CI Online UK
Overseas Port Management is making its second attempt to bag Aden Container Terminal before a final agreement is reached between the Yemeni government and the official public tender winner, DP World.
The Singapore-based port operator said it had submitted a proposal to the government to build a 350m long new berth in addition to the existing 700m long berth in the Aden port. The proposed expansion will increase Aden’s handling capacity to 1.5m teu.
The move comes 18 months after DP World won a public tender, in which OPM also participated, to develop and operate the Aden port for 35 years.
However, the Dubai-based port giant has not been able to strike an agreement with the Yemeni government over contract terms since then, so OPM, which has been running the Aden Container Terminal after the government bought the terminal back from PSA in 2003, remains the operator of Aden.
“Our proposal went in to the government during Christmas. It will be good if the new berth can be ready in three years time,” said chief executive MMJ Subramaniam in an interview today, stressing it all depends on whether the government accepts the proposal.
Mr Subramaniam added that the project would involve investment of around US$100m.
“We are able to fund the project all on our own, but we are also in talks with several strategic partners and investors to co-operate on the project and to bring in expertise.”
Potential partners include a Middle Eastern group and some logistics players, according to Mr Subramaniam.
Meanwhile, a director of the Port of Aden under the Yemen Port Authority told ci-online that the Ministry of transport had accepted the terms offered by DP World, however, the terms must also be approved by parliament.
“The government can reject it [DP World’s proposal] anytime, and there is no commitment,” he said.
Earlier media reports suggested DP World’s investments in nearby terminals, such as Jebel Ali and Djibouti, and the longer-than-usual concession period of 35 years aroused concerns among the Yemeni lawmakers.
Meanwhile, a DP World spokesperson said that the negotiations were still going on.
In a good sign for OPM it has just been awarded a new contract to run the terminal for another year.
“We’ve been doing good,” said Mr Subramaniam. “OPM accumulated an EBITDA (earnings before interest, taxes, depreciation and amortisation) of some US$17.5m over the past three years for the ACT.”
“The EBITDA per teu were higher than the world’s average of US$12 in the past two years, at US$18-20,” added SC Chak, Executive VP of OPM.
Throughput of ACT rose 26% year-on-year to 350,000 teu in 2006, trebling the 2003’s figure of 117,488 teu, and the port operator is optimistic about the terminal’s prospects.
“Looking at the volume coming in from the region, we expect the port to grow at 10% this year,” said Mr Subramaniam.
ACT is called at by seven carriers, namely Hapag-Lloyd, Evergreen, COSCON, K Line, Wan Hai, PIL and APL. It is on the Lloyd’s Market Association’s war risk list, among other Middle East states, such as Iraq, Isreal, Lebanon and Saudi Arabia.
A terrorist attack on the French oil tanker Limburg in 2002 paralysed the traffic at Aden port leading to the withdrawal of the then operator PSA in 2003.