UAE invests $23bn to expand seaports

The UAE has pumped $23 billion (Dh84.5bn) to develop its seaports in an effort to take advantage of the growth in business it expects from high oil exports and swelling imports.

The capital accounts for nearly 60 per cent of the total investments of around $38.2bn injected in port projects by the six-nation Gulf Co-operation Council (GCC), the Kuwaiti Financial Centre, Markaz, said in a study on Gulf ports.

As a result, the UAE has emerged as the largest transhipment centre in the region, handling about 61 per cent of total port business in the 28-year-old GCC between 2004 and 2008.

Its figures show total volume handled by the GCC's 38 sea ports grew by around 12 per cent annually from 15 million twenty-foot equivalent units (TEUs) in 2004 to a record 24 million TEUs in 2008.

"The UAE ports have the highest share of volume among the GCC countries at 61 per cent. Ports in the UAE have witnessed a 13 per cent growth in volume during 2004-2008.

"The highest growth was in Kuwait at around 15 per cent, but it had a low share of overall GCC volume at just four per cent," it said.

The report said the GCC countries, which control 45 per cent of the world's proven oil deposits, have 35 major seaports, some of which are currently undergoing expansion to meet increasing trade demand.

"Total investments in GCC port projects until 2008 have touched nearly $38.2bn, with maximum investments in the UAE at around $23bn," it said.

But the report said port projects in the GCC face two major challenges.

"First is lower oil revenues for a long period of time, which might result in the cancellations of some of the large port projects currently under way.

"Also, the continuation of the financial crisis could result in the cancellation of many projects. Estimates show that $1.68bn worth of projects have either been put on hold or cancelled."

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