Port of call: Expansion at the two main ports should boost transit traffic

The central location, large infrastructural capacity, and extensive road and rail connections of Côte d’Ivoire make it a natural gateway for trade to and from its landlocked neighbours: Niger, Burkina Faso and Mali. A decade of unrest, however, has weakened the country’s role as a transit gateway to the region and has seen the ports of Dakar (Senegal), Tema (Ghana), and Lomé (Togo) increase their share of the West African transit market.

Yet with the return of stability and sizeable expansion projects in the works – both in Abidjan and the western Port of San Pédro, the country’s primary gate for commodities and a portal to Liberia and Guinea – the medium-term outlook is encouraging.

Chief Port

The port at the economic capital of Abidjan remains one of the largest in West Africa by overall traffic, with a throughput of 21.5m tonnes in 2013, down 1% on 2012, according to the Autonomous Port of Abidjan (Port Autonome de Abidjan, PAA). The bulk of this is general merchandise, which at 13.7m tonnes made up 68% of total traffic in 2013, with the rest being shipments of oil and gas. While the general goods figure represents a fall of 6.4% over 2012, this was largely offset by an increase of petroleum products, which rose 10% to 7.7m tonnes (including 1m tonnes of offshore crude) in 2013, the latest for which data were available. Transit traffic grew by 13.3% to 1.8m tonnes, most of it coming from Mali and Burkina Faso.

New Container Terminal

Although the PAA has a potential annual container capacity of 1.1m twenty-foot equivalent units (TEUs), maintenance and productivity constraints limit its actual capacity to 800,000 TEUs, according to a study commissioned by the French Development Agency. A further limitation to throughput is the access point through the Vridi Canal, which is relatively shallow and narrow, permitting the port to accommodate only feeder ships and smaller vessels with a maximum draft of 11.5 metres and a maximum length of 250 metres.

With the aim of addressing these challenges and attracting more transit traffic, the PAA has launched a multifaceted expansion project, including the construction of a second container terminal and the widening and deepening of the Vridi Canal.

After a lengthy and heavily contested tendering process, the concession to build and operate the second container terminal for a period of 21 years was awarded in December 2013 to a consortium of APM Terminals (a part of Maersk Group), Bolloré Africa Logistics and Bouygues. The consortium, which runs the port’s existing terminal, has agreed to an initial investment of €120m and a fixed annual revenues payment of €22m. It plans to invest more than €400m in upgrades and new equipment, including six ship-to-shore gantry cranes and 15 yard cranes, according to Bolloré Africa. Scheduled to begin operations in 2018, the new terminal will boost the port’s annual container capacity by 1.5m TEUs, more than double its current potential capacity and nearly triple today’s actual handling capabilities.

The PAA, for its part, will be responsible for building 1100 metres of quay alongside the 37.5-ha shipyard and for the expansion of the Vridi Canal, the port’s only entrance point. The China Harbour Engineering Company has been chosen to carry out the large-scale construction component for the canal work at an estimated cost of €2bn, with partial financing from the China’s Eximbank.

Lowering Costs

Costs at the port are high, in part due to the requirements of its certification by the International Ship and Port Facility Security (ISPS). Yet these are set to decrease with better coordination between port entities. “The post-electoral crisis caused the suspension of certain exports and reduced calls at port for several months in 2011, which caused prices to climb as service providers sought to compensate for lost revenues,” Jean-Marc Yacé, director-general of shipping firm Eolis and president of the shipper’s union Syndinavi, told OBG. “Previously, shippers’ representatives had to deal separately with Customs, the police department, health inspectors, and so on, causing delays in turnaround times. But we are in the process of implementing an online single window portal to make administrative fees more transparent, to render the system more efficient and reduce costs,” he added.

Growing congestion on the port’s access roads, as well as the persistent problem of bribery on its highways, which increases the operational costs for transit traffic, pose other challenges for the port’s operators. Addressing these should unlock further growth potential for the PAA.

Oil & Gas

Significant deep-water oil and gas reserves are believed to exist off of Côte d’Ivoire’s eastern coast, with studies intensifying. As this begins to draw investors’ attention in the energy industry (see Energy chapter), it will also open up extensive opportunities for maritime shipping. Petrol products currently represent a third of all traffic through the PAA, and oil companies are starting to show interest in further exploration.

Abidjan already hosts the Carena shipyard, a large-scale maritime repair shop specialising in offshore oil and gas vessels. “Our position is strategic because we are geographically situated in the heart of offshore oil and gas operations, and 60% of our clients are in that sector,” Cynthia Ouattara, chief financial officer of Carena, told OBG. “The volume of demand is very high; there are lots of petroleum vessels, lots of oil rigs, and the numbers are increasing.”

Second Port

The country’s second-largest port, the Autonomous Port of San Pédro (Port Autonome de San Pédro, PASP) about 350 km west of Abidjan, saw roughly 250,000 tonnes of imports, 1.1m tonnes of exports and 2.9m tonnes of total trans-shipment traffic in 2013, this last a rise of 52.6% on 2012.

Anticipating a boom in oil and gas exploration, the PASP has announced plans to build a modern refined fuel terminal. With National Petroleum Company of Côte d’Ivoire as its main partner, the project will require an investment of $60m and take three years to complete, starting sometime in 2015. The new terminal will have a storage capacity of 50,000 tonnes, and will serve as a stocking and transit point for petrol products shipped from Abidjan facilities of the Ivorian Refining Company before they are transported to inland markets.

The project is a key component of San Pédro’s drive to diversify away from its primary exports of cocoa and coffee. The port has long been one of the world’s largest handlers of cocoa, of which Côte d’Ivoire grows roughly 40% of global supply. Yet with production of the bean set to slow in the years ahead – output in the 2014/15 season is forecast to fall by 3.5% year-on-year, according to market research – PASP is looking to capitalise on the raft of new activity expected in the extractive sectors.

Regional Presence

San Pédro is also well placed geographically to serve the export markets in neighbouring Liberia, Guinea and Mali. Current highway and rail extension projects in western Côte d’Ivoire will furnish the necessary overland network to facilitate rising traffic (see overview). Besides enabling PASP to tap into regional export markets, the new terminal will expand the port’s role as the economic nexus for western Côte d’Ivoire, where domestic fuel consumption has grown to 3m tonnes a year.

The strengthening links between San Pédro and neighbouring markets will enhance Côte d’Ivoire’s status as a regional gateway. Planned rehabilitation of the 1260-km rail connection between Abidjan and Ouagadougou, for example, will be a key factor in developing the country’s transit traffic. The container terminal at Ghana’s Tema port is constrained geographically and has limited potential for expansion in the near term; Abidjan’s increased capacity will thus make it highly attractive by comparison, particularly in turnaround times. All of the projects currently on the books are capital-intensive, yet if they are fully realised, their impact will be significant.