The reputation of Jeddah Islamic Port has taken a battering over the past two years. The second-largest port in the region, after Jebel Ali Port in Dubai, Saudi Arabia’s principal marine gateway has been plagued by delays and operational problems that have threatened to bring the site to a standstill -during peak periods.
But the port authorities are hoping recent developments will turn the tide. The port’s $443m third terminal, the Red Sea Gateway, will become fully operational in the first quarter of next year, after receiving its first ships in early November 2009.
The facility will add capacity of 1.5 million 20-foot equivalent units (TEUs) to the port, taking the total across the site to 7 million TEUs. At the same time, new cranes have been arriving at the two existing terminals to accelerate container movements on and off ships.
“The main equipment is in place at the Red Sea Gateway,” says Saher Tahlawi, director general of the port. “We are now working on construction of the workshops at the site. We have just received three new gantry cranes at the south terminal and five more cranes will arrive over the next three months. Three will go to the north terminal and two to the Red Sea Gateway.”
The extra capacity and equipment is timely. Some 73 per cent of Saudi Arabia’s container traffic passes through the port and congestion had become so bad last year that vessels were left waiting for a berth for up to a month.
A key problem for the port is its location, just to the south of the city centre. Unlike many of the other main seaports in the region, Jeddah has not moved its port facilities out of the city to allow for expansion and better landside transport links. As a result, the port is hemmed in and road access to the site is difficult, which reduces the speed at which goods can be loaded and unloaded from ships.
The situation was supposed to be relieved by the Saudi Landbridge, the railway line that will link Jeddah with Dammam Port on the Gulf coast via Riyadh. The $7bn project offers the prospect of an integrated freight and passenger network from coast to coast, providing a swift trade link between the Gulf and the Red Sea, and enhancing the kingdom’s industrial capacity.
Land has been set aside in Jeddah for a rail link to the port but the railway is nowhere in sight. Two bidding rounds over two years have failed to deliver a winner, as banks baulk at the cost of the project in the wake of the recession.
Riyadh will relaunch the Landbridge in 2010 as a public-procurement scheme. With no railway in prospect to relieve congestion at the port for several years, the authorities in Jeddah have been forced to explore other options.
“The port is hemmed in and road access to the site is difficult, which reduces the speed at which goods can be loaded and unloaded”
In March 2009, Jeddah Municipality signed up for a $1bn construction programme for new roads and bridges to filter traffic away from the port. The project is expected to take about two years to complete but should bring huge improvements in passenger and freight access to the city’s port and airport.
In the meantime, demand for the port’s services remains strong and the authorities have already begun planning for a fourth terminal at the site, which could raise capacity by a further 4 million TEUs to 11 million TEUs by 2020. Singapore-based port operator PSA has completed a feasibility study for the new facility. Pending a successful start for the Red Sea Gateway, construction could begin by 2015.
Because of the huge spikes in traffic caused by the annual Hajj pilgrimage, Jeddah has faced a dilemma. Building up capacity to cater comfortably for those peaks could leave dockside space idle for the rest of the year.
Jeddah also needs to prepare for an increase in competition, which will come from a new port being developed 100 kilometres to the north near Rabigh, as part of the King Abdullah Economic City development. It could pose a long-term threat to Jeddah’s pre-eminence on the Red Sea, as it will not suffer from the congestion that has plagued Jeddah.
If the local government in Jeddah can solve the city’s traffic problems and the Landbridge project is reinvigorated, Jeddah’s port can meet the challenge. It remains in a strong position to pick up trans-shipment traffic between Asia and Europe, and could again be a marine gateway befitting the GCC’s largest economy.