Aden Free ZoneInvestments to boost up [Archives:2003/683/Business & Economy]

November 6 2003

Mahyoub Al-Kamaly
The Free Zone in Aden has during the past six months granted licenses for projects at a total value estimated at $46.7 million for 39 services projects, 10 commercial projects, four warehousing projects, and six projects of multi-activity, all of which are to accommodate about 900 of Yemeni local labour.
Sources at the Free Zone said indicators were good after their proportion had declined by 25% in the two past years because the Yemeni ports and investment activities got affected by explosions in the American destroyer USS Cole in 2000 and the French oil tanker Limburg in 2002 and what accompanied them of September 11 in the United States of America.
The sources have made it clear that the total volume of the capital licensed for installation of investment projects in various fields amounted to YR 13 billion, while value of the foreign capital has amounted to $one billion. Proportion of the value of industrial projects out of the total invested capital of the local currency amounted to 32.1% and of the foreign currency by 41.9% and the tourist projects by 69.9% and commercial projects by 19%. It is expected that these projects would employ about 30 thousand local labour. On the other hand the value of projects licensed by the State Authority for Investment amounted to 1022 projects at a cost of YR216 billion and fixed assets estimated at YR 53 billion employing 26884 workers.
The data mention that the already implemented projects in the Free Zone reached 147 at an investment cost of YR200 billion and fixed assets of YR11billion. As for the projects under construction they are 72 with a value of YR53 billion and assets estimated at YR13 billion to employ about 3256 workers. For the development of the necessary infrastructure needed for big investment projects during the five-year plan 2001-2005 the Yemeni government has allotted a sum estimated at YR 74.3 billion.
The plan has given the Yemeni and foreign private sectors an opportunity for participating in the implementation of investment projects in conformity with the latest encouraging systems of investments. Among the most significant investments in the Free Zone following the building of container station and the industrial area, are the warehousing, goods, air freight, and electric power and tourist area projects.
Navigation sources at the container port in Aden mention that there is an increase in the number of unloaded containers reached during the past months of this year to about 500 thousand containers while the port had in 2002 received about 200188 ships carrying more than one million containers. The sources said the retreat of receiving ships was because of the consequences of the campaign against terror and imposition of insurance premiums on ships bound for Yemeni ports as the country had as a result of that lost about $7million.
Director of the Yemeni company for Investment and International Development (Yeminvest) Adnan al-Kaaf clarifies that despite the increasing good demand for using the container port by international navigation companies, it had not been operated by its full capacity. He says the port is capable of receiving more containers especially after the installation of a new crane in the port and five huge cranes that would help accelerate the operation of delivering and accommodation of more containers.
Statistical reports mention that the total of verified customs revenues from the Free Zone in Aden in 2002 reached around YR19 billion, while during the first half of this year they are estimated at YR 50 billion and the value of exports exceeded YR5 billion.
In 2002 the first phase of the industrial zone was inaugurated after providing its infrastructure by building water, electricity, communications and sewage networks. The cost of building the first phase of the industrial zone reached $400 thousand employing 4000 workers and it was built on an area of 30 square hectares on which 10 companies specialized in warehousing and industrialization that includes agricultural materials, cars and plastic industries. The overall area specified for the industrial zone is estimated at 1550 hectares and it is expected to be stations for exporting Yemeni products.
Yemen has confidence in having Aden and the Free Zone to become a regional trading centre due to its good geographical position, the historical reputation and the regional market available for cooperation.
The government of Yemen had built the Free Zone in Aden after the declaration of the unity and the issuance of the Free Zones law in April 1993. It had included 15 of the Aden governorate areas at a total area for implementing the project of the Free Zone of 23.500 hectares at a cost of $6 billion in four phases.
The law has defined goals of the Free Zone by integrating the Yemeni economy with the world economy through the city of Aden, developing he investment environment in Yemen, realizing sustainable development, improving the living standard of Aden people and planning the natural and construction and human environment.
The Free Zone is based on encouraging the trade of import and export and transit. In March 1996 an agreement was signed with the Yemeni company for investments (Yeminvest) for the development of Aden port for containers and the industrial and warehousing zone.
The port of containers was built of 6 quays with a total length of 1650 meters and a depth of 16 meters and an area of 83 hectares to accommodate about 1.5 million containers a year. The industrial zone project as built on an area of 1550 hectares along the northern coast of Aden.
The second phase of the project of the Free Zone in Aden was also implemented, including the building of a village for goods and air shipment, an area for heavy industries, and an international trading centre. In addition, there is a tourist area under construction including restaurants, parks and recreational playground.
The Yemeni ambitions of completing the container port and the Free Zone in Aden have been faced with instability of the region after receiving a painful blow led to the flee of capitals for investment in it following the blast of the American destroyer Cole. But Yemen has taken strict security measures to regain trust fort the national and invested capital and foreign investors. Indicators show that there is a noticeable activity of the private sector in the Free Zone in Aden and this would reactivate the present stagnation of tourism, investment and development of the infrastructure.