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Palestinian health officials say at least 13 people, including women and children, were killed in two Israeli strikes on two houses in Nuseirat
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Financial Crisis could Hit GCC Ports
ABU DHABI — Planned investments worth almost $40 billion to expand the cargo-handling capacity at seaports in the Gulf could now be at risk due to a steep decline in regional oil revenues and a possible continuation of the financial crisis, a respected research firm says.
Governments and businesses began planning many of these ambitious port-expansion projects at a time when they were flush with cash from oil surpluses. Crude prices peaked last year at around $147 per barrel but have retreated sharply since then and are hovering now at close to $73 per barrel.
This halving of their main source of revenues could force some Gulf oil-exporting countries to cancel or at least postpone some of their port projects. Lower oil prices are of particular concern because governments in the Gulf generate an average of 80 per cent of their financial resources from the sale of hydrocarbons, said M.R. Raghu, Senior Vice-President for Research at the Kuwait Financial Centre, or Markaz.
A prolonged recession is a second threat, Raghu said in an interview earlier this week. A longer slowdown in the global economy would continue to throttle demand for ocean-going freight and commodities. Container ports throughout the Gulf suffer already from overcapacity due to the recent plunge in maritime trade volumes.
Countries in the region plan to enlarge or modernise 35 ports, including some that aren’t yet built. Of 20 projects that have been announced, work is in progress on 12, Kuwait Financial Centre said in a report. Several involve public-private partnerships.
The Kingdom of Saudi Arabia and the UAE have each planned five port projects. Construction work is underway on all those in the UAE, while two projects in Saudi Arabia are still in the planning and design stage.
Total investments already made in the region’s port projects totalled $38.2 billion as of the end of 2007. The UAE accounted for the biggest share of this amount, with around $23 billion.
An additional $843 million worth of projects was completed from January 2008 through July 2009, the report said. The total value of upcoming projects planned in the Gulf is $38.57 billion,
it said.
The volume of shipments to and from GCC ports has grown by an average of around 12 per cent annually over each of the last five years. Imports comprise 30 per cent of this total volume, while exports account for 70 per cent, the study said.
Ports in the UAE claimed the biggest share of cargo volumes among all GCC countries at 61 per cent. Trade volumes at the UAE’s ports rose by 13 per cent on average during the period 2004-2008.
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