Infrastructure is a lynchpin for Ras Al Khaimah’s economic growth, particularly as the emirate’s local manufacturers need cost-efficient routes to their various markets and tourism operators require greater general access and interconnectivity to expand. In response, the emirate plans to increase capacity by expanding its existing network of roads, ports and air transport facilities, with a particular focus on enhancing the RAK International Airport.

Changing Focus

The emirate’s relative lack of oil and gas has left it keen to exploit many other natural resources, such as limestone, and in fact many of the manufacturing facilities built up around those basic inputs have since grown and diversified. The commercial focus for transportation networks has typically come from manufacturing, because it was this economic sector that the authorities have specifically highlighted for development.

These efforts have succeeded to the extent that RAK is confident of continued growth within the industry and is moving to prioritise another economic sector, that of tourism, as a way to further diversify the economy. Doing this, however, necessitates looking at transportation infrastructure in a new light. Considering transport as regards the tourism sector’s needs, for example, requires a rethinking of priorities. RAK is targeting more tourists from European destinations, as well as from within the region, and this has meant making more flight options available. To that end, RAK International Airport is aiming to grow beyond its start-up phase and has announced a renovation and expansion plan for 2013 that is expected to boost capacity and streamline operations (see analysis).

Air Travel

Responsibility for aviation in RAK is shared between the federal and local governments. RAK International Airport, for example, is a local government entity, and on-going renovation has begun to help the airport move toward profitability. The airport’s revenues increased by 31% in the first quarter of 2013, and the number of aircraft movements rose by 42%, according to the airport.

RAK Airways provides the only scheduled service into the airport at the time of writing, with charter flights provided by other airlines.

RAK Airways was launched in 2006 as a private company operating within the free zone of the RAK Investment Authority (RAKIA). This was a case of bad timing, due to factors outside of its control, such as the global financial crisis hitting in the following year. In 2008 the airline suspended its services. It restarted in 2010 and has been growing steadily since; in 2012 it carried about 300,000 passengers, a 47% jump from 2011 totals, according to the airline. As of early 2013, RAK Airways had two Airbus A320 planes and nine destinations to which it was offering services; however, in July 2013, the president and CEO announced plans to expand the fleet and extend service to 40 new destinations by 2015.

One of the changes made when RAK Airways resumed scheduled services has been a strategy to place their airline at a middle-of-the-road market position. The RAK Airways Model, as company officials call it, is more comprehensive than a low-cost carrier, but does not provide the same level of service as a traditional airline’s offerings.

For example, unlike when they travel with budget airlines, passengers can expect a luggage allowance without paying any fees (a 30-kg bag is allowed on most flights), as well as a free food and beverages.

And unlike full-service airlines there are no in-seat entertainment options, and RAK Premier – the business-class option – is less differentiated from economy class than a premium option on a typical airline. RAK Premier customers get an upgraded meal and a more comfortable seat.

Planning Routes 

For RAK Airways officials, one of the main goals is to capitalise on the traffic from expatriate labourers coming into GCC countries for work. As such, six of its nine destinations are in India, Pakistan, Nepal and Bangladesh – countries that are key suppliers of labour on the Arabian Peninsula. Flights to and from Peshawar and Lahore in Pakistan have been increased from twice to three times per week, and the Dhaka, Bangladesh route has been upped from once to three times per week. With its routes within the GCC including Doha, Qatar and Jeddah, Saudi Arabia and with RAK situated less than an hour from Dubai, cost-conscious workers heading to these three places, or their employers, might choose RAK Airways because it aims to be cheaper than other carriers servicing those destinations.


Maritime shipping is a crucial part of RAK’s economy. RAK Ports, the local government’s umbrella entity for maritime shipping, is managed by the Saqr Port Authority, and while Customs regulations are formulated at federal level, they are handled by RAK officials. The emirate’s authorities have made it a top priority to develop multiple and targeted options for maritime transport.

Saqr is currently the largest of the emirate’s five ports and stands as the biggest bulk port in the Middle East region. The others are Al Jazeera, dedicated to dry-dock repairs; Al Jeer, specialising in livestock and recreational use; RAK Khor, which is set in the city and has a passenger terminal and cargo facilities; and RAK Maritime City, which is being developed in concert with a free zone built around the new port’s private quays.

Saqr Port was opened in 1977, and its use and outlook are tightly aligned to RAK’s natural resources as well as to the regional economy. Most of what is exported through Saqr is construction aggregate, which is quarried from sites inland and destined for building projects in other GCC countries.

Roughly 80% of trade through the port is within the Gulf, port officials told OBG, with two notable exceptions being high-grade limestone shipped to India for the steel plants and aggregate sent to customers in Madagascar. Imports into Saqr Port – which mostly consist of raw materials for manufacturing or industry – include clay, oil, coal, feldspar, kaolin, gypsum, silica and white clinker.

Regional Importance

Although the global financial crisis of 2008 put a halt to or downsized many of the construction projects in the region and beyond, Saqr Port suffered only a temporary dip in throughput and has since gone on to record levels of activity. Indeed, before the crisis, Saqr Port handled 30m tonnes a year, which fell to 26m tonnes in 2010, according to port officials. However, the next year Cargo through RAK Airport, 2007-11 saw a recovery: a total of 35m tonnes were handled in 2011, followed by about 45m tonnes in 2012. Continuing the trend, more than 50m tonnes of bulk products are expected to pass through the port in 2013, based on monthly activity levels seen during the spring. The historical record of 4.4m tonnes per month was recently surpassed and as of late April, throughput was at about 4.5m tonnes per month, according to the port’s data.

Main Drivers

Overall, Saqr Port has thrived in the past decade as oil prices climbed, leaving the petroleum-based economies in the region increasingly flush with cash and embarking on major infrastructure projects and building surges. Developments such as Palm Jumeirah, Dubai International Airport and the Burj Khalifa skyscraper – which is the world’s tallest at present – have all been built with aggregate/rock moved through RAK’s ports.

The future for RAK’s ports holds multiple opportunities to supply projects of similar scale and importance. Qatar will be building stadiums, hotels and much more in order to host the 2022 World Cup, for example. Another major potential driver of growth is the 2020 World Expo, which Dubai is bidding to host. If successful, this would create another round of major building projects.

In addition, with four GCC oil producers having recently established a $20bn infrastructure fund to be spent in two other member nations with the least amount of petroleum income – Bahrain and Oman – set to see additional projects developed there, the future of Saqr Port’s core activity indeed looks bright. Furthermore, in Saudi Arabia, a growing population and a rapidly modernising economy have created the expectation that infrastructure projects will remain a regular feature of the annual budget in both the short and medium terms.

Improvement Plans

Apart from regular maintenance and improving the port’s infrastructure, four new cranes have been brought in over the past four years. Additionally, the management of Saqr Port is undertaking a study to develop a strategic master plan as of April 2013. It expects plenty of room for foreign investment in the process.

At the moment the port offers a 12-metre draft for ships, limiting the size of vessels that can call on it to approximately 60,000 tonnes. Ports in India are typically 14 to 16 metres deep, so expansion at Saqr to match that level would allow for an increase in exports to that country, for example. It could also lower costs for coal imports, which are expected to be a growth area for Saqr. Indeed, RAK is looking to coal as a way to achieve a greater degree of energy security. The emirate has limited hydrocarbons of its own and as a result is reliant on neighbouring emirate Abu Dhabi as well as imports to meet increasing energy demand (see Energy chapter). Generating electricity and desalinating water are energy-intensive activities that are becoming increasingly important to the emirate. However, federal law specifies that power and water be supplied to RAK for residential use but not for commercial usage.

Local Focus

As an exemption to this rule, however, the Federal Electricity and Water Authority does supply some industrial customers in the emirate and is planning capacity upgrades, as RAK’s authorities are keen to develop local generation, transmission and distribution capacity. To this end, Tata Power has arrived to conduct an operational demand study and a 10-year forecast for the emirate’s electricity needs, and that research is expected to be complete by the end of 2013. RAK Investment Authority (RAKIA), which operates free zones and serves as a local partner to some foreign investors in manufacturing outside them, has developed its own electricity capacity. Along with the private utility, Utico, RAKIA is also building capacity for both power and water.

Utico also sees coal’s potential in the energy mix of the emirate: a power plant that the company is building will have a capacity of 270 MW of electricity and will utilise a cleaner-coal technology capturing carbon-dioxide emissions, which could then be sold to an offtaker for industrial use.

Similar environmental concerns at Saqr Port, such as the amount of dust created by the large piles of aggregate on site, are also under consideration. But officials told OBG they are not necessarily counting on government funding from RAK’s leadership for their expansion and development plans; rather, these are hoped to be driven by foreign direct investment.

New Capacity

Al Jeer Port was completed and opened in 2007 at the northern part of the emirate, and is aimed at both commercial and leisure segments. The commercial side is specifically geared toward livestock handling. For recreational users, the port includes a sailing club and a 266-berth marina and is conveniently located on the way to Omani waters, with the ability to process Customs and passport paperwork quickly.

RAK Khor Port has 16 warehouses, cold storage and a passenger terminal, which has been identified as a vital component of aiding the goal of boosting RAK’s income from tourism by attracting cruise ships. This is, however, considered a long-term goal of RAK Ports rather than an overnight transformation, as cruise tourism generally takes years to develop, given the need to build relationships with cruise lines.

RAK Maritime City opened in May 2011 and its integrated free zone offering fits with what has worked in the emirate in the past. Free zones are an integral part of the emirate’s economy, as well as the UAE’s.

As the emirate seeks to further differentiate its available free zone services and pursue specific industries, it has settled on Maritime City as its newest effort, aiming it at those who want exclusive rights to a private berth and loading facility. The zone is developing rapidly and is being designed using a clustering strategy; cargo handling, ship building and repair, marine construction, petrochemical tank storage and manufacturers that require direct water access will be grouped inside the zone industrials, manufacturers and others will be grouped inside the zone according to their specific activity, and at sites tailored to their needs. Al Jazeera Port is a fully functioning ship repair and drydock facility that also offers cargo handling.

Licensed To Operate

Maritime City tenants will have the same range of licensing options available to them as is typical in other zones in the country, and will operate in the same investment environment with 100% ownership rights and capital repatriation abilities that are free from income, capital gains, value-added or withholding taxes, and without restrictions on foreign exchange, capital repatriation or labour imports. The only companies in free zones that may have to pay taxes are those desiring to sell to the domestic or GCC markets. Licensing costs range from Dh3650 ($994) a year to Dh15,000 ($4083), depending on the scope of activity.

One thing missing from RAK’s varied port offerings is container shipping. That is in part because of the proximity of Jebel Ali, Dubai’s container port, which has emerged as one of the world’s busiest. The path from RAK’s free zones to Jebel Ali is well worn and manufacturers praise the Dubai port for its efficient handling of containers. However, several companies told OBG they would likely patronise a container port in RAK if the option were available. Costs and timing are a factor – Dubai is further away and prone to large traffic jams.

Committing to providing a container shipping option might require RAK to have enough of its local exporters pledging to use the option. Thus, as of April 2013, RAKIA was conducting a demand study.


While trunk roads are a federal responsibility, the smaller feeder routes within the emirate are the responsibility of RAK’s Public Works Services Department. The RAK Transport Authority is responsible for surface transportation, including licensing taxis and providing public services. An interemirate bus system is in the early stages of development. On the federal level, a major project is the Sheikh Khalifa Highway, which in late 2011 was completed and opened for use. The road is a 40-km stretch running between Dubai and Fujairah that passes through RAK. At the emirate level, the major addition to the road network is a ring road. This is a project that is desired by most in order to give trucks and other commercial traffic a way to pass around the city faster as well as to remove congestion from inner roads. At 32 km long, the route will connect Emirates Road, the highway leading south to other parts of the UAE, RAK’s quarrying areas and Saqr Port.

Originally commissioned in 2008, the project has been delayed due to the discovery of archaeological findings. As of April 2013, the authorities had decided to avoid destroying a number of ancient tombs at Qarn Al Harf, designated a protected site by Emiri decree. The route, as it stood at that point, was up for changes, and local media reported on April 16 that government agencies had met and agreed to explore other options.

Meanwhile, the expansion of another federal-level road was halted in February 2013 for similar reasons. Uncovering these sites is a mixed blessing. On the one hand, it delays the completion of important infrastructure, but on the other it provides further underpinning to RAK’s tourist appeal, a large part of which is its archaeological heritage.


Expansions are currently under way across all sectors of transportation infrastructure in RAK, and these are presenting significant investment opportunities, as well as demonstrable economic benefits to the emirate. For 2013, however, much of the attention appears to be focused on RAK Airways and RAK International Airport, two very crucial elements of the emirate’s tourism development plans and key to its vision for wider transport expansion.