There is a risk that the continued expansion of cargo and container terminals in ports across the GCC will affect their long-term profitability.

“There has been, in the past, an almost irrational behaviour when it comes to the construction of ports across the region,” a source tells MEED.

According to the source, the port owners in the region should learn from the global shipping industry, which struggled to fill capacities of vessels after focusing on building large vessels.

“More terminals with expanded capacities will keep driving prices down,” the source tells MEED. “Everyone thinks they can generate traffic to match the available capacity but increased competition means some ports will be less attractive and unprofitable.”

Multibillion-dollars-worth of port projects are planned in the GCC. They include under-construction Mubarak al-Kabeer Port in Kuwait and the $1.6bn fourth terminal at Jebel Ali Port. Terminals at these ports could come online over the next four to five years.

In addition, ports in UAE’s northern emirates are undergoing an expansion and Qatar is expected to award the design and masterplan package for the second phase of Hamad Port soon.

Apart from intra-regional competition, some of the GCC ports are expected to face additional challenge from ports in Pakistan and Iran, in addition to the planned revival of the rail-based Silk Road route that envisages connecting China to Eastern Europe via Iran.