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Special report: How rebuilding a port can help rebuild a country
Economy Umm Qasr port
2022-02-28 12:02
Shafaq News/ Iraq’s notorious reputation and ongoing security issues did not deter ICTSI from investing in the war-torn country: the result, The Loadstar discovers, is a high-efficiency container terminal built to European standards.
Post-Islamic State (ISIS), Iraq is still struggling to rebuild war-scarred infrastructure, control bouts of civil unrest, target corruption and form a new government.
But, in the southernmost reaches of the country, International Container Terminal Services (ICTSI)’s immaculate container terminal seems far removed from the country’s troubles.
“Welcome to Basra Gateway Terminal East,” said ICTSI commercial director Marko Miskovic (below), with a broad smile. “A European port in the Middle East.”
It is not a throwaway comment. Neat rows of containers are set back from a spotless quayside and, beneath a row of five pristine gantry cranes, employees in hi-vis jackets and hard hats are training a new lorry driver, manoeuvring around tightly cornered cone arrangements.
Philippines-headquartered ICTSI launched its Iraq investment at the lowest point in the country’s recent chequered history.
It signed a 26-year contract to manage, operate and rehabilitate terminal facilities in Umm Qasr’s North Port with the General Ports Company of Iraq (GCPI) in 2014, the year ISIS seized control of almost a third of the country.
While Iraq sank to new lows as a pariah state, with force majeure slapped on many projects and a significant withdrawal of international companies, ICTSI made good on its investment pledge of $250m.
As Iraqi forces started battling ISIS in central and northern Iraq, ICTSI quietly persevered with an initial commitment to rehabilitate Umm Qasr’s multi-use BGT, now locally known as BGT West.
Once this was successfully completed, ICTSI began work on expanding the country’s cargo handling capacity, building a new dedicated container terminal, BGT East, while Iraq was pouring financial resources into what had turned into a three-year war against ISIS.
Mr Miskovic praised ICTSI’s hands-on president, Enrique K Razon Jr, for his faith in Iraq.
“He’s an entrepreneur who worked in ports from the beginning.
He believed in Iraq’s potential and had no doubts in investing this much money, so he took the risk and grabbed the opportunity,” he said.
“He visits every year, even during the war.”
Increasing capacity
Umm Qasr, located on the western edge of the al-Faw peninsula, where the mouth of the Shatt al-Arab waterway enters the Persian Gulf, is Iraq’s only deepwater port.
Commercial operations began 1967, competing with several older facilities located further up the Shatt al-Arab, in shallower waters.
It has undergone transitions, including a brief spell under Kuwaiti control, but today remains the country’s largest port.
Aside from crude oil, handled at several nearby oil export terminals, Iraq has three additional key exports – dates, bitumen, and sulphur,
but Umm Qasr mainly handles imports, with 95% of outbound containers empty.
ICTSI’s Umm Qasr investment not only upgraded infrastructure but quayside dredging at BGT East facilitated accommodating larger vessels – up to 14 metres draught and 400 metres in length – making it a “berth for tomorrow”, ready to receive larger vessels that could be deployed in the future.
Phase one of BGT East was completed in October 2016, when the terminal opened for business.
By the time the Iraqi government declared victory over ISIS in late 2017, phase two – expanding the new quayside and facilities – was well underway.
With Iraq’s economy weakened by the war, initially business could hardly be described as booming.
However, as the second phase of BGT East’s development was completed, in early 2019, imports increased, with the terminal receiving considerable quantities of the reconstruction materials much-needed by Iraq.
“Since the war, there has been a lot of business, including post-war reconstruction, and many companies have been returning,” Mr Miskovic told The Loadstar.
“And, because we had increased the port’s capacity, we could handle more cargo in the fastest possible way.”
The aim of BGT East – operating five ship-to-shore gantry cranes and 10 RTGs in its yard – was faster and more efficient container discharge and turnaround, to reduce vessel time in port and make Iraq a more competitive destination for direct calls.
In December 2020, the terminal hit a productivity high, with 1,768 moves on the Yang Ming Mutuality in 17.5 hours – a record-breaking performance for Iraq – achieving a berth productivity of 101 moves per hour.
Business impeded
Perhaps surprisingly, given Iraq’s reputation and history for poor security, the most serious problems ICSTI has faced have been the late 2020 devaluation of the Iraqi dinar, which reduced Iraq’s buying power, and the global Covid-19 pandemic, which negatively impacted freight movement across the globe.
“Supply chains were affected by Coronavirus.
We receive a lot of containers here from China – mostly commercial goods – and, for several months, no shipments were coming out of China and some lines diverted vessels,” Mr Miskovic said.
“Even to this day, supply chains are affected.”
Limited cargo shipments have become as much an economic issue as a supply chain one.
The average cost of sending a container from China to Iraq is $8,000, but sending the same container to America would cost between $15,000 and $20,000.
The result, Mr Miskovic explained, is that cargo shipments to more lucrative destinations are being prioritised, leaving Umm Qasr operating at around 50% utilisation.
“We are ready for cargo that’s not coming,” Mr Miskovic said.
He said BGT received 612 vessels in 2021 and, according to the eeSea liner database, it has an annual capacity of 1m teu and handles three direct Asia-Middle East services – the Ocean Alliance’s MEA4, THE Alliance’s AG2 and MSC’s standalone New Falcon service, which has an average vessel size of 10,680 teu – as well as two feeder services from X-Press and CFS and an intra-regional service operated by Cosco and its subsidiary, OOCL.
Meanwhile, a gas-fuelled power plant dedicated to serving the port was built in 2020 to overcome problems caused by Iraq’s power generation deficit, and
ICTSI is currently expanding terminal areas and installing a second scanner for lorries leaving the port, to build hinterland capacity, reduce queues and provide crucial back-up in case of scanner malfunction.
With its focus on making cargo movement into and across Iraq faster and more efficient, ICTSI has also brokered a deal with the Iraqi Railways Company (IRC) to extend the railway line to Umm Qasr to reach BGT East.
“Once this is complete, we will be able to move containers to Baghdad faster and cheaper,” said Mr Miskovic.
Boosting the local economy
But perhaps one of the most important benefits of ICTSI’s investment into Iraq is to be found among residents of the nearby town of Umm Qasr, from where most of the port’s employees originate.
HR deputy executive Jenan Mustafa noted that a recent job vacancy advertised for a menial position attracted some 300 applications.
“We have excellent staff retention because the working conditions are very good, and we are supporting around 700 local families, through direct or indirect employment,” she said.
Around 60% of the administrative staff are women, and BGT has even proved a matchmaker for two young ladies in the team, including Ms Mustafa herself, who met their future spouses here.
The opening of the new container terminal was also perfectly timed to offer civilian employment to some of the Iraqi forces (many of whom were volunteer fighters) who had recently left the battlegrounds of ISIS.
“Everything here is operated by Iraqis, and Iraqis are excellent port employees, among the best I’ve worked with,” said Mr Miskovic.
ICTSI’s working relationship with a country where many companies fear to tread looks set to be a long one.
But what was the secret, not just to transforming port infrastructure,
but also becoming the largest private investor in a challenging country at its most turbulent time?
For Mr Miskovic, the answer is a simple: commitment and professionalism.
“Everything we promised, we delivered, and we always delivered on deadline,” he said.
“We believed in Iraq, we invested in Iraq and we look forward to doing more for Iraq.”
Source: The Loadstar
Special report: How rebuilding a port can help rebuild a country
Economy Umm Qasr port
2022-02-28 12:02
Shafaq News/ Iraq’s notorious reputation and ongoing security issues did not deter ICTSI from investing in the war-torn country: the result, The Loadstar discovers, is a high-efficiency container terminal built to European standards.
Post-Islamic State (ISIS), Iraq is still struggling to rebuild war-scarred infrastructure, control bouts of civil unrest, target corruption and form a new government.
But, in the southernmost reaches of the country, International Container Terminal Services (ICTSI)’s immaculate container terminal seems far removed from the country’s troubles.
“Welcome to Basra Gateway Terminal East,” said ICTSI commercial director Marko Miskovic (below), with a broad smile. “A European port in the Middle East.”
It is not a throwaway comment. Neat rows of containers are set back from a spotless quayside and, beneath a row of five pristine gantry cranes, employees in hi-vis jackets and hard hats are training a new lorry driver, manoeuvring around tightly cornered cone arrangements.
Philippines-headquartered ICTSI launched its Iraq investment at the lowest point in the country’s recent chequered history.
It signed a 26-year contract to manage, operate and rehabilitate terminal facilities in Umm Qasr’s North Port with the General Ports Company of Iraq (GCPI) in 2014, the year ISIS seized control of almost a third of the country.
While Iraq sank to new lows as a pariah state, with force majeure slapped on many projects and a significant withdrawal of international companies, ICTSI made good on its investment pledge of $250m.
As Iraqi forces started battling ISIS in central and northern Iraq, ICTSI quietly persevered with an initial commitment to rehabilitate Umm Qasr’s multi-use BGT, now locally known as BGT West.
Once this was successfully completed, ICTSI began work on expanding the country’s cargo handling capacity, building a new dedicated container terminal, BGT East, while Iraq was pouring financial resources into what had turned into a three-year war against ISIS.
Mr Miskovic praised ICTSI’s hands-on president, Enrique K Razon Jr, for his faith in Iraq.
“He’s an entrepreneur who worked in ports from the beginning.
He believed in Iraq’s potential and had no doubts in investing this much money, so he took the risk and grabbed the opportunity,” he said.
“He visits every year, even during the war.”
Increasing capacity
Umm Qasr, located on the western edge of the al-Faw peninsula, where the mouth of the Shatt al-Arab waterway enters the Persian Gulf, is Iraq’s only deepwater port.
Commercial operations began 1967, competing with several older facilities located further up the Shatt al-Arab, in shallower waters.
It has undergone transitions, including a brief spell under Kuwaiti control, but today remains the country’s largest port.
Aside from crude oil, handled at several nearby oil export terminals, Iraq has three additional key exports – dates, bitumen, and sulphur,
but Umm Qasr mainly handles imports, with 95% of outbound containers empty.
ICTSI’s Umm Qasr investment not only upgraded infrastructure but quayside dredging at BGT East facilitated accommodating larger vessels – up to 14 metres draught and 400 metres in length – making it a “berth for tomorrow”, ready to receive larger vessels that could be deployed in the future.
Phase one of BGT East was completed in October 2016, when the terminal opened for business.
By the time the Iraqi government declared victory over ISIS in late 2017, phase two – expanding the new quayside and facilities – was well underway.
With Iraq’s economy weakened by the war, initially business could hardly be described as booming.
However, as the second phase of BGT East’s development was completed, in early 2019, imports increased, with the terminal receiving considerable quantities of the reconstruction materials much-needed by Iraq.
“Since the war, there has been a lot of business, including post-war reconstruction, and many companies have been returning,” Mr Miskovic told The Loadstar.
“And, because we had increased the port’s capacity, we could handle more cargo in the fastest possible way.”
The aim of BGT East – operating five ship-to-shore gantry cranes and 10 RTGs in its yard – was faster and more efficient container discharge and turnaround, to reduce vessel time in port and make Iraq a more competitive destination for direct calls.
In December 2020, the terminal hit a productivity high, with 1,768 moves on the Yang Ming Mutuality in 17.5 hours – a record-breaking performance for Iraq – achieving a berth productivity of 101 moves per hour.
Business impeded
Perhaps surprisingly, given Iraq’s reputation and history for poor security, the most serious problems ICSTI has faced have been the late 2020 devaluation of the Iraqi dinar, which reduced Iraq’s buying power, and the global Covid-19 pandemic, which negatively impacted freight movement across the globe.
“Supply chains were affected by Coronavirus.
We receive a lot of containers here from China – mostly commercial goods – and, for several months, no shipments were coming out of China and some lines diverted vessels,” Mr Miskovic said.
“Even to this day, supply chains are affected.”
Limited cargo shipments have become as much an economic issue as a supply chain one.
The average cost of sending a container from China to Iraq is $8,000, but sending the same container to America would cost between $15,000 and $20,000.
The result, Mr Miskovic explained, is that cargo shipments to more lucrative destinations are being prioritised, leaving Umm Qasr operating at around 50% utilisation.
“We are ready for cargo that’s not coming,” Mr Miskovic said.
He said BGT received 612 vessels in 2021 and, according to the eeSea liner database, it has an annual capacity of 1m teu and handles three direct Asia-Middle East services – the Ocean Alliance’s MEA4, THE Alliance’s AG2 and MSC’s standalone New Falcon service, which has an average vessel size of 10,680 teu – as well as two feeder services from X-Press and CFS and an intra-regional service operated by Cosco and its subsidiary, OOCL.
Meanwhile, a gas-fuelled power plant dedicated to serving the port was built in 2020 to overcome problems caused by Iraq’s power generation deficit, and
ICTSI is currently expanding terminal areas and installing a second scanner for lorries leaving the port, to build hinterland capacity, reduce queues and provide crucial back-up in case of scanner malfunction.
With its focus on making cargo movement into and across Iraq faster and more efficient, ICTSI has also brokered a deal with the Iraqi Railways Company (IRC) to extend the railway line to Umm Qasr to reach BGT East.
“Once this is complete, we will be able to move containers to Baghdad faster and cheaper,” said Mr Miskovic.
Boosting the local economy
But perhaps one of the most important benefits of ICTSI’s investment into Iraq is to be found among residents of the nearby town of Umm Qasr, from where most of the port’s employees originate.
HR deputy executive Jenan Mustafa noted that a recent job vacancy advertised for a menial position attracted some 300 applications.
“We have excellent staff retention because the working conditions are very good, and we are supporting around 700 local families, through direct or indirect employment,” she said.
Around 60% of the administrative staff are women, and BGT has even proved a matchmaker for two young ladies in the team, including Ms Mustafa herself, who met their future spouses here.
The opening of the new container terminal was also perfectly timed to offer civilian employment to some of the Iraqi forces (many of whom were volunteer fighters) who had recently left the battlegrounds of ISIS.
“Everything here is operated by Iraqis, and Iraqis are excellent port employees, among the best I’ve worked with,” said Mr Miskovic.
ICTSI’s working relationship with a country where many companies fear to tread looks set to be a long one.
But what was the secret, not just to transforming port infrastructure,
but also becoming the largest private investor in a challenging country at its most turbulent time?
For Mr Miskovic, the answer is a simple: commitment and professionalism.
“Everything we promised, we delivered, and we always delivered on deadline,” he said.
“We believed in Iraq, we invested in Iraq and we look forward to doing more for Iraq.”
Source: The Loadstar
