Port of call

Tony Douglas, CEO of Abu Dhabi Ports Company, has masterminded the development of the UAE’s largest infrastructure project and has managed to bring it in on time and under budget. He gives an insight into the final days of preparation ahead of Khalifa Port’s opening on September 1
By Shane McGinley
Sun 26 Aug 2012 10:26 AM

When Britain’s queen Elizabeth II inaugurated the $6bn
Terminal 5 at London’s Heathrow airport in March 2008, British Airways boss
Willie Walsh smiled as the UK’s largest free-standing structure was finally

Ten days later, when around 42,000 bags had gone missing and
over 500 flights were cancelled, the Irishman’s smile was long gone.

As Abu Dhabi counts down the hours before the official
opening of the $7bn Khalifa Port — the emirate’s largest ever infrastructure
project — Tony Douglas, CEO of Abu Dhabi Ports Company (ADPC), will be hoping
he doesn’t suffer the same fate as the beleaguered British Airways boss.

“On average we are doing about 1,700 tests every day at the
moment… This is a megaproject, the biggest megaproject in the region and it has
been deliberately kept low-key,” Douglas says with pride, having just come from
briefing Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi, on
the final steps under way before the big launch.

“The project is now complete. We go live and operational at
precisely 7 am on September 1,” an upbeat Douglas adds.

When asked how he plans to avoid the fate of Heathrow’s
Terminal 5, Douglas steals an infamous quote from former US Secretary of Defence
Donald Rumsfeld: “There are known knowns; there are things we know that we
know. There are known unknowns; that is to say there are things that, we now
know we don’t know. But there are also unknown unknowns — there are things we
do not know, we don’t know.”

“What you talk about, with big pieces of integration like
this, is that you meticulously plan,” Douglas adds. “You look at risks you can
sensibly identify and mitigate and then you test them rigorously.

“You try to simulate when things go wrong and how you can
recover, and we’ve done all that at Khalifa Port. Are we in as good a shape you
could ever possibly hope for? We think we are.”

Size matters when it comes to mega projects in the Middle
East and to put the epic scale of this opening into perspective, Douglas points
out that Khalifa Port and Khalifa Industrial Zone Abu Dhabi (Kizad) combined
are the size of a small country.

Around 420 square kilometres (sq km) in size, the project
will be four times bigger than Abu Dhabi island, two-thirds the size of
Singapore and will be a quarter the size of Greater London, stretching from
Canary Wharf to Slough.

While the opening of the port has been kept relatively
low-key, its long-term growth plans are anything but. The port will handle
about 800,000 containers this year compared with 767,000 last year which was
about a 45 percent increase on the previous year.

At present the main port in Abu Dhabi is Mina Zayed, but the
40 year-old facility is set to hit its capacity of 800,000 containers, just in
time for the entire container business to be transferred over to Khalifa Port
from the start of September.

“When we move [to Khalifa Port] on September 1, we will use
Terminal 1, which [can handle] two and half million containers… Then, when that
gets to be full, we will add Terminal 2… So five million containers plays
800,000,” Douglas explains.

Once demand has exceeded the first two terminals at Khalifa
Port, ADPC plans to expand further in the run-up to the emirate’s 2030 vision,
which presumes a GDP (gross domestic product) growth target of about $417bn.

“Capacity is for 5 million and… when demand fulfils
capacity, we will put another L-shape on [the port] and total theoretical
capacity in 2030 is 15 million [containers per year],” Douglas says.

However, he is realistic that the port does not want to
develop to full capacity straight away and growth will be in stages. “The smart
thing is to try and phase it as best you can… You wouldn’t put 15 million in
from day one.”

In 2009, about 60 percent of Abu Dhabi’s GDP was generated
from oil and gas, with the rest coming from other sectors. However, by 2030,
the plan is for that position to be reversed.

“There is four times more [potential non-oil and gas] GDP.
There are a wide range of sectors which will provide that growth: aluminium,
glass, steel, heavy engineering and targeted industry sectors which the 2030
Vision identified,” Douglas says.

Kizad was designed to supply around fifteen percent of the
non-oil and gas GDP in Abu Dhabi and Douglas says around 44 industry
heavyweights have signed up to lease land in the industrial zone, which will
add around $40bn to Abu Dhabi’s economy.

Leasing of space began in May and so far around two square
kilometres have been leased. A further eight square kilometres are in the final
stages of negotiations, while a total of 22 square kilometres is available for

Emirates Aluminium (EMAL) is Kizad’s anchor tenant. Its
smelter opened in December 2009 and the site features the biggest one-site
greenfield aluminium smelter in the world.

Silicon metal smelting company Al Braik Investments,
construction parts manufacturer Talah Board and logistics firm Al Batha Trading
& Industry Group are set to set up in Kizad and Sharjah aluminium
manufacturing firm Mulk Holding plans to launch in the near future.

“For an industrial zone to be successful, it needs three
factors,” Douglas. “Firstly, they need access to global markets and we have a
deepwater port and two international airports… Etihad Rail runs all the way
through the centre of [the site] and onto the port island, so it is the first
ever deepwater port to have rail running out to it.

“Second is low operating cost... Energy costs and power are
very competitive here. Third is ease to do business,” Douglas says of the
attraction of Khalifa Port and Kizad.

The site is expected to create up to 100,000 new jobs when
it is at full capacity, even though Khalifa Port will be one of the most
automated seaports in the world. Eagerly, Douglas traces out a container’s
seamless progress through the port.

Container number one comes along on the truck. An online
portal registers the container, processes all online bookings, and facilitates
payment of export and customs duties.

“If you are a frequent user, your trucking company will have
a radio frequency tag onboard which uploads your registration data,” Douglas
says. “When the truck comes along, the automated gate reads the data off the
tag and knows which container it is and knows it’s been customs cleared. It
checks it has all the appropriate approvals and the gate automatically opens
and you drive straight in. If any of that hasn’t happened the gate won’t open.”

After the gate opens, the truck and container is processed
through the facility.

“While Mina Zayed has a vast army of workers, Khalifa’s
high-tech system means the workforce is relatively low. We have about 450
people working on this shift [at Mina Zayed] at the moment. The comparison at
Khalifa Port would be zero,” he points out.

With this level of automation it also means security and
scanning has become faster and more efficient, Douglas says.

“New technology helps towards high-level screening,” he
says. “The parallel I would use is when you check in your suitcase [at the
airport] and it goes through five levels of screening. We have introduced a
screening method that has a similar methodology and which all containers go

“We also have in Khalifa Port some specific trace detection
gateways… Taking Heathrow as an example, even as a passenger when you go out
through the departure where you go to the declare and non-declare area, you go
through some big arches. Most people don’t know what they are but they are
nuclear trace detectors.

“So if you are carrying anything on you that has any small
level of radiation it will trigger. It is those kinds of technologies we have
in place [at Khalifa Port],” he says proudly, but refuses to elaborate on the
specifics of the nuclear-detecting technologies incorporated into the system.

In addition to security, a major hot topic for those developing
mega infrastructure projects around the world is the environmental element.
Khalifa Port is to be built beside the location of the Ras Ghanada Reef, a
seven-kilometre-long coral habitat, which is home to marine life such as
turtles, dugongs, dolphins, sea snakes and clownfish.

One of the biggest and densest coral reefs in the Gulf,
Douglas says ADPC has gone to expensive lengths to protect the unique area.

“It is a massive story here… This is not only a national
treasure this is an international treasure… The leadership was very clear from
the outset that this had to be protected.

“This was non-negotiable, this had to be protected and
consequently we had to design a scheme and engineer a solution that guaranteed
during the construction [that there would be no damage].”

In order to protect the coral, ADPC built an eight-kilometre
environmental breakwater and a one-kilometre causeway bridge linking the port
to the shore, which allows for continued current flow to the reef.

“We had, and still do have, the Florida Coral Marine
Institute and Al Ain University doing all the original surveys to determine
whether the condition of Ras Ghanada Reef has continued to be preserved,”
Douglas says.

“From a civil engineering point of view, it was a massive
marine sustainability project in the way it was engineered. It that hadn’t
existed you would have done it slightly differently… [The breakwater and
bridge] cost $240m. That gives you an idea of the investment and scale we are
talking about,” Douglas explains.

With a budget of AED26.6bn ($7.2bn), the money existed to
plan around the environmental obstacle and Douglas is very proud of the fact
that the project has so far come in under budget and is ready to be unveiled to
the public on September 1.

“What you can be absolutely sure about is we are inside the
budget…handsomely inside the budget,” he says, smiling.

Come 7am on September 1, when the green button is pressed,
let’s hope Douglas’ smile lasts longer than Willie Walsh’s.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.