Sea change in port plans with new Mesaieed project

19 October 2007

The project to build a new offshore port east of Doha has been abandoned in favour of a coastal location at Mesaieed.

The ongoing saga of the new port in Doha took a fresh twist in the first week of October. A decree by Emir Sheikh Hamad bin Khalifa al-Thani abruptly announced the $5,500 million port planned as an offshore island east of Doha would instead be built 35 kilometres down the coast in the Mesaieed area, south of Al-Wakrah.

The sudden announcement came as a surprise to many within Qatar’s ports community.

In late September, a senior ports official said that a location for the new port had not yet been chosen, with offshore and onshore sites still under consideration, prompting local engineering contractors to complain that the project was ‘back to square one on the location’.

The official insisted that the project would still go ahead and that a location would be selected by the end of October.

But the following day, the new Mesaieed port was confirmed by Finance Minister Yousuf Hussain Kamal.

The port was originally to be built on reclaimed land 5 kilometres east of Doha International Airport and connected to the mainland by an 8.5-kilometre-long trestle bridge.

If the new Mesaieed port follows similar specifications, it will comprise a commercial port with capacity of about 1 million TEUs, and a section for naval forces.

The new port Doha masterplan was prepared by US construction giant Bechtel. Bids were submitted in 2005 for the engineering, procurement and construction management (EPCM) contract by Bechtel and the US’ Kellogg Brown & Root.

It had been assumed that as the designer on the project, Bechtel was frontrunner in the bidding until, inexplicably, everything went quiet. Occasional ministerial statements continued to reaffirm the government’s belief in the project, but by 2007 there had still been little progress on the scheme. That was until June, when the emir issued a decree establishing a new steering committee for the Doha Port project.

The committee is headed by Abdulaziz Mohamed al-Noami, chairman of the Civil Aviation Authority.

The UK’s Scott Wilson and PSA Singapore have been drafted in as consultants to the Qatari ports regulator, the Customs & Ports General Authority (CPGA).

Renewed progress

Regardless of the reasons for the delay and the move in location, the emir’s intervention does at least mark renewed commitment to the project. The most curious matter about the lengthy hold-up is that it is universally accepted that Qatar desperately needs the project.

The emirate had the fastest-growing economy in the world in 2007, and although it is starting from a relatively small foundation, the rate of growth is already placing a strain on the national infrastructure. As Qatar expands its industrial base beyond its main strength in natural gas, new facilities are needed and the new port is an essential gateway for the import of necessary construction materials and the export of products.

Qatar recently announced tentative plans to build two extra free trade zones in the country, in addition to the one already planned, which was to sit between the new port and the airport. The government wants to attract large transport companies and hi-tech business to the emirate, but for these long-term ambitions to be met, Qatar must improve its port infrastructure or risk losing business to other GCC countries.

‘There is a huge amount of construction material going through Doha port at the moment timber, pipes and other materials and consumer goods for the population,’ says George Thampy, acting cargo manager of Qatar Navigation, which runs Qatari shipping and the city’s current port.

‘There are tremendous changes in Qatar and incoming cargo will double, so a larger port is needed. It is not a trans-shipment hub presently this is the intention for the new project.’

The current port in Doha is simply not up to the job of handling materials in sufficient quantities to supply the country’s rapid growth and burgeoning industry.

The first problem is the port’s location. It is built in the city centre and has become hemmed in by Doha’s expansion, leaving little room for growth. Road access is notoriously bad, with huge tailbacks developing at peak times. Companies estimate the road congestion around the port can add three or four hours to the time taken to load or unload and transport products out of the city.

‘The location and road access is the biggest problem at the present port, more than the size of the port itself,’ says Saif al-Swaidi, director of port operations in Doha.

‘Trucks have great difficulties making their connections in and out of the port. At rush hour, waiting times are three or four hours.’

On top of this, the port itself has not moved with the times. The main jetty has a draft of 8.5 metres, while the container jetty is 9.5 metres. Both are too shallow for the largest container ships, which are critical to the container shipping market. As a result, Doha has to ferry containers to and from land on smaller vessels, while the largest ships lie offshore.

‘We mainly depend on feeder vessels to bring the containers as we have difficulties accommodating the mother container vessels due to the actual draft limitations,’ says Al-Swaidi.

Shipping companies are quick to criticise the facilities available to them in Doha and raise concerns over the slow pace of change within the port sector compared with Qatar’s ambition and accelerating rate of growth.

‘If you compare the current port in Doha to others around the region, there are lessons to be learned in terms of efficiency and cost,’ says an official at one of the largest global shipping lines. ‘It is a concern for us that there is not a system that enables us to provide the best possible service to the Qatari market. The Qatari population needs to get the same access to the goods that are required.

Shallow jetties

‘On top of this, there will be a lot of new exports leaving Qatar in the coming years. The petrochemicals industry is booming and there is not the room for this at present. Qatar has a lot of buying power and this is driving infrastructure development but the supply sector in terms of shipping space is lagging behind.’

He points to an organisational anomaly that shipping firms also say hinders the development of the sector.

‘The Qatari shipping market is quite special in that it has one national company Qatar Navigation that runs shipping and ports,’ he says. ‘There should be a clear distinction between the port and the shipping side, but while it remains a niche market, I doubt it will separate them.’

Officials at Qatar Navigation confirm there are no plans to uncouple the two elements of the business, and deny it has hindered progress. Instead, confidence in the new port is high.

‘When the expansion takes place Doha will be able to compete with Dubai,’ says one Qatar Navigation official.

Meagre facilities

That prospect appears some way off. Indeed, it is indicative of the slow progress on the new port project that at the same time as the emir’s announcement, the CPGA is seeking permission to expand the current port facilities in Doha.

A plan has been put forward that would double capacity to 800,000 TEUs. It is not much, but Qatar needs all the extra capacity it can get. With 65-70 per cent of Qatar’s cargo coming though Doha’s meagre port facilities, the current situation is clearly unsustainable.

Even if this expansion of the old port does get the go-ahead, however, Qatar’s need for a modern port facility is critical. The impetus provided by the emir’s intervention must be sustained, since the deficiencies at the current city port in Doha cannot be masked for long.

‘Everything is insufficient with the current port,’ says an international contractor based in Qatar. ‘It is too shallow, too small and it does not fit into the road network. Everything is wrong with it.’

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