Two thousand and thirteen will be a year of consolidation following the implementation of a series of game changing developments for Dammams King Abdul Aziz Port (KAAP) last year.
That is the view of Naeem al Naeem, the director general of the strategically-located KAAP, the largest port on Saudi Arabias Gulf coast and the main gateway through which cargoes from all over the world enter the kingdoms Eastern and Central provinces. The ports significance to the massive oil, gas and petrochemical industries in the Eastern Province, as well as the booming consumer markets in Riyadh and the Dammam-Al-Khobar corridor, is immense.
Last year was all about increasing container capacity and additional bulk capacity in the port so we were very busy as we set in motion our plans to develop and build the port to the highest standards of service and modernity for the future, Al Naeem says in an exclusive interview with The Gulf at his Dammam office. Now, we are completely focused on ensuring the various projects we have initiated are delivered in a satisfactory way.
At a ceremony on 6 October last year, the foundation stone for a second container terminal at KAAP was laid by Saudi transport minister and chairman of the board of the Saudi Sea Ports Authority, Dr Jubarah bin Eid al Suraisiry. It was, admits Al Naeem, a highlight for the year.
The SR2 billion ($533 million) project is being run by Saudi Global Ports LLC (SGP), a joint venture between the kingdoms Public Investment Fund (PIF) and PSA International, which operates the Port of Singapore. SGP has a 30-year BOT [build-operate-transfer] contract to develop and manage the new terminal, which represents PSA Internationals first foray into port infrastructure in the Gulf. Al Naeem says the project also reflects PIFs keen interest in the kingdoms transport sector.
The EPC [engineering, procurement and construction] contract for the first phase of the terminal construction which will be built on reclaimed land on the western side of the port was awarded to China Harbour Engineering and calls for six berths along a 600 m long quay wall with an alongside depth of 16 m sufficient to handle 16,000 teu, or tonne equivalent units, vessels. The first phase, which is scheduled for completion in late 2014, will include 450,000 sq m of onshore facilities. It will add 900,000 teu capacity to KAAP.
Plans for phase two of the terminal are awaiting go ahead. When completed the new terminal will be able to handle a total of 1.5 million containers a year.
Meanwhile International Port Services (IPS), the established operator of KAAPs existing container terminal, will inaugurate an additional 900,000 teu capacity terminal development this April, bringing its total throughput capacity up to 2.5 million containers. All in all the port is on track to expand its container capacity to more than four million teus by the middle of the decade.
However, Al Naeem is quick to note that KAAPs expansion plans are not limited to container movements. A number of multi-million [Saudi] riyal contracts were signed last summer to expand and develop other aspects of the ports facilities.
The first of these is an SR170 million ($45.3 million) contract for the construction of two new berths for bulk cargo handling and associated warehousing, awarded to Huta Hegerfeld Saudia, which will increase the ports grain handling capacity to 16 million tonnes per year.
Meanwhile, the local Al Balagha Trading Group signed an SR53 million deal to lease the King Fahd Shipyard for a period of ten years, a development that is key to attracting more shipping lines to the port, according to Al Naeem.
A third contract, at a cost of SR94 million, was granted for cleaning and general maintenance services at the port for three years.
There was also significant investment of SR615 million set aside for infrastructure to support the ports expansion, including the construction of an SR190 million power plant which will increase KAAPs power generation capacity from 50 megawatts (MW) to 120MW; creating a building for government departments at the port; improving the main gate and adding tracks and new facilities to improve entry for trucks. A new highway bridge is also being built to alleviate severe traffic congestion the increasing volumes of cargo put through KAAP is creating.
The delivery of these additional infrastructure projects cannot arrive too soon. According to official statistics released by the Saudi Ports Authority (SPA) for 2012, KAAP is experiencing huge increases in cargo movements.
According to Al Naeem, total merchandise handling increased by about six per cent during 2012 compared to the same period the year before. Imports weighed in at just under 21.5 million tonnes, compared to about 19.4 million tonnes in 2011, an increase 11 per cent. Container movements, meanwhile, increased three per cent, reaching approximately 1.619 million teu in 2012.
The major categories that drove these increases over 2011 included cement, which was up 55 per cent, followed by steel with a 23 per cent increase and construction materials (26 per cent). On the export side other agricultural products rose by 126 per cent year-on-year in 2012.
KAAPs apparent progress was further endorsed by the re-establishment of the weekly West Asia Express (WAX) service, operated by global shipping line APL, into Dammam, with the first vessel arriving on 7 December 2012, and laying down yet another marker for 2013.
