Dow Jones reported that plans to invest almost USD 40 billion to triple port capacity across the oil rich Arabian Gulf region are sailing against stiff global economic head winds.
According to Zawya Projects Monitor data, before the global financial crisis weighed heavily on international trade, developers in the Arab states of the Gulf had plans to add 62 million 20 foot equivalent units or TEUs of capacity by 2028 at a cost of almost USD 40 billion. But a sharp downturn in container traffic has forced a rethink by some of the region’s maritime planners.
According to industry experts, global container shipping is expected to fall 7% 2009. Volumes to the Gulf and Middle East are down around 20% or more on main Far East, European and transpacific routes. By August, 580 ships 1.5 million TEUs of capacity 10% of the global fleet, were laid up. In the next 4 years half of the 200 container ships of 10,000 TEU plus on order are likely to be deferred or canceled.
Mr Neil Davidson head of research at Drewry Shipping Consultants in London said that “Our anecdotal experience is that pretty much all port expansion projects both in the Middle East and elsewhere are on hold or under review, so severe is the global downturn.”
Data from Drewry showed that 24.4 million TEU of cargo was shipped through the Gulf Cooperation Council in 2008 compared with a total capacity of 30.4 million TEUs. Over half GCC port throughput is transshipment and according to Drewry throughput at Gulf ports will fall 7% 2009. Still, regional port operators are being encouraged to move ahead with expansion plans to keep pace with rapid economic growth in the Gulf.
Mr Iain Rawlinson APM Terminal’s commercial manager in Bahrain said that “The Saudi market is extremely interesting, reasonably strong and growing. We don’t see ourselves as a competitor to Saudi, so much as helping to improve the network, especially at Jubail which has lacked investment.”
King Abdullah Economic City in Saudi will add 20 million TEUs of capacity over Phases 5 to 2020. Analysts said that the Saudi government may have to fund the project, despite a decision to sell the assets. Other projects in the kingdom that will cater to dry and liquid bulk cargoes include the industrial terminals at Ras Al Zour, which will handle 70,000 dead weight tonne vessels and Jubail, where the Royal Commission for Jubail and Yanbu completed 3 new petrochemical berths of 2009.
Mr Rawlinson who sees the terminal as ideally placed for upper Gulf feeder runs said that “The Jubail export market is very substantial and forecast to grow 60% in next 12 months.”
(Sourced from Dow Jones)
