The privatisation of Bahrain's ports on way
The privatisation of Bahrain's ports will result in a savings of BD350 million for the private sector over the coming 25 years, it was revealed.The handing over of the management and operation of Mina Salman and the upcoming Shaikh Khalifa bin Salman Port to APM Terminals Bahrain is considered to be the largest privatisation project in the country's history, said head of Customs, Ports and Freezone Affairs Shaikh Daij bin Salman Al Khalifa.'The decision to privatise our ports will prove to be sound both in terms of its benefit to the economy as well as to the expected reduction in both the ports services and shipping costs,' he said.Shaikh Daij was speaking at a ceremony held at Mina Salman port where he handed over the port's key to APM Terminals Bahrain managing director Jorgen H Madsen.
APM Terminals Bahrain is a joint venture between Yusuf Bin Ahmed Kanoo Holdings (20 per cent) and Maersk A/S, a company fully owned by the Danish A P Moller-Maersk Group (80 per cent).'The appointment of APM Terminals comes as a direct result of the vision of Bahrain's leadership in successfully fulfilling its goal of completing the privatisation of Bahrain's port sector,' said Shaikh Daij.'This is the largest privatisation project in Bahrain's history with a total number of government employees involved reaching up to 700.'Out of these 700 employees, 640 are taking early retirement benefits which would cost the government BD22 million.'The remaining 60 are not eligible for retirement benefits as they have not yet completed 10 years of service.'However, nearly 300 of the employees have applied to APM Terminals Bahrain and the majority are expected to join the organisation.'Shaikh Daij said the ports privatisation policy is also aimed at creating the Shaikh Khalifa bin Salman Port with its adjacent free zone and industrial areas at a total development cost of over BD170 million.'With that, the government provides the three major factors necessary to develop the maritime transportation sector in Bahrain, which are the development of the infrastructure, the increase of ports handling efficiency and the formation of the General Organisation of Ports that will be assuming a regulatory role,' he added.'I am proud to state that around 90 per cent of APM Terminals' workforce are Bahrainis.'In addition, such a project will create further employment opportunities for Bahrainis in its downstream industries let alone the opportunities in view of its operations growth.
'Shaikh Daij said he also expected an increase in the volume of cargo handling and rapid development of the transportation and maritime sectors.'This is especially important when the government is focused on the development of the logistics business through the creation of its upcoming Free Trade Zone at Hidd,' he said.'It is expected that the difference in cost of transportation between our ports and the ports of the southern Gulf area will decrease by at least 20 per cent, which translates to a total reduction of import/ export charges of about BD350 million for the total concession period of 25 years.'Mr Madsen said the Finance Ministry handed over the management and operation of Mina Salman to APM Terminals Bahrain last Friday.'The handover was done in an orderly and peaceful manner, thanks to the support of Shaikh Daij and other officials,' he added.'It is a good start, but it is also the start of a challenging transition period.'There are signs that we could be facing some temporary resource shortages. Contingency plans are being applied to minimise any inconvenience.'Madsen said APM Terminals Bahrain would invest $62 million (BD23.4 million) for new equipment over the coming two years.'Already, we have purchased equipment worth $3m (BD1.13 million) for the existing port,' he revealed.APM Terminals Bahrain and its sister company Svitzer Wijsmuller will together create 610 jobs, and 92 per cent of them will go to Bahrainis, said Madsen.APM Terminals currently manages 40 ports around the world.Under the concession agreement, APM Terminals will operate the port for 25 years after the opening of the new port, probably by the third or fourth quarter of 2008, said Madsen.General Organisation of Ports director general Ebrahim Salman said as an immediate result of privatisation, the port customers, mainly industrial ports, would witness marked improvement in the quality of services they receive specially with regards to reliability.'The successful privatisation has transformed the Directorate General of Ports into General Organisation of Ports as a separate entity tasked with the development and regulation of ports.'