Egypt to get megaport at Damietta

2007-12-3

KGL International Ports announced a megaproject of a new modern container terminal (port) at Damietta in Egypt.

KGLIP is a member of Damietta International Port Company (DIPCO), a very unique group of owners from several countries and continents who merged together and created the DIPCO.

They all provide a unique example of value added partnership as a major contribution to the success of the project. These companies are DPA-Egypt, KGLIP-Kuwait, Aref Investment Group-Kuwait, CMA-CGM-France, China Shipping-China, GE-USA, UASC-GCC and Iraq. All from DIPCO are board members and shareholders in the project. KGLIP is a major shareholder in the project and therefore is also managing the project.

On November 26 a celebration was held in Egypt after placing the corner stone of the project duirng which Mohamed Mansour, the minister of Transportation, attended. Mohamed Al-Mazeedi, the chairman and CEO of KGL International for Ports Warehousing and Transportation, said the project will be the biggest in the Mediterranean Sea.

The total cost of this project is US$680 million, fully provided by the private sector with DIPCO's capital amounting to $200 million. A financial agreement was signed with AUB Bank and ABC (Arab Banking Corporation-Egypt) Bank to finance $480 million of the project on September 22.

The first phase of the project will start commercial operation in November 2008, the second phase in February 2009 and the third in May 2009.

The investment totally covers the design, construction and equipment of the terminal, including the infrastructure as well as the superstructure.

Talking about Egypt as a location and Damietta in particular, Al-Mazeedi stressed that the development of the economy in Egypt is stable and strong which creates a solid base. He said Egypt has an excellent location for ports usage and accessibility. The economic, political and the administrative reforms of the country and the positive foreign investment treatments as well as an educated Egyptian workforce make it a preferred choice.

He said Damietta is at a strategic location - not very far or near from the Suez Canal. It's within the modern ports in Egypt and in the Mediterranean sea.

Fadhel Albaghli, vice-chairman and COO at KGL International Ports said the company has been working on this project since three years ago. This terminal is expected to reach its design capacity of 2.5 million TEUs during the first couple of years of operation and proceed to the second phase soon after to increase its capacity to over four million TEUs.

This new terminal will accommodate huge ships in the world that work on 17.5m to 18 m draft, about 2,500m in quay length which can handle over four million TEUs with the aim of handling 36 containers per hour. There will be 22 STS cranes, 14 of which have been ordered from Doosan in Korea and are scheduled to start arriving by the middle of next year. 30 RTGs which have been ordered from Mitsui in Japan will start arriving on the site by the third quarter of next year.

The terminal will provide around 8,000 job opportunities with direct permanent employees of over 1,000 people, majority of whom will be Egyptians. There will be a training centre for the workers at the port.

Robert Sousa, managing director at KGL, said the project is major and critical. The project will be operated for 40 years on a BOT system. Financing the project will be for 19 years and a probationary period of four years. The payback of the project is usually 11 to 15 years but according to studies it will not exceed eight to nine years which is a record time.

Kenneth Bedward, chief commercial officer at KGL International Ports claimed the new port will be working mainly 80 percent on transhipment.

The terminal will be one of the largest in the world with a capacity to accommodate big vessels. It has signed contracts with four of the biggest shipping companies who will be using the new terminal ĘC United Arab Shipping and its GCC subsidiary, China Shipping Company, CMA CGM and Irisl, an Iranian shipping line.

Source: Cargonews Asia
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