Monday, March 26, 2018

Port and Logistics Group Wins New Deep Water Contract in Africa and Enhances Kazakhstan Business

DP World Slips Into Banana
Shipping News Feature
DEMOCRATIC REPUBLIC OF CONGO – KAZAKHSTAN – DP World has won a 30 year concession to manage and develop the new greenfield multi-purpose port project at Banana, Democratic Republic of the Congo (DRC). The Port of Banana will be the first deep-sea port in the country along its small coastline of 37 kilometres, which currently only has the riverine port of Matadi. Simultaneously the company has announced it has signed two framework agreements relating to the acquisition, governance and management of Special Economic Zones (SEZ) in Aktau and Khorgos in Khazakhstan.

The Congolese agreement includes an option of a further 20-year extension for the continued management of the Banana facility in a deal which sees the Dubai based group hold a 70% stake with the government of DRC holding the remaining 30% share. The first phase of the Greenfield project, with an estimated initial investment of $350 million, will include a 600-metre quay and 25-hectare yard extension with a container capacity of 350,000 TEU and 1.5 million tonnes for general cargo. Construction is expected to start in 2018 and is expected to take approximately 24 months to complete.

The plan is to raise the profile of the DRC with regard to international trade, Matadi having once had much more status than it currently enjoys. The initial investment of $350 million will be spread over 24 months and the total project cost of more than $1 billion over four phases will be dependent on market demand for the port, industrial and logistics zone infrastructure. Jose Makila Sumanda, Vice Prime Minister and Minister of Transport and Communications, Democratic Republic of the Congo, commented:

“We are excited to partner with DP World on this landmark project. The Port of Banana will offer the first deep-water port to the Democratic Republic of the Congo that will dramatically improve the cost and time of trade as the majority of the cargo is still handled by neighbouring countries. The project will provide us with a first-class marine facility comparable to other African countries in terms of capacity, draft and ability to handle the latest generation of vessels.

“The country was waiting for this strategic and structural project for a long time. We are confident that with DP World as a partner, we will be able to meet the expectations of our people, traders and exporters to have access to more markets and to bring more efficiency and cost effectiveness to international trade.”

Meanwhile in Kazakhstan DP World has provided management services to the Port of Aktau, Kazakhstan’s main cargo and bulk terminal on the Caspian Sea for some time. The company has also managed the Special Economic Zone (SEZ) of Khorgos, an area which lies directly across the border from China where the sibling city is known as Khorgas, located in Xinjiang’s Ili Kazakh Autonomous Prefecture. Although the two cities share almost identical names the similarities end there with both operating different gauge railway lines.

The Khorgos SEZ has been acting as the primary transit point for trans-Eurasian cargo trains for more than four years and forms part of the ‘Belt and Road’ initiative. Kazakhstan, as one of the old soviet satellites uses Russian gauge rail tracks whilst China employs the narrower western European format as a legacy from the original installers of the lines. Khorgos is predicted to be the largest dry port in the world by Chinese analysts.

DP World says it now plans to acquire a 51% stake in the Khorgos SEZ and 49% in the Aktau SEZ following the agreements signed with the intention of playing an ever more important role in enhancing trade connectivity along the New Silk Route, handling all cargo types including hydrocarbons, containers and bulk. Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said:

“Kazakhstan is an important link in the New Silk Route and in the development of the Belt and Road Initiative. Focusing on soft and hard infrastructure development that supports multimodal transport links will be key in realising its potential as a transit corridor as well as boosting its own economy.

”[Meanwhile] we are delighted to extend our African footprint further with a major investment in the Democratic Republic of the Congo, which is Africa’s third-most populous country but has no direct deep-sea port. Investment in this deep-water port will have a major impact on the country’s trade with significant cost and time savings, attracting more direct calls from larger vessels from Asia and Europe, and ultimately acting as a catalyst for the growth of the country and the region’s economy.

“DP World has become a major player in Africa and the Port of Banana will contribute to our global network and continued growth in the developing markets. We are confident that this investment will deliver attractive returns to shareholders over the longer-term and we look forward to bringing DP World’s world class productivity-enhancing, security, safety and environmental best practices in container terminal development and operation to the Democratic Republic of the Congo.”

Photo: Kanat Alpysbayev, President of Kazakhstan Temir Zholy (KTZ) and Sultan Ahmed Bin Sulayem, sign the framework agreements in Abu Dhabi.