Thursday, September 29, 2016

New Container Freight Port Deal Announced with Potential to Expand TEU Throughput and Logistics Uses

Chinese Influence in Middle East Expands with Joint Venture
Shipping News Feature
UAE – CHINA – Abu Dhabi Ports (AD Ports) has signed a container terminal concession agreement with COSCO Shipping Ports Limited (CSPL SPV), a wholly-owned subsidiary of COSCO Shipping Ports, which will see the Chinese firm operate the new Khalifa Port Container Terminal which offers a draft depth of 18 metres for box vessels, with 1200 metres of quay wall and adjacent land which might have a variety of freight and logistics related uses.

As part of the agreement, COSCO Shipping Ports and AD Ports will establish a joint venture company later this year to operate the new Khalifa Port Container Terminal 2 in Khalifa Port, one of the world’s fastest growing container ports and a leading hub for the Middle East, Africa and South Asia (MEASA) region. The joint venture company will be entitled concession rights of Khalifa Port Container Terminal 2 for a span of 35 years, with a renewable period of 5 additional years. CSPL SPV will have the controlling stake in the joint venture company with approximately 90%. AD Ports will have a 10% stake in the JV.

The first 800 metres of the quay length, and the corresponding Concession Area, at the new terminal is expected to commence operations in the first half of 2018 and the further 400 metres, plus the corresponding Expanded Concession Area, is expected to commence operations in 2020. Once the expansion areas are occupied, the Concession Area will span an area of approximately 70 hectares with 3 berths, which will add 2.4 million TEUs a year to the Port’s existing capacity of 2.5 million TEUs.

The agreement includes the option for a further 600 metres of quay length in the future to allow for anticipated volume growth, the nominal annual handling capacity will increase to 3.5 million TEUs when all phases are complete, creating a new overall annual capacity of up to 6 million TEUs. Wan Min, President of China COSCO Shipping Corporation Limited, said:

“Abu Dhabi’s Khalifa Port is a strategic hub along the ‘One Belt One Road’, as it has unique geographical advantage for the development of terminal and logistics businesses. Its well-developed transportation and nearby ample supply of cargoes are conducive to Khalifa Port, to become the next hub port in the Middle East region. Khalifa Port Container Terminal 2 will be the second overseas terminal in which COSCO Shipping Ports holds the controlling interest.

“This investment is expected to strengthen COSCO Shipping Ports’ sustainable growth and create value for our shareholders. With the strong support from the large container shipping fleet of COSCO Shipping Group, COSCO Shipping Ports will dedicate its efforts to develop Khalifa Port Container Terminal 2 as a hub of the Upper Gulf region in the Middle East for international container shipping liners. We are confident that the project will stimulate the implementation of ‘One Belt One Road’ initiative, and will promote strategic cooperation between China and the UAE.”