the country would serve to the benefit not only of investors but mainly to the nation of UAE overall. The indicator of 15% growth of GDP that will result in activity of KIZAD will be surely reached due to increasing demand from tenants for this area. The developed transportation system became a main reason for KIZAD development benefitting commercially to the business that will develop operations in this region. The direct supply of ore

25 to the onshore Emal facility would result in close operation cycle of aluminum that would be improved by hot, melting road preventing the reheat of substances and putting it directly into production with incurring extra costs for transportation and preparation process for processing. Cooperation with other ports in the region would be implemented through world standard network of highways and roads supported by diverted railway system that has a direct supply of raw materials from the port to Emal facilities improving the transportation process of commodities to direct production. The integration of high technology semi automated cranes that allow to process an enormous amount of TEU containers in the port gives another competitive advantage to the KIZAD area what saves money for cargo movement and time spent on the loading uploading processes. There are more than 100 tenants waiting to sign up for booking the space at KIZAD area. Even though the terminal B is not yet completed the spots in this area already booked by 25% because the value of location is increasing approaching the end of construction.