The GCC countries are expected to spend nearly $15 billion on the expansion of their ports within the next five years to meet growing business, the Kuwaiti-based Markaz Financial Center said in a study on GCC sea ports.
Many of the 35 major ports in the six-nation Gulf Cooperation Council (GCC) are undergoing expansion to handle a bigger capacity following an estimated eight per cent growth to nearly 25 million TEUs in 2010, the center said.
The UAE ports have the highest share of volume in the GCC at 59% while some container ports in the region rank favorably among their global peers. The report showed Dubai was ranked seventh in the world in 2009, handling 11.1 million TEUs. It moved down in rank to ninth in 2010 (mostly due to the growth of Chinese ports), nevertheless handling 11.6 million TEUs a 4.5% increase.
According to the study, Salalah Port in Oman ranked 32nd in 2010 with 3.5 million TEUs while the Saudi Jeddah port was 30th with an annual throughput of 3.8 million TEUs in 2010.
“There is a robust growth in investments on seaports to increase capacity. So far, the highest investments have come from Dubai and Abu Dhabi.
The other GCC countries are also all set to improve their ports,” Markaz said.
“A shift in the direction and nature of trade is taking place between the GCC and the world. It noted that about 30 years ago, the OECD accounted for 85% of the GCC’s trade while by 2009, the emerging markets accounted for 45%. Its figures showed trade between the GCC and the emerging markets have been rising at 11 per cent annually between 1980 and 2009, whereas the annual growth with the OECD was only five per cent.
“The emergence of India and China has presented the GCC with substantial opportunities as hubs. Therefore, the GCC ports need to ramp-up capacity, not only to cater to their own increasing needs, but also to develop a hub strategy. Most of them are ideally placed as a trade platform between Asia and the Far East on one hand and the West, Central Europe, and Africa on the other,” it added.
The report believes the favourable geographic location of the GCC countries provides them with a strong opportunity to establish one of the world’s most important transport and logistics hubs not only along the Europe–Asia shipping lanes, but also for northern and central Africa.
It said the large volume of the GCC’s hydrocarbon exports by sea has ensured the development of ports in all member countries. Markaz cited a recent report by global analysts EC Harris which ranked the GCC as the most attractive region in the world for investment in port developments.