ADEN FREE ZONE UNITY’S MAJOR ECONOMIC ACHIEVEMENT [Archives:2000/21/Business & Economy]
Here we give a brief background on Yemen’s most important project, undeniably, Aden Free Zone.
If you stand on Jabal Shamsan, some 600 meters above Aden City, and look out to the sea, you would see the horizon about 45 miles away. From here, you can also see several ships, which move between the Red Sea and the Indian Ocean and pass within a few miles of the harbor.
Aden has been a major regional center at various times over the past 3000 years. Over this long time span, visitors with a vision have always been impressed by the port and the opportunities for trade, which it offers. Marco Polo and Ibn Batuta both noted the prosperity of Aden as a ship-owning center.
One hundred and sixty years ago, Captain Haines and the British arrived in Aden, and stayed there for 125 years. Captain Haines predicted, even when Aden was a small village of around 600 persons, that Aden could again become a major trading center. The later part of the British period proved him right and Aden grew to become one of the major business ports in the world.
Aden was declared a Free Port in 1850 as it took control of Yemen’s coffee export trade. From 1869, the Suez Canal shortened the sea distance between London and Bombay from over 10,700 miles around the Cape of Good Hope to 6,270 miles through the Mediterranean and Red Sea. Aden’s coal bunkering and re-provisioning trade accelerated. Aden was fortunate to be connected to the London/Bombay telegraph cable in the 1870’s, giving it great advantages in east/west communications. By 1901, Aden Inner Harbor had been dredged to 30 feet to handle the largest ships of those days.
In 1919, Aden introduced oil bunkering and became, by the 1950’s, one of the world’s top ship bunkering ports, handling up to 6,300 ships a year. Calls by cargo and passenger vessels made Aden the world’s 4th largest tax-free shopping port. It became the regional base for dhow, coastal, and deep-see traffic. Dhows trading between the Gulf of Pakistan, the Red Sea and East Africa were regular callers and Aden handled over 1,500 dhows annually in the mid-1990s.
The oil refinery and oil harbor were built in 1955 and Aden began importing and refining crude oil primarily to provide the oil fuel needed by the ships bunkering at Aden.
What makes Aden so uniquely suitable as a port and distribution center in the region? The answer to that question lies in its strategic location, as Aden offers shippers and shipping companies from all over the world many advantages. These services helped to make the port a regional center during its long history and will continue to favor it in future.
The advantages that Aden Port offers may be summarized as follows:
– The port lies where the Red Sea and Gulf of Aden meet, directly on the main round-the-world and the Far East to Europe/America trade route.
– It requires a deviation from this route of only 4 nautical miles to reach the pilot station.
– It has clear approaches from waters 20-40 meters deep without reefs, well marked by aids to navigation.
– A well-planned and easy channel extends only four miles from the fairway buoy to the inner harbor berths.
– Aden offers deep water in one of the world’s largest natural harbors, protected from prevailing winds during winter months by hills 500 meters high to the south and east, from the summer SW monsoon, and hills 350 meters high to the south west.
– It enjoys clear weather and is able to operate for 365 days a year.
– Aden is around 4,570 miles from NE Europe and 3,640 miles from Singapore, around 9 days from Europe and 7 days from Singapore on modern container ships.
– It is very well placed to provide transshipment services to East Africa, the Red Sea, the sub-Continent and the Gulf, and
– It enjoys a dry climate with temperatures of around 28¡C through the winter and 38?C during the summer (between May and September)
Based on these splendid advantages, Aden developed and expanded its port services until 1967, when the Suez Canal closed for 8 years. This, added to the uncertainties following national independence, led to a severe downturn in Aden’s trade at a time when other states in the region were beginning to generate substantial oil revenues. New ports in the region handling massive amounts of construction projects cargo then grew to become major centers in the 1970s and 1980s.
Aden had no facilities for handling containers during these years and was starved of investment capital. All dry cargo was handled at buoys in the inner harbor before being transferred to the Home Trade Quay by lighters. Double handling, the accepted means of working cargoes in most ports up to the 1960s, continued at Aden into the 1980s.
The results of cooperative stand by the Aden Port are now evident by the opening of the Aden Container Terminal.
Aden Container Terminal (ACT)
Yeminvest and PSA Corporation, with Hyundai as main contractors, are completing the new deepwater container terminal on the North Shore, known as the Aden Container Terminal (ACT).
The quay wall for the ACT can be taken to a depth of 18 meters, four meters deeper than Jabal Ali, Jeddah or Colombo. The ACT will be able to handle the world’s largest existing and planned container ships. Initial dredging is being carried out to 16 meters (53 feet) alongside and in the outer section of the channel. Tidal patters effectively give the port 16,8 meters alongside for 18 hours each day for almost the whole of the year.
The first phase of the North Shore berths, 700 meters in length, will be opened in March 1999. Phase II will provide a further 350 meters and Phase III 600 meters to give a Terminal length of 1,650 meters. Other phases should follow as well. The Terminal will be equipped with the latest super post-Panamaz quay cranes, with an outreach of 57 meters. Rubber-tyred Yard cranes, reefer points, engineering, maintenance, and other facilities to match and support quay crane capacity are also being installed. A power station, a desalination plant and a sewage treatment plant are also being built.
Commercial and economic impact of Aden Container Terminal
The construction of the ACT and the restoration of Aden’s former position as a regional service and distribution center will be a key element in the economic development of Yemen. Its importance to the port, to the city of Aden, and to Yemen cannot be over emphasized. YPA believes that this will prove to be the ‘key’ project to attract inward investment for infrastructure development and a wide range of industrial activities.
The project “makes a statement” on improvements in political and economic stability in Yemen over the past three years, which other investors can recognize and respond to. There is already evidence that major companies outside Yemen are responding.
There will inevitably be competition from other regional ports. Some of these grew impressively over the past 30 years and traffic in the more successful ones is dominated by container transshipment. Container movement worldwide increased around 9-9% annually in the 1990s and is predicted to grow between 7-8% until 2010. Container handling was a market which did not exist when Aden was a major bunkering port, but has become a market, which Aden can and will bid to share.
A growing percentage of the very large container ships, which currently handle the world’s ‘break-bulk’ cargoes, are now in the 6000+ TEU class. Ships carrying over 4,500 TEUs, which currently make only 2% of the world’s fleet, are forecast to form 33% of the world’s container fleet by 2010.
With the Aden Container Terminal coming into service, Aden is ready to handle ships of this size, and larger ones, and to re-gain its position as a regional hub port.
Future port development
YPA visualizes the expansion of the port to the west, to provide a shelter for various purposes, including industrial processes, which need access to deep quay space. Yemen can provide workers some of the more labor intensive industries which are currently looking for sites and, with easy access from all points of the compass, it would be difficult to improve on Aden’s location.
Visitors to the Port of Aden often comment that Aden is a very ‘real’ place. They regard it as a real city, with real people, with a real port in a place where God intended one to be. After years of decline and under-utilization, Aden promises to stand strong in this new millennium challenging others for its rightful place as a major distribution center. The dreams of three years ago are being transformed into ACT.
A number of strategic planners in the transport sector, looking at container movement in the twenty first century, conclude that hub and spoke operations for containers are here to stay, and that transshipment will be focused on a small number of ports in key locations. The physical characteristics, expertise and facilities of these ports will enable them to handle very large container ships with great efficiency. One recent report predicts that by 2010, there will be just five major ports handling the bulk of the world’s transshipped container traffic. Aden is identified as one of these.
YPA believes in the future of Aden, and hope that many of you will have good cause for optimism for and confidence in Aden in the coming months and years. We trust that you will catch something of the vision we have whenever we look out from the hills which guard this port. By coming to Aden, you will be following the steps of some very famous travelers.