DP World plans to remodel Algiers port

DP World, the Dubai-based global ports operator that has just begun work at the container terminal in Algiers port, says it will reduce ships' waiting time from up to three weeks now to four days by the beginning of next year. High demurrage costs caused by long periods waiting at anchor and to unload make Algiers one of the costliest Mediterranean ports.

Mohamed Al Khadar, general manager of DP World Algeria, says it costs €280 ($365) to ship a container from the UK to New York but to ship one from France to Algeria costs €600.

The company, which has a 30-year concession to operate the terminal, says it is committed to upgrading the port's infrastructure, installing new equipment and an IT system as well as modernising unsafe and inefficient working practices.

DP World is operating the port under a 50/50 joint venture with EPAL, the Algerian ports authority.

Mr Khadar says the aim is to increase Algiers' handling capacity from an annual 400,000 TEU (20-foot equivalent unit) to 700,000 TEU.

But the company has met resistance. As soon as it took over management in March, 300 dockers staged two days of strikes to protest against a new shift system.

Mr Khadar says one reason the port has been inefficient is that it is not operated 24 hours a day or during weekends and holidays. He believes uninterrupted operation is necessary to reach DP World's target of an average of 1,600 containers unloaded a day. At present the rate is 250-300.

Another reason for inefficiency, he says, is that the yard is congested because of lengthy customs clearance procedures.

There are currently too many sectors controlling the port, he says. I have a chart that shows there are 13 stakeholders in this port. So I am married to 13.

DP World  is part of another joint venture in Algeria to build a deep water port in Djendjen in the east of the country. The aim is to create a trans-shipment hub with an annual capacity of 1.5m TEU to compete with Tangiers in neighbouring Morocco.

Mr Khadar says, though, that ultimately Djendjen's success in competing with Tangiers will depend on whether Algeria allows the establishment of an associated free zone.

The concept of a free zone does not exist in Djendjen, he says. But it would complement the port. We will lobby the government to convince it that it is to Algeria's advantage to attract investment, international firms and businesses.

Buoyed by the strong oil prices of recent years, Algeria, which has little experience of free-market economics, has veered towards economic nationalism in the past 18 months. The authorities have decreed they will take a majority stake in any new foreign investments and restrict the repatriation of some profits.

Observers say the new policy is likely to discourage investment in a country that is difficult to work in and still has security problems. They argue that Algeria may not currently need foreign investors' funds, but it requires foreign expertise to create jobs, upgrade skills and transform old systems.

Mr Khadar says DP World is determined to press ahead with transforming Algiers port. It will take us three, four or six months, but there will be a DP World standard in this port.

 

Source: www.ft.com