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Wed 3 Oct 2007 04:00 AM

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Aqaba advantage

$500 million of investment is being thrust at the port area in southern Jordan and the country's merchant, marine support and logistics industries are advancing through Aqaba's achievements.

Jordan's southern seaport of Aqaba is at the heart of the country's logistics blueprint, and as such has been the focus of huge investment and redevelopment in recent years. At the core of this development is the Jordanian shipping community and a new, ambitious port development project at Aqaba Container Terminal (ACT).

Back in 2004 the Aqaba Development Corporation was launched as a private sector division of the Aqaba Special Economic Zone Authority and the government of Jordan. Ownership of key infrastructure assets such as the international airport, parcels of strategic industrial land - along with development rights, and, of course the container terminal was transferred to ADC and a massive US$3 billion tender initiative was put out to attract foreign investment.

We believe that the biggest challenge in the shipping industry remains finding the suitable personnel, whether at seaports or at shore - Ahmad Armoush.

The main port facilities were constrained by existing urban development projects so the decision was taken to relocate further south which offered the advantage of deeper waters with the freedom to expand port infrastructure. At the same time privatisation was pinpointed as the right vehicle to grow operations.

"The Jordanian government chose to privatise most of its services and infrastructure companies, and the port was one of the first, in order to achieve a better overall quality of service comparable to international standards and performance," explains Ahmad Armoush, group chairman, Jordan National Shipping Lines.

Middle Eastern ports have benefited hugely in recent years from the public-private partnerships that have blossomed across the region. The key player in the major projects at the Bahrain Gateway, Egypt's Port Said, and Oman's Port of Salalah is APM Terminals, and its presence is dominant again at the redeveloped and revamped ACT.

ACT currently handles 21 million tonnes of cargo annually, but the tie-up with APM Terminals is part of a long-term strategy to boost throughput and confirm Aqaba as a principal container transhipment hub for cargo bound for Egypt, Iraq, Syria and Saudi Arabia, as well as the growing domestic market.

The intention of the port is to specialise in handling trade from the Far East and South East Asia to this region. Syria's largest city and capital, Damascus, is 500 kilometres, or just seven hours drive by truck, with similar or shorter transit times to northern regions of Saudi Arabia. Aqaba has also long been a main port for the west and midlands of Iraq.

"The current capacity of ACT stands at around 800,000 TEU per year, however the masterplan we have in place will develop that to 3.2 million TEU by 2030," says Ihab Al-Rawashdeh, commercial manager, ACT.

The 25 year arrangement with APM Terminals appears to have achieved significant efficiency improvements in the three years since the contract was signed. Previously the terminal was operating at around 10 - 15 moves per hour. However, following significant hardware investments this year, the average has leapt to 45 moves per hour.

Since the tie-up ACT has introduced two new ship to shore gantry cranes at the terminal, bringing the total to five, and invested in eight rubber tired gantries (RTGs) taking the investment in the initial two year period beyond the $30 million mark.

The economic success story has not been limited to the port in Aqaba. Indeed, the merchant shipping and marine service sectors are playing a crucial role in the evolution of Aqaba's maritime industry. Jordan National Shipping Lines (JNSL), in co-operation with Lamnalco Sharjah and ADC has formed a joint venture to operate and manage the marine services at the port of Aqaba which launched at the second quarter of this year 2007. "This joint venture has been particularly rewarding to ship owners, and for the ports, whereby ships calling in Aqaba are being served within a maximum 30 minute window, and eight tug and service boats have been ordered," says Armoush.

The merchant fleet owned within Jordan is also on a mission to upgrade and further develop its presence within the Middle Eastern shipping scene. JNSL was the first national shipping company established in Jordan in 1976. The goal was, and still is, to develop the identity of the shipping industry in a country where it hasn't been a dominant force. Co-operation between owners has enabled that identity to grow, explains Armoush.
"A prime motivation for Salam International Transport and Trading Co (SITTCO), Petra Navigation and International Trading, and Arab Bridge Maritime has been to protect the industry by maintaining sufficient investment and interest," he says.

National ship owning is still limited to these companies, in addition to Messrs Hijazi who are specialise in livestock carriers. To enhance the position of these companies diversification is proving a key factor in future plans.

For many years JNSL has been successful in importing crude oil to Jordan, operating the 150,000 tonne shuttle tanker (M/T Star Hero) between Saudi Arabia and Jordan. "The challenge is still there for us to renew our fleet, and the policy taken by JNSL is to renew and expand the fleet in different directions in the maritime industry," says Armoush.

JNSL is already in the growth process and is currently building two Supermax vessels (53,000 tonnes each) in Vietnam, M/V City of Amman is expected for delivery in April 2008, and City of Aqaba in December 2008. In addition, the company is conducting discussions to finalise partnerships for four handysize bulkers of 32,000 dwt each, scheduled for delivery in 2009 and 2010.

Widening the net further, JNSL is looking to purchase chemical tankers, and crude tankers to service the Jordanian market. "We anticipate that the coming five years will witness significant expansion on all fronts, in addition to our announced interest to enter the container shipping market with the right partners," asserts Armoush.

The hardware component taken care of, there is of course the tricky business in the current climate of manning vessels and the supporting industries with talented employees. With this in mind the Jordan Academy for Maritime Studies (JAMS) was established in Amman in 2004. Largely the major partners, namely JNSL, Salam International Transport and Trading co. PLC, and Arab Bridge Maritime support the academy, however Armoush is keen to emphasise that work continues to obtain further support from the other local and regional relative firms.

"We are very proud of our academy, in fact a new building to accommodate more students has been completed this academic year in Shafa Badran, Amman." This year the academy has enrolled 120 students, with a view to graduating qualified seafarers, engineers and mariners. It also provides technical courses to marine personnel to keep them updated with developments in the maritime industry.

The academy is currently in discussions with regional and international universities for co-operation to enable continuos study programs and BA degrees.

"We believe that the biggest challenge in the shipping industry remains finding the suitable personnel, whether at seaports or at shore. If we are to succeed in our future plans for shipping, then a serious approach has to be taken to the recruitment and training issue," adds Armoush.

With a co-ordinated development plan for the merchant fleet, port expansion, and personnel development courses at full steam ahead, Aqaba has seized the maritime business with both hands. With the political situation and protective measures surrounding trade with Iraq set to improve the potential to tranship even more goods through ACT will open up. Given the short time frame, the achievements from 2004 to date have been nothing short of remarkable.

Investing $500 million at the port will draw in a considerable portion of trade to inland destinations through ACT, and the timeframe of 25 years allows for that development to follow and fluctuate in tune with demand. The future is looking bright on the western Arabian Peninsula, and the Jordanian plan seems to be delivering the right advantage to Aqaba.

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