By Marcus Hand
OVERSEAS Port Management is looking to grab a 35-year concession to operate Aden Container Terminal as talks between the Yemeni government and 2005 tender winner DP World fail to bear fruit, writes Marcus Hand in Singapore.
DP World was selected as preferred bidder in June 2005, for the 35-year concession, investing $493m, and has been negotiating with the government to finalise the deal for more than a year.
Singapore company OPM, which has managed the Aden terminal on a short-term contract basis since 2003 when PSA International pulled out, is understood now to have been approached by the Yemeni government to submit an alternative long-term investment proposal.
Along with unnamed partners, OPM submitted an investment proposal to the government just before Christmas.
“OPM, together with its strategic partners and investors, are prepared to develop and construct a new berth of 350 m in addition to the existing 700 m berth to increase ACT’s handling capacity to 1.5m teu and more,” said MMJ Subramanian, chief executive.
“OPM has outlined its plans for the future development of ACT to the government of Yemen in recent weeks.”
One of the partners comes from the Middle East, but Mr Subramanian gave no further details.
Talks between DP World and the Yemeni government were reported to be in doubt in November with its parliament unhappy that the Dubai terminal operator runs competing projects in Djibouti and Jeddah. DP World was supposed to have started operating the terminal last September.
A DP World spokesman said that negotiations were still continuing.
In a sign of commitment to OPM, the Yemeni government has extended its management contract for ACT for another year. It is the first time OPM has had a year-long contract for the terminal, which it has been operating on short-term agreements.
OPM’s proposal would appear to be on a more modest scale than the $493m bid by DP World.
The plan is to build an additional 350 m berth equipped to handle post-panamax vessels at an estimated investment cost of $100m. In the longer term it could develop a further 1,000 m of quayside.
The Singapore terminal manager was one of the bidders in the earlier tender but did not get beyond the initial stages.
Mr Subramanian has plenty of experience at ACT, having worked for PSA running the terminal before the Singapore giant pulled out in 2003 after the terrorist attack on the very large crude carrier Limburg off the coast of Yemen the previous October sent insurance premiums skyrocketing and customers fled the port.
Additional war risk premiums hit as much $300,000 per vessel call but have since come down greatly, although Yemen remains on the Lloyd’s Market Association Joint War Committee’s list issued last August.
OPM has been managing the terminal since PSA pulled out and believes the security situation has improved.
Source: Lloyd’s List 5 January 2007