Boosting Economic Expansion

Abu Dhabi has a systematic plan and a long-term vision for growth to boost its economy and promote diversification in the region. A part of this plan is to develop all ports in the emirate. The Khalifa Port and Industrial Zone aims to do that and more.

Just a few farms dot the long stretches of desert sand in Taweelah. The power station is the only landmark that catches the eye in the small town on the outskirts of Abu Dhabi. But not for long.

There, strategically nestled midway between Abu Dhabi and Dubai, lies the 137 sq kilometre site of the first phase of the Khalifa Port and Industrial Zone (KPIZ). Abu Dhabi Ports Company (ADPC), the project’s landlord and master developer, was established through Emiri Decree 06 in 2006 and mandated by the government as part of “Plan Abu Dhabi 2030” to “develop all ports (with the exception of oil and gas and military ports) and related infrastructure in the emirate of Abu Dhabi.”

“The port and associated industrial zone benefits from the geographical location, which is mid-way between two thriving and fast-growing cities of Abu Dhabi and Dubai,” says Majid Yavary, Deputy Director for Capital Projects. “In addition, proximity to marine transport routes and existing infrastructure is also a significant plus.”

Designed as a multi-purpose facility, the multi-billion dollar project includes the construction of a world-scale container and industrial port in addition to the development of over 100 sq kilometres of industrial, logistics, commercial, educational and residential areas, economic zones and free zones.

Handing over: Mina Zayed to Mina Khalifa Until the conception of this new development, Mina Zayed was Abu Dhabi’s key gateway to the world. Although it wasn’t officially inaugurated until 1972, Mina Zayed was established in 1968 in the northeast section of Abu Dhabi. The port covers an area of 510 hectares and comprises 21 berths that receive more than 2,000 freight ships annually.

“Khalifa Port will use more modern equipment than the 40-year-old existing port,” says Majid Yavary, Deputy Director for Capital Projects. It has come to a point where “the city began to encroach on the port,” explains Corporate Communications manager Antoine Tayyar. “We had to take it out of the city to expand further the maritime transport services.”

“Khalifa Port will accommodate the current marine traffic managed by Mina Zayed and will create a gateway for the import of all cargo and export of goods manufactured in the adjacent industrial zone. Mina Zayed, however, will remain operational until 2010, when Khalifa Port is expected to begin receiving vessels,” says Tayyar.

Building an island “The Port’s development has been broken down into five phases,” Tayyar says. Phase one of the project’s development began in February with the dredging and reclamation of 45 million cubic metres of material. After two years of studies and environmental impact assessment, the US$1.5 billion turnkey dredging contract was awarded to a consortium including Archirodon Construction (Overseas) Co. S.A., Netherland’s Boskalis Westminster Middle East Ltd. and South Korea’s Hyundai Engineering and Construction Company Ltd. The consortium is responsible for dredging an entrance channel and harbour basin, reclamation of 275 hectares for a harbour island and wharfs, construction of 3.2 kilometres of quay walls and a 4.6 kilometre bridge connecting the offshore port to the onshore port facilities.

The world’s largest single site smelter will also be constructed for Emirates Aluminum. Its 800-metre-long berth will have a capacity of 1.3 million tonnes per year when both phases of its development are completed.

“Two major earthworks contracts for the Industrial Zone were awarded to Al Jaber Transport & General Contracting LLC and Ghantoot Transport & General Contracting Establishment, marking the commencement of construction in Area A. The contracts involve the clearing and grubbing of around 19 sq kilometres of land, then the raising of the land to an elevated level of more than 2.5 metres MSL (mean sea level). Three hundred trucks will be moving more than 1.2 million cubic metres of fill per month,” says Tayyar. Area A comprises 53 sq kilometres of the total 137 sq kilometres of Khalifa Industrial Zone.

Financing “ADPC has already signed two credit facilities agreements with HSBC and National Bank of Abu Dhabi. The bridge facilities were taken to meet the costs of the first phases of work,” says Tayyar. “As we go, we are studying different financial structures.” HSBC was appointed last summer to provide financial advisory services to the KPIZ project.

Working side by side “Khalifa Port will not compete with the neighbouring Jebel Ali Port, which resides 60 kilometres away. The two will work in tandem, forming a mega port and transport hub,” says Tayyar. “Together, they will compete against the rest. Abu Dhabi Ports Company will form a joint-venture company with Jebel Ali Free Zone (JAFZA) that will manage, operate and promote a portion of the development in KPIZ,” he explained. Both ports will benefit from close proximity to two major airports, as well as the new Emirates rail line.

Contracts As the development’s landlord, ADPC has agreed with Dubai Ports World, one of the world’s largest container port operators, to manage the container and bulk terminal of Khalifa Port. DP World’s sister company Economic Zones World will be operating the Free Trade and Logistics Zone in KPIZ.