Ports: Emerging players seek concession opportunities

2011-05-29

Dubai's DP World manages ports across the continent, while Chinese financiers are backing a mega-port in Tanzania and other projects in South Africa.

Emerging economies are not just competing with the West for Africa's resources, they are also staking their claims on the continent's port infrastructure.

French-owned Bolloré nevertheless remains the leader in African port management.

In March, the group won the contract for the second container terminal at Abidjan, known as TC2, taking its port concessions in Africa to 14.

Besides other established names such as France's Necotrans and Netherlands-based APM Terminals, owned by Denmark's Maersk, there are several new players with deep pockets.

United Arab Emirates-based DP World runs terminals and stevedoring (dockworker) operations in Djibouti, Mozambique, Egypt, Algeria, Senegal and South Africa.

DP World has stevedoring operations in the four main ports.

The company, which has 5,000 staff in Africa, is planning a new container terminal near Senegal's Port du Futur, has a concession to expand operations in Egypt and plans to enlarge its capacity in Mozambique.

Joost Kruijning, DP World's senior vice-president and managing director for the Middle East and Africa, says the company's interests in Africa reflect those of its clients.

"Emerging markets are their focus, and so they are ours too," he told The Africa Report.

"We invest for the long term, with an average concession life of more than 40 years. Africa has great potential for growth, and efficient infrastructure is essential for stimulating that growth, with ports the gateways to world trade," he said.

The company does not break down the volumes and profits of its African operations, but in its 2012 results statement it noted that strong performances in the Middle East and Africa buffered against weaker results in Europe.

Operating in Africa comes with its challenges and risks, too.

DP World's Senegal operations have been thrust into the spotlight following corruption charges lodged in April against Karim Wade, the son of former President Abdoulaye Wade and a former infrastructure minister.

The authorities say that business- men and Karim Wade illicitly acquired assets in transport and infrastructure companies, including DP World Dakar, worth more than $1.4bn. DP World has denied that Wade has shares in the company.

Other newcomers are winning contracts.

In March, the Tanzanian government inked a deal with China Merchants Bank to build what is being billed as Africa's largest port.

When complete, the facility at Bagamoyo, northwest of Dar es Salaam, should be able to handle 20m twenty-foot equivalent units (TEUs) per year.

The port at Dar es Salaam handled 450,000 TEUs in 2011. When linking roads and railways are upgraded, Bagamoyo will have the potential to become a main exit point for exports from Tanzania and landlocked countries such as Malawi, Zambia, Burundi, Rwanda and Uganda.

Chinese players are also investing in South Africa, where the China Development Bank agreed in March to provide state-owned freight group Transnet with up to $5bn to revamp tracks carrying products like coal and iron to the country's ports.

China's Chery Holdings also agreed in late March to set up a shipbuilding and breaking company at Richards Bay.

Source from : The Africa Report

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