Shipshape: Khalifa Port and the linked industrial zone are transforming the sector

Home to one of the newest and largest ports in the Middle East, Abu Dhabi’s reputation as a logistics and industrial centre for the Gulf is on the rise. Khalifa Port, which opened for business in September 2012, has the potential to transform the emirate’s economy over the coming decades. The new Khalifa Industrial Zone Abu Dhabi (Kizad), which was developed in conjunction with the new port, aims to attract domestic and multinational export-oriented industrial companies, with the goal of boosting activity in the non-oil sector and, consequently, contributing to increased economic diversification. According to projections published by Abu Dhabi Ports Company (ADPC), the government-owned firm that developed both Khalifa Port and Kizad, by 2030 the project will contribute 15% of Abu Dhabi’s non-oil GDP and employ many thousands of people.

History

 The UAE in general, and Abu Dhabi in particular, has a long maritime history. Prior to the discovery of oil in the 1950s, fishing and pearl diving were major local industries, and a considerable percentage of the population spent months at sea every year. Numerous small-scale ports and boatyards dotted Abu Dhabi’s 400-km coast during this period. Thus, the development of Khalifa Port and the clear potential for the emirate to become a major maritime centre in the coming years in some senses represents a return to tradition.

In 1972, less than a year after the UAE was formed, the government completed work on the 535-ha Zayed Port, which served as the emirate’s primary gateway for general cargo and containers until Khalifa Port came on-line in late 2012. When the port was established in the early 1970s, Abu Dhabi had very little local industrial production, and so Zayed Port primarily handled imports. The government built a container terminal at the port in the 1980s, and a cold storage facility in 1999. As a result of surging local economic activity, in the early 2000s the port saw an uptick in exports, which strained port infrastructure and led to steadily increasing congestion in the surrounding neighbourhood as a result of a rapid rise in port-related truck traffic.

As of mid-2013, Zayed Port – which has 21 berths ranging in depth from 6 to 15 metres – continued to handle the majority of the bulk cargo coming into Abu Dhabi, though its role as a cargo port is expected to decline as Khalifa Port takes on a bigger role in the coming years. In an effort to capitalise on the port’s central location on the north-east coast of Abu Dhabi City, ADPC is now working closely with the Abu Dhabi Tourism and Culture Authority to establish Zayed Port as a luxury cruise ship terminal and home port.

A New Gateway

The development of Khalifa Port has been under way since 2006, when the emirate’s government established the ADPC with a mandate to design and build a new port to replace Zayed Port, which was quickly approaching capacity.

The new port project was developed and built with the participation of a number of major international players, including US-based firm Bechtel, Dutch company Royal Boskalis Westminster, Greek firm Archirodon Construction, and South Korean company Hyundai Engineering and Construction, among others.

Khalifa Port is located on 2.7-sq-km of reclaimed land situated 4.5 km off the coast of Taweelah, a site some 60 km north of the city of Abu Dhabi and 75 km south of Dubai. The port is located within an hour’s drive of a number of other major transport and logistics centres, including Abu Dhabi International Airport, Dubai International Airport and Dubai’s Jebel Ali Port, which is one of the region’s major trans-shipment hubs. With a 4-km quay wall and a 16-metre draft, Khalifa Port is capable of handling some of the largest ships in the world. From the end of 2012, its container terminal, which is the first semi-automated terminal in the region, was up and running, and handling all of Abu Dhabi’s container traffic. Zayed Port, meanwhile, has continued to handle most of the emirate’s general, roll-on/ roll-off, cruise vessels and dry bulk cargo.

Though Khalifa Port opened for business in late 2012, it is expected to continue to add capacity in phases as needed, through to 2030. “As a result of an expected increase in activity over the next several years, the new port facility was developed to have an initial design capacity of 2.5m twenty-foot equivalent units (TEUs) and 15m tonnes of general cargo,” Martijn van de Linde, the CEO of Abu Dhabi Terminals, told OBG. Provided activity at the port continues to grow, by 2030 Khalifa Port will reach a total capacity of 15m TEUs and 35m tonnes of general cargo, at which point it would be one of the world’s largest ports.

In its first 12 months of operation, as of September 1, 2013, Khalifa Port served 18 shipping companies and provided direct services to more than 40 ports around the world. In August 2013, and in October the terminal handled just over 100,000 TEU in one month, the most ever handled in one month in the emirate.

As of September 2013, a truck spent an average of around 15 minutes in the port to pick up or drop off a container, down 64% from September 2012. Similarly, the time it took to load or unload a ship at the port had been reduced by 35% over the same period. On average, around 35 containers are handled every hour, according to Van de Linde.

Linked Industrial Zone

 Kizad is located in Taweelah, just off the Abu Dhabi-Dubai highway on the mainland opposite Khalifa Port. While only a small fraction of the zone’s dedicated land is currently in use, the project is expected to eventually cover a 418-sq-km area. Incentives on offer at Kizad include low land and utility costs, easy access to the port and, in some areas, free zone status. The zone is working to attract companies involved in a handful of industries, including aluminium, steel, engineered metal products, petrochemicals and chemicals, pharmaceuticals and health care equipment, food, paper, print and packaging, and trade and logistics. Each industry will be organised into a vertically integrated cluster within Kizad, with the goal of maximising value along the production chain. This cluster model is widely considered to be one of the zone’s key competitive advantages.

Other Ports

 In addition to Khalifa Port and Zayed Port, the ADPC is responsible for managing and developing a number of smaller ports, including a port at Mussafah, to the south-east of the city of Abu Dhabi, which serves the industrial area there, and several small-scale fishing, logistics commercial and leisure ports along the coast. As of early 2014, the company was moving forward with plans to develop two ports in Al Gharbia, Abu Dhabi’s western region. In August 2013 ADPC announced that it would invest Dh17m ($4.6m) to upgrade the fishing port in Marfa, which is located 125 km west of Abu Dhabi City, and in September it revealed a Dh2.5m ($680,500) project to build a new wharf on the island of Delma, 40 km off the coast of Al Gharbia.