Expansion work on most of DP World's projects resumes

Port expansion work on most of DP World's projects have resumed as Yemen announced the latest expansion at the Aden Port.

Although DP World recently announced a fall in profits during 2009, it is widely expected that the company's presence in fast-growing emerging markets, continued port expansion and pick-up in the global trade and shipping conditions will boost its performance in the next 12 months.

DP World reported a six per cent drop in Q3 2009 container volumes, taking total volume declines for nine months of 2009 to eight per cent year on year.

DP World is currently proceeding with port expansions across India, Pakistan, China, South America and the Mena region.

According to Reuters, Yemen, in association with DP World, is planning a major expansion of Aden's container port.

A joint venture was formed between Yemen and DP World in 2008 to develop and operate the container port in the southern Yemeni city, strategically located on the southwest rim of the Arabian peninsula.

The Aden port also plans a tender for a dry docking and repair station, he said, without giving a value.

"This will give us the opportunity to receive more ships," he said, adding three to four container lines are regularly calling at the port.

In the next stage of expansion, another 400 metres will be added to the container terminal within three years, said Adel Abdullah Al Sammak, DP World's Senior Operations Manager in Aden. He gave no value but Bin Aefan put it at $220 million (Dh807.8m). "Aden has an excellent geographic position. Of course, the economic crisis has had an impact but this is not a specific Aden issue," Sammak said.

Under a business plan, the number of berths might increase from two to five by 2025 with container traffic reaching 2.2 million twenty foot equivalent units (TEU) by then, the official port newspaper said.

"The total quay length will reach 2,000 metres at Aden Container Terminal," it said. But DP World Aden adviser John Fewer cautioned expansion beyond the 400 metres will depend on "commercial requirements". He declined to give a forecast, saying: "Yemen is growing. That's why we are here."

Thanks to its location on the Gulf of Aden and proximity to the Red Sea, Aden was one of the world's biggest ports decades ago when steamers bound for the Suez Canal called in to refuel.

The advent of bigger ships meant fewer stops were required and Aden's port diminished in importance.

The port is now investing at least $270m to widen and deepen the entry channel and add facilities to receive more and larger container ships, said Bin Aefan.

Hit by the global turmoil and piracy from neighbouring Somalia, 2009 container traffic fell by 39 per cent to 265,459 TEUs, a benchmark for transportation. The number of ships calling fell to 315 last year from 438 in 2008, official data showed.

"Piracy… this is a very troubling issue," said Mohamed Mubarak bin Aefan, Head of the Aden port management.

The number of piracy attacks worldwide leapt almost 40 per cent last year, with gunmen from the failed Horn of Africa state accounting for more than half the 406 reported incidents, said the International Maritime Bureau.

Aden also hopes to develop the port as a hub for East Africa and the Gulf as the city lies on the Europe-Asia shipping route and is home to most of Yemen's oil industry. In October, it started with France's Total a $4.5 billion project to export liquified natural gas (LNG) from south Yemen.

Last month, Yemen said it was in talks with investors to upgrade its main oil refinery in Aden, hoping Gulf Arab producers might use it to lower dependance on the narrow Strait of Hormuz in the Gulf, the main oil shipping route.

Aden's container capacity will rise by 500,000 TEUs to 950,000 TEUs in three or four months as 8km of storage area will be added, the port head said.

Meanwhile, DP World's port expansions are continuing across India, Pakistan, China, South America and the Mena. The International Container Transshipment Terminal at Vallarpadam in Kochi, India, is likely to be operational by June. Once completed, the Rs2,000 crore (Dh1.6bn) port-based infrastructure project, which started in 2007, can handle three million TEUs. The work on the terminal is taking place in two phases and almost 90 per cent of the work has been completed.

It recently launched the Saigon Premier Container Terminal in the Vietnamese capital, Ho Chi Minh City.

Work on the facility was completed in just two years. Phase one of the development has two berths and storage capacity for up to 15,000 TEUs at a time, including 650 refrigerated container slots.

 

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