Jordan to finance New Aqaba Port after PPP breaks down

25 January 2011

Previous agreement with the Bouygues/CCC consortium is now void

Amman will now fund the development of the New Aqaba Port directly after the public-private partnership (PPP) agreement with a selected consortium broke down.

In July 2010, a consortium comprising Bouygues, Bollore, both of France, and Athens-based Consolidated Contractors Company (CCC) signed a memorandum of understanding with the Aqaba Development Corporation (ADC) to design, build, operate and finance the port as a PPP. This agreement is now void.

The project has been through a complicated tender process with the initial build, operate, transfer (BOT) negotiations failing twice before. In 2009, ADC ended negotiations with the Kuwaiti-led Aqaba Gateway Group (AGG), which was the preferred bidder for construction work after the parties could not reach an agreement over the terms and conditions for development and operation.

The development of the port will now be carried out in three packages. Package one covers the marine works, package two is the grain silos and package three involves the remaining civil works. The new budget for the project is between $300m-350m.

Companies that previously prequalified for the original BOT agreement will now carry out the $100m marine works package.

The marine works consist of dredging and reclamation, four general cargo berths, including a roll-on/roll-off (ro-ro) and grain terminal, a marine services harbour, a breakwater and the extension of an existing seawater intake and outfall.

US-based Aecom carried out the design for the marine works package.

ADC plans to issue the tenders for packages two and three in the next three months, with construction scheduled to begin in mid-2011.

The first phase will see grain silos and ro-ro berths having a capacity of three million tonnes a year (t/y) and the planned general cargo terminal will have a capacity of two million t/y. The long-term plan will see the construction of four more berths that will increase capacity to five million tonnes for the general cargo terminal and six million tonnes for the grain silos.

The new port needs to be operational by late 2013 as the site of the existing port needs to be handed over to UAE-based developer Al-Maabar to develop a real estate project, the $10bn Marsa Zayed. This will be built over the next 10 to 15 years. The current population of Aqaba is about 120,000. By 2020, this is expected to increase to between 250,000 and 300,000 people.

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