Infrastructure development of Middle Eastern ports

Timon Singh

When it comes to transport and trade in the Middle East, rail and air projects have dominated the headlines, but in recent months there has been a lot of investment in shipping yards. As such, Infrastructure MENA looks at the latest Middle Eastern ports, their planned infrastructure developments and the deals that will make the region's docks key industrial zones.

Like many ports around the world, security has always been a key issue. Last year, Dubai Port World announced that it had successfully completed the installation of the one of world's most advanced Integrated Security Systems (ISS) at the largest marine terminal in the Middle East.

It was done to address the large question of security at Middle Eastern ports and reassure European and American companies that as much was done to ensure security in the region as was done across the sea.

The security controversy first began in February 2006 and rose to prominence when a national security debate raged in the US. At the time the problem surrounded the sale of several port management businesses in six major US seaports to a company based in the United Arab Emirates (UAE), and the possibility that such a sale would compromise port security.

However today, much has been done to address these concerns - extensive networks of security cameras covering all port operations, enhanced security at terminal entry and exit points as well as an Identity Management System (IDMS), providing key information on persons at work inside the terminal has all been installed to make sure that Middle Eastern docks are secure.

It is a key issue, especially when it comes to financing new port infrastructure developments.

New agreements

This week, Abu Dhabi Ports, developer of ports and industrial zones in the Gulf Arab emirate, and DP World teamed up to create a joint venture to operate Khalifa Port at Taweelah.

Funded by Abu Dubai's government and rumoured to cost US$3.5 billion, the construction of Khalifa Port is a key part of the emirate's infrastructure investment plan to transform the region by 2030.

For Abu Dhabi Ports, the agreement will prove to be incredibly lucrative, but not all port infrastructure developers are doing well.

Drydocks World, a unit of Dubai World, is still suffering from the Dubai Debt Crisis and is in talks with banks to restructure its US$1.7 billion of debt and to stop it maturing next year.

The shipbuilding arm of Dubai World signed a US$2.2 billion loan in October 2008, involving 15 lenders, according to Thomson Reuters. Drydocks World, although part of Dubai World, is not included in its parent company's debt restructuring proposal. Dubai World reached a deal with its core lenders to restructure US$23.5 billion in debt earlier this month.

Despite Drydocks World's financial woes, it is a boom time for Middle Eastern ports. Over 35 ports in the Middle East are planning to be expanded or rehabilitated, with US$39 billion said to be invested in them. While the global recession hampered maritime trade, ports are expected to see a surge in demand over the next few years, although operational and overhead costs are still set to be a concern for many.

Relevant articles:

Urban regeneration in the Middle East | Transport infrastructure in the Middle East | Water infrastructure in the Middle East