Abu Dhabi set to pick firm for port land reclamation

26 July 2007

Dubai: Abu Dhabi Ports Company (ADPC) said it will pick a contractor to carry out land reclamation for the Khalifa Port and Industrial Zone (KPIZ) by early September.

Four consortia, which include UAE firms, are bidding for the dredging and land reclamation contract worth more than $1 billion, ADPC chief executive Ahmad Al Calily said.

"The bids are under review now. We should be able to make a decision by the end of August or in early September," he told Gulf News in a telephone interview. He, however, did not reveal the names of the consortis.

Island

The work includes creation of a 2.2-square-kilometre port island, located five kilometres offshore, and will take about 18 months to finish.

The estimated development cost of KPIZ, located in Taweelah between the cities of Abu Dhabi and Dubai, is more than $10 billion. The Abu Dhabi government hopes a significant portion of investment will come from the private sector.

"This is a big development and the only way it will succeed is if the private sector is involved as financier, operator and investor. It is our intention to bring in the private sector as much as possible," Al Calily said.

ADPC is a master developer of ports and trade zones. It was set up in 2006 to support Abu Dhabi's economic diversification efforts. HSBC is advising ADPC on the financing options available, including debt, equity and mezzanine structures.

"We will evaluate all options, whether it is bonds, conventional loans or sukuk. We have not decided on a funding structure yet," Al Calily said, adding that work on different elements of the plan was progressing well and the company was not in a hurry to seek funds.

Operations of Mina Zayed, Abu Dhabi's main port at present, will be shifted to KPIZ by 2009. As Mina Zayed has become encroached by urban development, the area will be redeveloped for commercial and real estate use.

Aluminium smelter

Another key component of KPIZ is a 1.4 million tonne capacity aluminum smelter called Emirates Aluminium (Emal), an equal venture between Dubai Aluminum and Abu Dhabi's Mubadala Development Company.

The smelter's $5-billion first phase will be operational in 2010 with a capacity of 700,000 tonnes a year. Another 700,000 tonnes of capacity will be added at a cost of $3 billion in the second phase, which is scheduled for completion three years later.

The smelter will have a gas-fired power plant of 2,250 megawatts.

KPIZ will cater to industries such as base metals, heavy machinery, shipyards, building materials, and food processing.