Booming Ports

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Booming regional and international trade has pushed the Northern Emirates to expand and modernise their harbouring infrastructure to cope with expanded trade links and grab a share of the regional and international maritime transshipment industry.

Sharjah hosts the largest port in the Northern Emirates. Port Khalid, the first container berth in the Gulf, features twenty-one 11.5m deep berths and is planned to increase the depth of four container berths to 12.25m in the near future, to accommodate for an ever-increasing container traffic.

The Khorfakkan Container Terminal (KCT), Sharjah's sole port on the Indian Ocean, is dedicated entirely to container handling. With a 1000m quay and 15m draught, it is operated exclusively by Gulftainer, and handled over 1.5m TEUs (Twenty-foot container Equivalent Unit) in 2006. Recent upgrades have brought its handling capacity to 3m TEUs, and, thanks to the popularity of containerised shipping worldwide, the port should soon operate at full capacity.

Ras al Khaimah also has big plans for the Saqr Port. Initially designed as a bulk port for the local cement industry, authorities agreed on a massive expansion in 2005, and contracted Kuwait-based KGL Ports International to develop the port into a state-of-the-art facility. The first phase of the upgrading project was officially completed on May 17, with the inauguration of a container terminal with a capacity of 350,000 TEUs. The investment amounted to $70m, covering the construction of four new berths - 795 metres long in total - and the modification of several others, as well as the purchase of cargo loading equipment and a tug boat. When the second and third stages of the upgrading plan are completed in 2012, the port will have a capacity of 3m TEUs, according to a statement by KGL. The total cost of the project is estimated at $250m.

The Ajman Port, although much smaller in size, has been one of the fastest-developing ports in the Northern Emirates, with yearly wharf tonnage almost trebling in 7 years, from 500,000 tonnes in 1999-2000 to 1.3m tonnes in 2006-2007. The number of containers handled also increased tremendously, from just 1299 in 1999-2000 to 41,138 in 2006-2007. The port has container, break and general bulk, and Ro-Ro (roll-on/roll-off) capabilities. It is mainly an import and re-export port, and most of the traffic it handles is to or from Asia.

The Ajman Port is quickly reaching its maximum capacity. The L-shape of the creek where it is located hinders manoeuverability, and as a result, 150m-long boats are the largest that can dock, carrying a maximum of roughly 500 containers. Urban development has also completely surrounded the port, which is left with little space to develop further. In the long run, relocation should allow the port to expand its size and activity.

Finally, the port of Fujairah, which has become the third bunkering port in the world, also handles container, general cargo and livestock shipments. Its strategic location on the Indian Ocean allows ships to avoid the Strait of Hormuz, reducing traveling time for UAE-bound ships to between one and one-and-a-half days. In 2005, the Fujairah Port Authority signed a 30-year concession agreement with Dubai Ports International (DPI), who committed to a $155m investment to upgrade the port's capacities. The programme, which should go on for at least another two years, will eventually lift the port's container handling capacities to 1.7m TEUs.

However, the UAE maritime shipment industry could be affected by regional developments. Events in Iraq and Somalia, for instance, effectively caused a slight decrease in traffic in the Port of Ajman in 2006-2007. Turmoil in Iraq is resulting in fewer cargo shipments while renewed violence in Somalia has resulted in a decline in trade. More generally, East-Africa-bound ships are also at the mercy of pirates off the Somali coast. Since the beginning of the year, at least 2 UAE-based ships have been hijacked in Somali waters, and several similar incidents happened in 2006. UAE-based ships are particularly at risk, since they account for most of the traffic in Somali waters.

"About 90% of merchant vessels entering Somali waters are from the UAE," Andrew Mwangura, head of the Kenyan chapter of the Seafarers Assistance Programme, recently told local press. An increase in piracy acts would therefore noticeably affect UAE-based operators, even though African-bound routes represent only a small portion of total trade.

A US-Iranian showdown in the Gulf of Hormuz, on the other hand, would have a devastating impact on the entire UAE maritime industry, as ports on the Indian Ocean - Fujairah and Khorfakkan - are the only ones able to operate safely. On May 28, the US and Iran engaged in talks - for the first time since 1980 - which, although just covering the stabilisation of Iraq, are an encouraging sign that both countries are willing to avoid a direct confrontation.

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