Abu Dhabi Ports had awarded China’s Cosco Shipping Ports a concession agreement to operate Khalifa Port’s Container Terminal 2 for 35 years.
The deal, which includes a five-year renewable period, will see the company operate the terminal from the first half of 2018 with an initial 800m of quay. A further 500m will be added by 2020.
Cosco plans to invest $400m in building the terminal, Raymond Wong, deputy general manager, Cosco Shipping Ports, told Reuters.
He said the company would divert ships from Dubai’s Jebel Ali port once the terminal was completed.
The concession is worth $738m in total, according to filing by Cosco on the Hong Kong Stock Exchange, and will span roughly 70 hectares with three berths.
It will add 2.4 million Twenty Foot Equivalent Units (TEUs) a year to the port’s existing 2.5 million TEU capacity.
There is also the option for a further 600m of quay length to meet anticipated volume growth, bringing the additional capacity to 3.5 million TEUs.
Cosco is establishing a joint venture to operate the terminal, named Cosco Shipping Ports Ltd – Abu Dhabi, to operate the terminal, with Abu Dhabi Ports taking a minority stake.
“The signing of the concession agreement between Abu Dhabi Ports Company and COSCO Shipping Ports Limited will significantly expand trade between China, the UAE and the broader region. It will greatly enhance the UAE and Abu Dhabi’s role as a key logistics and trading hub, between East and West and will also serve to further diversify the UAE’s dynamic and growing economy,” said Dr Sultan Ahmed Al Jaber, UAE minister of state and chairman of Abu Dhabi Ports Company.
Cosco chairman Wan Min said the terminal would be the second in which the company holds a controlling interest.
“With the strong support from the large container shipping fleet of Cosco Shipping Group, Cosco Shipping Ports will dedicate its efforts to develop Khalifa Port Container Terminal 2 as a hub of the Upper Gulf region in the Middle East for international container shipping liners,” he said.
Cosco operates a network of 46 terminals and 169 berths across China, Hong Kong, Taiwan, Korea, Singapore, Greece, Turkey, Egypt, Belgium and the United States