Djibouti Aspires to Build Largest Ship Maintenance Yard for Region

[PasserBy]

New ports and free zones chairman sees outlay of 1.54 billion dollars in five major projects

 

 

Aboubaker Omar Hadi, chairman of the Djibouti Ports & Free Zones Authority.

 

The administration of Ismael Omar Guelleh in Djibouti has plans to build what will be the largest ship maintenance yard for East Africa and on the Red Sea corridor at a projected cost of 400 million dollars. Yet, experts in charge of developing the project have to choose the site for the project between the north coast of Djibouti (around Tajourah) and the country’s south coast, around Damerjog.

 

Water depth, wind level and geographical protection are factors in determining where the shipyard will be erected, according to Aboubaker Omar Hadi, chairman of the Djibouti Ports & Free Zones Authority.

 

“Otherwise, you will have to build a very expensive facility for a water break,” he told Fortune.

 

With the desire to incorporate dry dock and lift system models, the ship maintenance yard will be the ninth on the continent and the second on the East African coast, next to the 70-year old African Marine & General Engineering Co Ltd of Kenya. However, Djibouti’s shipyard will have the capacity to repair ships with 50,000dwt (dead weight), while its contender in Mombassa handles only up to 12,000dwt.

 

“We have wanted to build this yard for the past five years,” Aboubaker told Fortune.

 

Djibouti is at the heart of the Europe-Far East sea route, the second of the three largest routes in the world, apart from the Pacific and North Atlantic routes. An average of 90 large and medium size vessels, operated by liners such as Maersk and MSE, sail on this route, carrying around six million units of containers a year. This is projected to grow by an annual rate of 10pc.

 

The country wants to claim 50pc of this annual traffic in transhipment container logistics, thus committing, in the next three years, a 1.54 billion-dollar investment in expanding its existing port facilities and building new ones, according to Aboubaker, who was here in Addis Abeba for two days late last week.

 

He came here to promote these projects, including the creation of a new free zone, Jaban-us Free Zone, on a 57ht plot, 12km west of Djibouti Town. It will cost an estimated 30 million dollars, Aboubaker disclosed.

 

The government of Djibouti has plans to launch the second phase of the Doraleh Port development at a cost of 330 million dollars and convert the old Djibouti Port to a general cargo facility, at a projected cost of 88.5 million dollars, while expanding the newly built oil terminal at the Port of Doraleh at a cost of 150 million dollars, upgrading the facility’s storage capacity by 30pc.

 

There are also three plans on the drawing board to build brand new ports, including a livestock port, handing two million head, annually, in the south of Djibouti at a projected cost of 50 million dollars; in Goubet (the central part of Djibouti) to support a 4.5 million-tonne salt export, which could cost 55 million dollars; and the Port of Tajourah, one of the closest sea gates to landlocked Ethiopia, to be built at a projected cost of 85 million dollars.

 

The Port of Tajourah is designed to facilitate a prospective annual export of 4.5 million tonnes of potash from Ethiopia. The Ethiopian government has granted a concession over a 481sqkm area in the Danakil Depression, Afar Regional State, to the Ethiopian Potash Corp, a Canadian firm based in Toronto, which began drilling in May 2011. This extreme north-eastern part of the country contains a reserve of 128 million tonnes of the resource at 21pc potash component, geologists believe.

 

Both governments have contracted out road building projects from the quarry to the port. The Ethiopian part is constructed by the Defence Construction Enterprise.

 

“We have mobilised close to 60pc of the financing to pay for all these projects,” Aboubaker told Fortune.

 

The financing to pay for the construction of the shipyard, which is still under development, comes partly from the Djiboutian government and half from private investors in Europe and India. Their identities, however, remain confidential, and Aboubaker declined to disclose them.

 

However, the final deal is due by February 2012, and the launching of construction after three months, according to Aboubaker. The design and feasibility studies to justify the project are developed by one of the partners, which is a European company.