Saudi Arabia will be the largest spender on seaport security systems with billions of dollars worth of port expansion plans under way in the region.
Saudi Arabia plans to spend $26.3 million (Dh96.5m), followed by Dubai with a planned expenditure of $11.2m, said a report by Frost and Sullivan titled "Middle East Seaport Security Market Assessment".
The report, however, warned that despite the massive expansion of various ports across the region, the percentage of expenditure on security by port authorities continues to be minimal.
Dubai's Jebel Ali Port, one of the largest in the world, is planning to expand in various stages until 2030. The Khalifa Port and Industrial Zone in Abu Dhabi are also being expanded.
According to a senior official from Frost and Sullivan: "The seaport security market in the UAE is set to grow at a CAGR [compound annual growth rate] of 6.8 per cent from 2009 to 2016. In terms of earnings, the report said the market earned revenues of $7.9m in 2009 and estimated this to reach $11.6m in 2016," said YS Shashidhar, Vice-President and Country Director, South Asia-Middle East and North Africa.
According to Shashidhar, screening and detection will continue to drive the market as cargo security gains importance.
At the same time, challenges related to increased trafficking, smuggling and illegal immigration will prompt port authorities to deploy advanced detection and screening systems. However, funding for seaport security is typically undertaken by private port owners. Accordingly, they confront the challenge of investing in high-cost security systems.
"With public funding at a minimum, port authorities and ship owners are reluctant to spend more on security," said Shashidhar. "The cost of security-related investments is not passed onto customers; instead, owners bear the entire cost."
Notwithstanding this challenge, the fast-expanding terminal capacity and new seaports will stimulate the Middle East seaport security market. These developments will encourage the procurement of new security systems. With further expansions anticipated in 2012, the seaport security market in the region is poised to grow.
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