Jeddah port authorities plan tender for fourth terminal

25 September 2009

Singapore’s PSA has completed study for proposed 60 per cent capacity increase

The authorities at Jeddah Islamic Port are discussing plans to tender the contract to build a fourth terminal at the site, which will increase its capacity by almost 60 per cent.

Ports group PSA of Singapore has completed a feasibility study for the terminal, which is aimed at increasing the number of containers the site can handle by 4 million 20-foot-equivalent units (TEUs) to 11 million TEUs when it opens in 2020.

The authorities will appoint consultants to carry out more detailed design work once Jeddah’s third terminal, the $443m Red Sea Gateway, opens towards the end of this year.

“We will make a full study for a fourth terminal once we have seen how the third terminal works,” says Saher Tahlawi, director general of the port. “We already have a study setting out the location of a new [fourth] terminal and are discussing how to issue tenders to the private sector. If possible, we would like to be building by 2015, with full operations by 2020.”

The new facility will receive its first ship in November and will be fully operational by March next year, adding 1.5 million TEUs of capacity to the site’s current capacity of 5.5 million TEUs.

Jeddah Islamic Port launched the PSA study at the beginning of this year. The study has identified a suitable location for the new terminal, south of the existing facilities. PSA declined to comment on its work.

Jeddah is currently the second-largest port in the region after Jebel Ali Port in Dubai, and the largest on the Red Sea. Some 73 per cent of Saudi Arabia’s container traffic passes through the site, which urgently needs extra capacity.

However, Jeddah has struggled with severe congestion on the roads leading to the port over the past two years and local authorities must resolve this problem before they sign off on a fourth terminal. The port’s city centre location means road access in and out of the site is difficult, slowing down the speed at which goods can be loaded and unloaded from ships.

During peak seasons, such as the Hajj pilgrimage and the weeks preceding Ramadan, vessels can wait several days just to get into the port.

Perishable cargo has rotted onboard ships and some importers and exporters have taken to ignoring Jeddah altogether, damaging local trade and industry.

In March, Jeddah Municipality committed to a $1bn building programme for 28 bridges and numerous roads across the city to filter non-freight traffic away from the port (MEED 13:3:09).

Port officials have admitted that with the Red Sea Gateway adding new capacity at the port from November, the problem could get worse before it gets better.

“We do still have congestion at the north terminal,” says Tahlawi. “Some ships have been waiting for a month, but high season is almost over and cargo levels will drop. We are working with city officials to solve this problem.”

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