Port Construction Underway

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After months of evaluating bidders, the Abu Dhabi Ports Company (ADPC) announced on October 1 they had awarded the AED5.5bn ($1.5bn) turnkey contract for the initial phase of development of the new Khalifa Port.

The first step, in what is anticipated to be a five-step process, in the port's construction is to be completed by a consortium of Archirodon Construction (Overseas), Boskalis Westminster Middle East and Hyundai Engineering and Construction, collectively known as ABH. The project will focus on building some of the major infrastructure development of the port including dredging, land reclamation, rock works and quay wall construction.

The project, which began this month and is expected to be completed in late 2010, will start with the creation of a 260-hectare marine platform nearly 5km offshore, which will be made from reclaimed seabed material that will be dredged to create the harbour basin and the 16.5-metre deep and 12-km long approach channel. The project includes the construction of 3.2 km of quay walls, 7.3 km of breakwaters and revetments and a 4.6 km causeway connecting the offshore port to the onshore port facilities.

Upon completion of the first stage of development, the new port is expected to annually accommodate over 2m twenty-foot equivalent container units.

The decision to choose the ABH Consortium came after months of screening companies and evaluating bids for the tender. Ahmed Al Calily, CEO and managing director of ADPC, said, "The ABH consortium was selected from among four consortia with great records of experience."

Announced in spring 2006, the Khalifa Port and Industrial Zone (KPIZ), to be located in Al Taweelah, midway between Abu Dhabi and Dubai, is another step by the government to continue to diversify and build the emirate's economy. The port and adjacent industrial zone will serve as a key industry cluster and serve as the home base for a variety of manufacturing activities. The location of the new port will allow easy access to both Abu Dhabi and Dubai, and is an example of how the two emirates are working together and streamlining efforts to diversify and develop their economies.

The first stage of the industrial zone will cover 100 sq km of land for special economic and free zones dedicated to housing industrial, educational, commercial, residential and high-technology facilities. The industrial zone will also be home to Emirates Aluminium (EMAL), a joint venture by Abu Dhabi's Mubadala and Dubai-based Dubal. Already under construction, EMAL's aluminium smelter is expected to have a capacity of 1.3m tonnes per year when completed.

Khalifa Port will serve as a keystone in the KPIZ as it will be the main gateway for all cargo coming into the emirate and as a point of export for material produced in the adjacent industrial zone. Within five years, all sea traffic currently being served by Port Zayed will be transferred to the Khalifa Port.

When asked about logistics and harbour capacity, local analysts have said there is enough room for everyone. They stress the importance of a strong regulatory and management framework when speaking about the logistics industry; it is not enough to simply have world-class facilities and equipment. Soft services such as Customs and security procedures are as important, if not more important, as the logistic hubs themselves.

The ADPC has picked up on this notion and has contracted Dubai World subsidiaries, Dubai Ports World and Economic Zones World, to operate the port and the industrial zone. Calily told OBG that the agreement signed with DP World stipulates that Jebel Ali and Khalifa port will be operated as one mega port servicing both Abu Dhabi and Dubai.

The new port and industrial area will have a tremendous impact on the economy of the United Arab Emirates (UAE). "Khalifa Port will be one of the largest commercial and industrial ports in the region," Calily told OBG.

The UAE is already considered a world-class trans-shipment point, often being compared to locations such as Singapore and Hong Kong. The development of the KPIZ will undoubtedly solidify the emirates' importance in the global shipping industry and help to serve the industrial diversification efforts of both Abu Dhabi and Dubai. Calily told OBG that co-operation between the emirates will only strengthen the UAE's position as the leading logistics hub of the Middle East.

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