Economic Update

Published 30 Nov 2018

The expansion of Khalifa Port’s container handling capacity should bolster Abu Dhabi’s position as a trans-shipment hub for regional and global markets, with the emirate nearing completion on, or finalising plans for, new container terminals and in-country transport links.

At the end of September Khalifa Port received the initial consignment of container-lifting equipment for the new Cosco Shipping Abu Dhabi Terminal, which is currently under construction and is expected to open by early next year.

The consignment included 10 automated rail mounted gantry (ARMG) cranes and four ship-to-shore cranes delivered from Shanghai. The units, which have a 41-tonne lifting capacity, will be fully integrated with Khalifa Port’s terminal operating system, making it the region’s first semi-automated port.

The development comes as Chinese maritime logistics firm Cosco Shipping Ports nears the closing stages of works on the first phase of a landmark project to build a new container terminal at Khalifa Port.

In September 2016 the firm signed a 35-year concession agreement with Abu Dhabi Ports to develop and operate the new terminal, which will span 70 ha, with works to include the addition of 1200 metres of quay wall and the deepening of the main basin to a depth of 18 metres to accommodate vessels carrying up to 20,000 twenty-foot equivalent units (TEUs).

The first 800 metres of quay is expected to come into operation by the first quarter of 2019 and the final 400 metres by 2020, according to local press reports, expanding Khalifa Port’s overall container handling capacity by 2.4m TEUs to 5m.

In line with China’s Belt and Road Initiative, the new terminal is expected to strengthen Abu Dhabi’s position as a strategic hub for Chinese exports to the GCC, enhancing cooperation between the UAE and China.

Second international operator secured for $1.1bn container terminal

The Cosco expansion is not the only project under way to boost Khalifa Port’s capacity and strength its status as a trans-shipment hub.

In May Abu Dhabi Ports inked a 30-year concession with a second international operator – Swiss-based shipping and logistics firm Mediterranean Shipping Company (MSC) – to develop and operate another container terminal at Khalifa Port. Under plans outlined by MSC, the $1.1bn project will add a further 2.8m TEUs to container movement capacity by 2020, bringing total capacity up to approximately 8m TEUs.

According to Abdullah Al Hameli, CEO of Abu Dhabi Terminals (ADT), the port’s operator, one key outcome of the partnership with MSC is that it will allow for ships that usually call at other ports to dock directly at Khalifa Port instead, boosting the position of Abu Dhabi as a container hub.

“By being part of a large global shipping alliance, Khalifa Port benefits from the volumes MSC can channel into ADT, whether as imports into Abu Dhabi or containers to be trans-shipped to other countries,” he told OBG.

Port expansion to support KIZAD development

The improved capacity of Khalifa Port and increased number of operators is also expected to support downstream industrial and manufacturing activity at the nearby Khalifa Industrial Zone Abu Dhabi (KIZAD).

The expanded port will ensure the smooth flow of raw materials and parts into the zone, and carry finished products to global markets. In addition to reducing logistics costs and boosting trans-shipment activity, the enhanced supply chain is also likely to appeal to investors and encourage new enterprises to set up shop in KIZAD.

Another development likely to spur investment in KIZAD and other clusters around Abu Dhabi is the GCC broad-gauge rail network. Though delays in some segments of the regional network are holding back the wider project, the UAE is pushing ahead with its main line.

On October 10 Etihad Rail opened pre-qualification for the second stage of the national rail project, with works to include 628 km of new track, which will link to Khalifa Port and Dubai’s Jebel Ali Port, and a line extension to the Saudi and Omani borders. Construction work on the extension is scheduled to be completed by 2024, with services to begin in that year.