Aden Port: Back to The Future? [Archives:2001/09/Business & Economy]

February 26 2001

Karen Dabrowska
Aden was once the world’s top bunkering port after New York. An important staging post for shipping between Europe, the Mediterranean and Asia, some 6,000 vessels called at Aden each year during the 1950s and 60s. But shifting trade patterns, war, political changes and uncertainties drove the business elsewhere. The port was reduced to a shadow of its former self. But, with the recent growth in container traffic using Aden for transshipment services, the situation is changing back to Aden’s favor.
Today Aden’s position in the ‘world traffic league’ of around 400 container ports has climbed from No 330 in 1995 to around 130 in 2000. This year it is expected to handle 400,000 TEU’s (20 foot containers) and will then become one of the top 100 world container ports.
The Cole incident has not affected container shipping, even though some passenger ships took Aden off their itineraries in the short term. Optimists like Ahmed Fadhli, a victim of the land confiscation of the socialist era in the former People’s Democratic Republic of Yemen whose farm was returned to him after unity, believes that the development of the port and free trade zone will ensure Aden flourishes. The positive spinoffs will spread to Abyan, Lahj and Taiz.
“Aden is an obvious stopping point for the huge ships, which now carry 7000 or more containers each, travelling from Europe”, Fadhli says confidently. Cargo can be unloaded at Aden and taken to South Africa, Cape Town, the whole of East Africa, the Gulf, Iran, Iraq, Pakistan and India”.
His views are echoed by the Yemeni government which bills the Aden Free Zone as an international gateway to business opportunities in three continents: Asia, Europe and Africa. According to EU Consultant J. Pearce, the FZ could be a motor for economic growth spurring new regional trade and business opportunities.
But many of the locals are not convinced. An estimated 50,000 people are living in the streets of Aden, many of them northerners who have come to the south in search of work. Around eighty thousand civil servants, mostly from the south, have been made redundant.
“Dreams of a bright future are only dreams and there is no future”, said Ali, a civil servant who took early retirement. When people have worked for 35 years they are ‘entitled’ to retire, and now are encouraged or made to do so. Many people in their 50s who started work at 17 are in this position and are very unhappy about it.
The statistics suggest that the optimists are more realistic than the pessimists. Aden’s annual growth since 1992 (9,632 TEU’s) has been 2,600% and new services and expansion of existing services continue to feed traffic growth. The New World Consortium started calling at Aden every Wednesday from mid-January this year, using the port for regional transshipment to the Red Sea, East Africa, the Gulf and the West coast of India. Other lines providing similar services are considering Aden in preference to other ports in the region. Total container throughput in Aden in 2000 was almost
248,000 TEU’s, more than double the 1999 figure of 121,700.
But competition between regional ports is severe and collaboration is unlikely. Aden’s container handling tariff is therefore very competitive, although its marine tariff is certainly higher than many of the regions competitors. The minimal deviation required for a ship trading on the main world east-west route via the Red Sea and Gulf of Aden to call at Aden gives it advantages over other ports in the region.
Growth at Aden is also reflected in the numbers of vessels calling each year. Excluding fishing vessels and yachts, this reached 1,668 ships in 2000, rising from under 900 in 1995. By 2005 it is estimated that some 2,330 large vessels will call at the port as it continues to expand its services to international shipping. Around 20 passenger vessels and 170 yachts visit Aden each year and there is a little continuing show building activity.
But serious deterrents to the development of the free zone are the frequent complaints from potential investors about the difficulty in getting information and licenses because of excessive bureaucracy.
Perhaps in reaction to such complaints, the EU has agreed to grant Yemen $759,000 for institutional training at Yemen’s Free Zones Public Authority. Ahmed Fadhli was looking forward to an influx of business people and investors from Hong Kong last year. “They did not come due to our stupidity”, he said sadly. “A small clerk can stop an investment directive from the president”.
But confidence in Aden’s potential has prompted the Germans to invest DM 80m in restoring the sewage system. New buildings such as the Ma’alla Plaza and the Thabet Brothers Building along the ‘Ma’alla Mile’ have been built, and are seeing increasing occupancy. Hotels are being revamped and foreign business visitors can look forward to staying at places such as the new Red Sea Hotel, currently under construction.