Construction

Port of Call

The flow of goods in and out of the region increased once again last year and shows few signs of declining.

The flow of goods in and out of the region increased once again last year and shows few signs of declining.

The Middle East has been a trading hub for hundreds of years, connecting the sea routes to Asia and Europe. The region is currently undergoing a massive overhaul of its port hubs and trade infrastructure. Billions are being poured into projects across the region adding millions of TEUs to the capacities of the region’s ports.

According to EC Harris port expansion spending in the Gulf countries will reach $15 billion in five years and trade between the GCC and emerging markets has been growing at double-digit figures in the wake of a slowdown in debt crisis-hit Western countries, prompting the regional states to expand facilities at many of its 35 major ports. EC Harris’ most recent report on port development ranked the GCC as the most attractive region in the world for investment in port developments, led by mega-projects such as Khalifa Industrial Zone and Oman’s Al Duqm and Port Khorfakkan in Sharjah.

This is despite the region already being well-served by ports such as Jebel Ali port which is undergoing a major expansion.

Meanwhile the leading port inside the Gulf, Jebel Ali, is set to grow even bigger with DP World announcing that it is to expand its flagship port by an additional 4 million TEU. This will take total capacity to 19 million TEU by 2014.

There’s more ports in the pipeline too as they are increasingly being viewed as the way to diversify the gulf’s economies. The flow of trade is big business even becoming a political hot potato in some areas.

Kuwait and Iraq’s fragile relations were recently tested when they both announced plans to develop ports on the narrow Khor Abdullah waterway that separates the two countries. Both countries see their ports as essential elements to their aspirations of turning the northern Gulf into the entry point into Europe for trade and the oil and gas sector

The Gulf remains Iraq’s main export point for its oil and the country desperately wants to upgrade its maritime infrastructure around Al Faw. Kuwait wants its planned Mubarak mega-port on Bubiyan Island to become the main entry point for overland transits to Europe.

“Rising trade with the emerging markets has thrown up massive business opportunities for GCC countries, encouraging them to invest heavily in their ports to raise capacity,”says Ahmed Mohammed Al Midfa, chairman of the Sharjah Chamber of Commerce and Industry.

He adds: “Most of these ports are also well placed to benefit from a gradual shift in trade routes — being ideally located between Asia and the Far East on one hand and the West, Central Europe, and Africa on the other.”

“Most of these ports are also well placed to benefit from a gradual shift in trade routes — being ideally located between Asia and the Far East on one hand and the West, Central Europe, and Africa on the other.”

Midfa opened the Mastech 2011 Gulf maritime event in December. The event attracted over 300 delegates to its new conference on port building organised by the Gulf’s Middle East Alumni of Ship Technology (MAST). MAST president Rajesh Babu said that much of the talk in the conference room centred on the machinery needed to run the next generation of ports in the region.

“The sessions are designed to focus on next generation ship designs, shipping economics, technical innovations in maritime industry, marine heavy lift and transports and offshore oil and gas sectors,” says Babu.

The estimated infrastructure investment of $2 trillion by GCC states and the increasing focus in the manufacturing sector are also driving up cargo movements and utilisation of excess capacities.

This is helping to drive the sale of the specialist cranes needed to service the docks and ships, plus the huge variety of ancillary materials handling equipment that will move the goods on to their final destinations. But first they need to be built or completed.

One close to finishing is Oman’s Al Duqm port, at its peak one of the biggest construction sites in the Middle East. Soon the excavators and trenchers will make way for the permanent machinery that will serve the port. The Ports and Maritime Affairs office at the Ministry of Transport and Communications tender for lifting and heavy transportation equipment was estimated to be worth at least $14 million. The port is expected to open by the middle of 2012, once STFA completes the $212 million construction of 30km of roads, wadi diversions and related infrastructure needed to complete the port.

One of the largest ports currently underway is Abu Dhabi’s Khalifa Port. The Middle East’s first semi-automated terminal in the Middle East opens its first section later this year. Phase 1A will have a capacity of 2 million TEU, although it opens with an initial capacity of 1.1 million TEU in the fourth quarter.

According to Abu Dhabi Terminals chief executive Martijn van de Linde the highly automated port will challenge the “status quo”, and befitting Abu Dhabi’s green aspirations make efficient use of the land area, reducing environmental impact and pushing regional standards to a “new level”.

“We don’t want to invent the wheel again, so Khalifa is based on a proven technology and performance,” adds Joost Achterkamp, project manager for Abu Dhabi Ports Company. “We have project challenges; the schedule is very tight. The first ASC will be on site 10 months after the contract is awarded and delivery of all the equipment and TOC will be 19 months after contract award.”

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