ABU DHABI, July 25 (Reuters) - Abu Dhabi, the oil rich capital of the United Arab Emirates (UAE), expects to collect 400 million dirhams ($109 million) a year from a road toll to be introduced on Oct. 15, an official said on Thursday.
Abu Dhabi said it was to start charging the toll after a prolonged period of lower oil prices during which a federal value added tax (VAT) of 5% has been introduced.
“We expect 400 million dirhams per annum of revenues from this and we expect to invest back,” Ibrahim Sarhan al-Hamoudi, acting executive director of surface transport at Abu Dhabi’s Department of Transport told reporters.
He said Abu Dhabi spends 3-4 billion dirhams a year on infrastructure and that the toll would help reduce congestion.
Electronic toll gates will be placed on four bridges leading to Abu Dhabi city.
“It is a new source of revenue for government-related entities and will support their spending on transport and infrastructure,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
Abu Dhabi will be the second of the UAE’s seven emirates to have a road toll after Dubai, which introduced “salik” in 2007.
$1 = 3.6728 UAE dirham Reporting by Stanley Carvalho; Editing by Mark Potter