Expansion on the horizon for north African Ports

“We are providing an environment which supports the competitiveness of economic operators,” Jalal Benhayoun,

“We are providing an environment which supports the competitiveness of economic operators,” Jalal Benhayoun, Credit: Port Stratergy

Investments in North African ports are delivering on numerous fronts. Felicity Landon reports

From West to East, the contrasts in fortunes and focus at North Africa’s ports could not be clearer. In Morocco, a sophisticated port community system and national single window, Portnet, is a driving force in increasing and speeding up trade and delivering paperless efficiency – with some impressive environmental results as well.

The North African country’s main trading partner remains the European Union, which accounted for 56% of its trade in 2015, but Morocco’s decision earlier this year to rejoin the African Union after a three-decade absence has been interpreted as the country switching more focus to the fast-growing economies in Africa. Tanger Med, Morocco’s transhipment hub, continues to be Africa’s top-performing port and major expansion is under way – but there could be competition on the horizon.

In Libya, meanwhile, the chaotic civil war has continued to have an impact. At the major oil ports of Es Sider and Ras Lanuf, crude oil shipments were halted once again in March by two weeks of armed clashes. After a rival group seized the ports early in the month, the eastern-based military commander Khalifa Haftar regained control in mid-March. Waha Oil suspended production due to the ports’ closure but by the end of the month it was reported that the ports were preparing to resume operations.

Tanger aspirations

In Algeria, the government has announced that it is to press ahead with the development of a new $3.5bn port and industrial zones at El Hamdania – with a clear eye on the success of Morocco’s Tanger Med. The project has been granted $900m of funding by the African Development Bank; it will be developed by China Harbour Engineering Company and China State Construction Engineering Corporation, taking a joint 49% stake in the operating company, with the Algerian Port Authority taking 51%.

Located 70 kilometres west of Algiers, El Hamdania is to be developed in phases. Once fully developed, it will provide capacity of up to 6.3m teu per year over 23 berths. Construction is underway and the first berths are due to be completed in 2021.

By providing the same deepwater access and modern cargo handling equipment, Algiers is keen to follow the Tanger Med model, which succeeded in attracting transhipment volumes from southern European ports such as Valencia, Algeciras and Gioia Tauro, reported Africa Business Magazine. “However, it may not be quite as easy to copy Tanger Med’s success,” it said. “There are still big restrictions on private sector participation in many sectors in Algeria, highlighted by the fact that the Algerian Port Authority will take a majority stake in El Hamdania’s operating company.

“Algeria has not thus far managed to attract anything like the same level of manufacturing investment as Morocco and Tunisia, and so has failed to take full advantage of its location close to the world’s biggest trading block, the European Union. Although two industrial zones next to the port will jointly provide 2,000 hectares of land, it may be difficult to attract tenants.”

There have been reports that China Cosco Shipping could make El Hamdania its hub in the western Mediterranean. A key point is that the port would be looking to attract transhipment volumes for West Africa, not just Europe. Also, the main road between the port and Algeria’s southern border is to be upgraded, and this could allow containers to be moved more quickly to some landlocked areas of West Africa more quickly than they could be delivered by sea.

Export development

Elsewhere in Algeria, there are plans to create new logistics zones in the Port of Djen Djen. At the country’s first International Symposium on Trans-logistics, Transit and Goods Warehousing late in 2016, speakers focused on container terminals and logistics operations as a factor in economic development and the need to outsource logistics functions to support export development. Delegates considered the development of multimodal activities in Algeria and discussed export, automotive and industrial logistics.

In January this year, the Port of Djen Djen organised a meeting bringing together domestic and foreign traders and shippers with customs and other authorities to discuss incentives to promote non-hydrocarbon exports; at present, hydrocarbons still account for 94% of Algeria’s export revenues and 60% of its state income. The port of Djen Djen has said it is committed to the establishment of a ‘green corridor’ in co-operation with customs authorities, a 50% reduction in handling and lifting costs, and a 75% reduction in pilotage, towage and other charges.

Tanger Med’s container volumes are currently handled by terminals operated by APM Terminals and Eurogate. According to the Tanger Med Special Agency (TMSA), which has responsibility for the development and management of the Tanger Med port complex, total container volumes were steady last year at 2.96m teu.

The Tanger Med 2 expansion is providing for two more terminals, to be operated by APM Terminals and Marsa Maroc respectively.

Due to become operational in 2019, the new APMT MedPort Tangier transhipment terminal will serve multiple trades and be the first automated terminal in Africa, featuring technology pioneered at APMT’s Maasvlakte II terminal in Rotterdam, says APMT. The facility will complement the operations of its Tangier facility at Tanger Med 1 opened in 2007.

APMT has a 30-year concession with TMSA to develop the new terminal, which will have up to 2,000 metres of quay to handle the world’s biggest container ships, and an annual capacity of 5m teu. The operator says it expects to invest €758m in the terminal; towards the end of last year, orders were placed with ZPMC for ship-to-shore cranes.

Tanger Med’s current and future operations are helping Morocco to expand its role as a manufacturing centre. Renault produces about 250,000 vehicles a year in Morocco, and Valeo is investing €50m in a new factory.

Credit: Port Stratergy