Buoyant Mood

What does Khalifa Port signify for Abu Dhabi?

Abu Dhabi’s Zayed Port has served the city for the last 40 years, but in 2011 it reached 767,000 TEUs, above its intended capacity of 750,000 TEUs. Now at handling capacity, a new, modern port with room to grow was needed. The answer was the new flagship, state-of-the-art Khalifa Port. Located at Taweelah, Khalifa Port is the new gateway to Abu Dhabi. It has an initial capacity of 2.5 million TEUs, with space to expand according to demand. Today, it handles all of the container traffic for the Emirate, supporting its long-term vision of strong, sustainable economic prosperity. Abu Dhabi Ports Company (ADPC) was formed in 2006 from the restructuring of the Abu Dhabi Seaports Authority, and is the master developer of ports and industrial zones in the Emirate of Abu Dhabi. Our ports, which include Khalifa Port, Zayed Port, and Musaffah Port, as well as the Western Region ports, such as Delma Port, Sir Bani Yas, and Al Sila, all provide vital infrastructure for the maritime industry, promoting the flow of imports and exports while supporting local communities, sustainable businesses, and the wider economy.

How will Khalifa Port and Khalifa Industrial Zone Abu Dhabi (Kizad) complement the other two zones already present?

Khalifa Port and Kizad are two valuable new additions to Abu Dhabi’s commercial maritime infrastructure; they are new elements that complement the existing ports and facilities in the region. While Khalifa Port is the main hub port, all ADPC ports and facilities will work together to support the Emirate’s growing maritime trade and develop its status as a global trading hub. The megaproject that is Khalifa Port and Kizad has been deliberately designed to be an industrial-focused zone, rather than just a free zone. While we have allowed for and do provide a free zone at Kizad to cater for a variety of investor interests, our main focus is attracting industry-related investors to Kizad’s vertically integrated clusters, where raw materials will be used by midstream producers and downstream manufacturers and then exported via the excellent transport links, which include, road, air, rail, and, of course, sea. ADPC is bringing a new proposition to the table with Kizad’s dedicated industrial production, logistics, and distribution zone, which supports both Abu Dhabi’s 2030 Economic Vision and its future international ambitions. But, ADPC is investing in and developing all of the Emirate’s non-oil ports. For example, we have invested in a new 53-kilometer-long channel to serve our port in Mussafah, which is a thriving industrial area on the outskirts of Abu Dhabi city. The new channel is the second largest in the region after the Suez Canal and is capable of handling far larger ships, which will help support industrial and business growth in this important area. Of course, Khalifa Port will claim a lot of the plaudits as ADPC’s flagship facility. With Khalifa Port, we can now offer shipping lines the region’s only deep-draft, semi-automated container terminal and integrated port. In addition, we can also confirm that it will be the very first port in the UAE to be integrated with the new intra-Gulf countries rail network, which is currently being developed by Etihad Rail.

What trends have you noticed in incoming vessels?

Vessel movements into Abu Dhabi increased in 2012, and our most recent results for Q32013 indicate that there have been just over 9,000 vessel movements this year. It should be clear that while Khalifa Port will become the hub port, Zayed Port, which has served Abu Dhabi for the last 40 years, will continue to serve the UAE’s capital in most areas, aside from container shipments. Because of its size and draft, Zayed Port was never a hub port; it was always a feeder port. That is why the size of the vessels and the profile of the vessels we are now seeing are different from the ones of previous years. The first vessel that entered into Khalifa Port carried around 12,000 TEUs. This would never have been possible at Zayed Port. In addition, there were only three main ports that were served directly from Zayed Port and about 70%—80% of the maritime volume handled was feeder traffic coming from Jebel Ali. Today, just one year on from the launch of commercial operations, Khalifa Port serves 17 shipping lines, offers 18 direct destinations with direct links to more than 40 international destinations, and offers customers a global reach through direct links to the word’s hub ports. This increased connectivity is valuable to our customers and is, as a result, changing the dynamic of what cargo is handled, as well as the volume of vessel movements coming into the newly operational port.

How important is the trade increase between Africa and the GCC for ports in the UAE?

People are talking about shifts of trade from West to East, but I think it is clear that there are a number of trading shifts taking place globally, and I think it has happened faster than anybody anticipated because of the financial crisis. The shifts are happening from the North to the South and from the West to the East. There is more trade between Africa and Asia and the inter-Asian markets and, as this is happening, I think Abu Dhabi, and the region in general, is in the right place to cater for such a change. Of course, it requires the right infrastructure to support and guide such shifts to your ports. Abu Dhabi has long been serving the trade between Europe and Asia, as well as servicing trade between Africa and Asia, but, with the new infrastructure in place, this can now take on a more global dimension going forward.

How would you compare Khalifa Port to Asian ports such as Singapore?

I think we are moving in the right direction. ADPC, the government, and other governmental institutions are all determined and focused on being recognized as world-class entities. We are all working together closely to achieve this. ADPC is also working closely with Singapore and Hong Kong and other ports in Asia to identify best practices and operational management excellence. For our part, we see ourselves as being in the same category in that we can offer world-class facilities; however, we have only just started. In terms of Khalifa Port, we cannot compare ourselves in terms of volumes to the first or second busiest port worldwide—not yet anyway. One of the best benchmarks to assess Khalifa Port’s operational efficiency is to compare ourselves in terms of how many containers we move hourly. If you look at some of the ports in the region, you will see that they are trading between a maximum of 24 and 26 container movements per hour. However, in July 2013, our concession operator, Abu Dhabi Terminals, achieved its highest crane production rate with 43.3 moves per hour. The port also handled 81,000 TEUs in July, the most ever handled in one month in the Emirate, and in August the terminal achieved a work production rate of 142.4 moves per hour, placing it in the global top 10 for productivity. These figures are important; they make the port an attractive proposition for shipping lines, which are heavily focused on fast and efficient turnaround times in port. As a result, ADPC sees this as a key selling point for winning more business in the future.

How do you plan to sustain these high targets while competing in a market that is dependent on the global economy?

In terms of growth, we don’t just have Khalifa Port; there is also the projected growth of the Kizad industrial zone. With the first-phase infrastructure in place, and many international investors already committed to long-term leases of up to 50 years, Kizad will certainly be a key driver of economic progress for the Emirate of Abu Dhabi and will help the government achieve the targets set out in the Abu Dhabi Economic Vision 2030. Of course, ports all depend on, and are subject to, shifts and changes in international trade, and we must stay vigilant knowing that our success in attracting new business cannot be allowed to become a matter for complacency. However, ADPC has the right facilities, excellent infrastructure, and cutting-edge technology as well as highly efficient procedures in place, and so all of the key ingredients to be a significant maritime hub are there.

© The Business Year – November 2013