Abu Dhabi to take over Mina Zayed

Friday, Dec 31, 2010

Gulf News

DP World now off contract for port
Dubai Abu Dhabi Terminals (ADT) will take over management of Mina Zayed port from operator DP World after a five-year management contract was not renewed.

DP World played down the effect on profitability, saying in a statement to Nasdaq Dubai: The ebitda contribution from the management agreement is not material, speaking of earnings before interest, taxes, depreciation and amortisation.

Meanwhile, talks over DP World managing Khalifa Port have also not resulted in any binding agreement, ADT said in a statement.

Operations of Mina Zayed port are planned for transfer to Khalifa Port when it is launched in the fourth quarter of 2012.

We have worked closely with ADT and Abu Dhabi Ports Company over many years and we will continue to work closely with them into the future, Mohammad Al Muallem, senior vice-president and managing director of DP Worlds UAE operations, said in the statement.

Officials were not available for comment. However, analysts have said that revenues from the port did not have a lot of significance in DP Worlds overall operations that include 50 ports worldwide.

DP World last week announced that it would sell a 75 per cent stake in its Australian unit, which operates five terminals.

The deal with Citi Infrastructure Investors and a partner was for A$1.5 billion (Dh5.58 billion).

Initial capacity:
Khalifa Port, spread over 420 square kilometres, will have an initial capacity to handle two million 20-foot containers, rising to 15 million by 2030 when all phases are completed.

Efficient infrastructure supports economic growth and Mina Zayed and Port Khalifa and its associated industrial park when built, will contribute to the growth of Abu Dhabi and the UAE, Al Muallem said.

Tawfiq Al Mubarak, chairman of ADT, said a management team will continue to work closely with DP World to ensure a smooth transition.

Heavily invested:
A logistics analyst who requested anonymity told Gulf News: Abu Dhabi is heavily invested into the ports industry, especially with Khalifa Port.

They could be looking at this and saying we need to build indigenous capability rather than rely on someone else.

He said another possible reason could be that Khalifa Port would be geographically close to Jebel Ali Port and in the future would present competition.

Its not a good idea to have one company managing both ports and avoid conflict, he said.

DP Worlds shares rose 0.8 percentage points on Nasdaq Dubai yesterday and closed at $0.63.

Traded volumes were unusually low.

50 ports around the world are managed by DP World, and 75% stake in DP Worlds Australian assets are sold.

By Nadia Saleem ?Staff Reporter