Added infrastructure: Developing capacity on the sea and in the sky

The future of Aqaba’s economy depends partly upon the development of its transport infrastructure, with industry and tourism reliant on the effectiveness of transport links. And as the Gulf of Aqaba’s largest city and Jordan’s only seaport, the implications of its trans-port industry spreads well beyond the local economy.

Aqaba Port is key to the city’s transport infrastruc-ture. Located in the Aqaba Special Economic Zone (ASEZ), the port areas are composed of a bulk termi-nal referred to as the Main Port, a number of contain-er terminals known collectively as Aqaba Container Terminal (ACT) and an industrial port situated in the south section of the port area. The operation, devel-opment and maintenance of the port area are carried out by the Aqaba Ports Corporation (APC), a govern-mental agency established in the early 1950s. The port areas are owned by the Aqaba Development Corpora-tion (ADC), a private shareholding firm set up in 2004 and jointly owned by the government of Jordan and the Aqaba Special Economic Zone Authority (ASEZA).

INDICATORS: According to APC figures, the Aqaba Port areas cover nearly 1.7m sq metres of land and an addi-tional 380,000 sq metres of sea. The Main Port is pri-marily used for handling general cargo, phosphate, grain and lighter traffic, and it includes 10 berths offer-ing a total berth length of 2050 metres, according ASEZA. Six of the docks are general, deep-water berths and stretch 1060 metres in length, serving ships weigh-ing up to 70,000 deadweight tonnes.

Administration and management of the ACT is the responsibility of APM Terminals, a division of Denmark-headquartered AP Moller-Maersk Group. The ACT is composed of three container berths measuring 180 metres in length and one roll-on, roll-off berth at 40 metres in length, as per ACT figures. The terminal’s maximum channel depth is 24 metres and its maximum berth depth ranges from 14.5 metres to 20 metres.

PERFORMANCE: The ACT performed well over the past two years, registering a 16% year-on-year growth rate in 2011 and 2012, according to data provided by the terminal. About 600,000 containers passed through the ACT in 2010, and the ACT aims to expand this fig-ure to 900,000 containers by the end of 2013 – an increase of 50% over the three-year period. Currently, the central aim of the ACT is to expand operations by gaining increased access to the Iraqi shipping market, as well as by diversifying into other markets.

NEW PORT AREA: The most important development for Aqaba’s seaport industry is the planned construc-tion of a new port area. Set to be located in what is currently the southern industrial seaport, the new port zone will include a number of additional facilities, and cargo operations at the Main Port are expected to eventually be relocated to this new site. Expansion of the container and industrial ports is also planned as is the relocation of some of the container and industri-al port activities to the new maritime zone.

The ADC has announced a number of tenders for the new port project. The first, a maritime works package, focuses on tasks such as reclamation, dredging and building several berth structures. BAM International, a construction firm headquartered in the Netherlands, and the Jordanian MAG Engineering and Contracting Company formed an agreement with the ADC in 2011 to carry out the maritime works projects. A second package calls for a new grain terminal and involves constructing storage silos, truck-loading facilities, ship unloader gantries, a bagging plant, and intake and out-take equipment, among other projects. A third pack-age focuses on development onshore, and includes the construction of buildings and other infrastructure.

Not only is the new port zone set to help develop Aqaba as a cargo and logistics centre in the region, the planned maritime facilities will aid the development of the tourism and real estate sectors. Completion of the new port zone will include the transfer of heavy indus-trial activities away from tourism-oriented areas of the city and land from the current port area will be used for the real estate project Marsa Zayed. With construc-tion already under way, the development will include residential units, hotels, retail and commercial space, marinas, entertainment facilities and a cruise terminal.

TO THE SKIES: Another key component of Aqaba’s transport infrastructure is King Hussein International Airport (KHIA). Construction on the airport started in the late 1960s, and the facility became operational in 1972. KHIA is owned by the ADC and has been oper-ated, managed and developed by the Aqaba Airports Company (AAC) since July 2006. The National Aviation Services (NAS), a Kuwait-based company, handles the KHIA’s cargo operations. The airport has no operational limits and maintains an open sky policy.

In its original form, the KHIA contained a small pas-senger terminal and parking apron in addition to a run-way and fire station. The airport currently includes a runway stretching 3000 metres by 45 metres, a pas-senger apron measuring 425 metres by 90 metres, and a cargo apron covering 600 metres by 200 metres.

The KHIA’s passenger terminal houses departure and arrival areas, both of which offer 1500 sq metres of space and contain a peak-hour capacity of 200 pas-sengers, according to AAC data. The NAS reports that the airport’s cargo terminal provides warehouse space covering approximately 6000 sq metres and office space totalling 1500 sq metres.

Recent AAC figures indicate that the airport received nearly 87,000 passengers in the first 10 months of 2012. The largest percentage of these travellers – more than 50% – flew on Royal Jordanian, the kingdom’s national air carrier. Domestic travel through the KHIA was relatively constant throughout the first 10 months of 2012, while international flights peaked in March, September and October.

On the cargo side, operations have increased dramat-ically in recent years. Roughly 1300 cargo aircraft land-ed at the KHIA in 2012, compared to 300 planes in 2005, according to NAS data. Military shipments account for about 70% of cargo activity at the airport, while food, pharmaceuticals and various other goods make up the remaining 30% of operations. The AAC reports that revenue for the cargo terminal jumped from JD37,500 ($52,700) during the first three quarters of 2010 to more than JD281,000 ($395,000) during the first nine months of 2012 – an increase of more than 650%.

FURTHER UPGRADES: Efforts are also under way to upgrade and improve the KHIA. A project to renovate the airport’s passenger terminal began in 2012 and is scheduled to be completed in 2013. The AAC expects to spend about JD8m ($11.3m) on the project. In 2014 the AAC plans to develop the airport’s taxiways, aprons and drainage system, in addition to other projects. The majority of these developments will be completed in 2025 and the AAC is predicting expenditure in the region of JD24m ($33.8m) to complete them. The AAC aims to begin construction on a new terminal building in 2022. According to figures provided by the AAC, the terminal project should cost approximately JD20m ($28.1m) and be finished in 2025.

As the KHIA implements expansion and improve-ment projects, operations at the airport are becoming increasingly profitable. The AAC recently reported that 2012 was the first year the company made a profit, and earnings are expected to increase as the airport con-tinues to attract heavy investment and large numbers of tourists. In addition, other factors such as the Aqa-ba seaports and the local real estate sector are play-ing a significant role in the growth of KHIA.

IN THE WORKS: Transport links in Aqaba should improve further with the planned addition of a railway. The Min-istry of Transport indicated in September 2012 that it was preparing to float a tender for a railway project that would connect Aqaba with phosphate mines in Shidiyeh. The project will be the first step in achieving the king-dom’s aim of building a national railway network. Fig-ures cited by The Jordan Times, a local English-language daily, note that the project should take 18 months to complete. A railroad already links Aqaba with Batn Al Ghool to its west, and operations of this line are man-aged by the Aqaba Railway Corporation.

An upgraded airport, rail network and seaports area will benefit the local logistics industry significantly – a sector that is already performing well in Aqaba. The cur-rent strength of the logistics industry can be partly attributed to political stability in Jordan and various lev-els of unrest throughout the region, making Aqaba an obvious transit choice. The port city’s logistics segment could capitalise on the favourable conditions to an even greater extent via increased collaboration and cohesion between local businesses and organisations.

One of the industry’s key players is the Aqaba Logis-tics Village (ALV), an integrated logistics facility locat-ed within the ASEZ. The ALV’s total investment value is estimated at $60m, and the project is being developed over three phases. Construction on the first phase began in 2007 and was finished in 2010. The village will eventually provide six warehouses measuring 10,000 sq metres each with additional office space and open yards, according to the ALV. The new logistics centre currently offers a range of facilities and services, includ-ing a distribution centre, a container freight station, spe-cialised warehousing options for hazardous cargo or goods that need to be kept cold, a facility for contain-er repair and an exhibition centre.

Recent efforts at the ALV have focused on cross-dock-ing, which is the direct transfer of goods and materi-als from incoming to outgoing vehicles, minimising the need for storage. As a result, handling costs have been reduced through more efficient loading processes.