Ports operator KGL Ports International Company (KGL PI), which has initiated moves to seek long-term concessions to operate several ports in the Middle East-North Africa region, is close to finalising its first deal outside the Gulf Co-operation Council (GCC) region, namely Damietta Port in Egypt, the company chief has said.

The company is also making progress in modernising three ports it is currently operating, one each in Kuwait, Saudi Arabia and the UAE, and has registered substantial increases in throughput traffic, said chairman and CEO Mohamed Al-Mazeedi.
At the Kuwaiti port of Shuaiba, it is targeting a doubling of the throughput this year and expecting a modest increase in cargo handling at Jeddah Islamic Port and a near-tripling of throughput at Ras Al Khaimah (RAK), where a major expansion is underway, said Al-Mazeedi.
“Shuaiba had doubled its operational throughput in 2005 compared to the previous year and the plan is to nearly double the level this year,” he said. Throughput was 80,000 teu in 2004 and 160,000 teu in the following year. The projection for this year is 300,000 teu.
The port’s operational capacity is 350,000 teu, but if discussions with the Kuwaiti government authorities succeed, the company will invest $60 million to take the capacity to a million teu, said the official.
KGL PI plans to replace old equipment in keeping with its vision to modernise cargo facilities, expand capacity and introduce operational efficiencies. Shuaiba now has four container berths and just three gantry cranes operating although the berths can conveniently operate up to six. “The renovation calls for replacing the older cranes, increasing the number of operating cranes to at least six and introducing state-of-the-art equipment similar to what we are installing in Jeddah and RAK,” said Al-Mazeedi. 
The company is also in the process of establishing internal container depots (ICDs) outside the security-sensitive port area, a move that will reduce congestion at the port gates and overall enhance security.
At Jeddah Islamic Port, which it is operating with Saudi partner Gulf Stevedoring and Container Company, the company has spent $150 million to modernise its container terminal. Throughput the port handled in 2004 was 1 million teu, the figure rising to 1.25 million teu in the following year and expected to reach 1.5 million teu this year. The company was granted a 20-year concession to run the port from 2000.
Its third concession, which was granted for operating RAK, is valid for 23 years, starting from 2004.
Immediately on taking over at RAK in late November of that year, KGL PI began a first-phase expansion to create capacity of 300,000 teu by the beginning of 2007 when construction for the phase will be completed. According to estimates, demand for the port will require capacity of 150,000 teu, giving it much spare capacity.  But KGL PI is already preparing to meet future demand, expecting a business boom and greater cargo traffic.
“The interesting thing is that we have an agreement with the government to implement in 2007 the second phase to add two berths and increase capacity to 850,000 teu,” said Al-Mazeedi. “Construction for that phase begins in 2008 and should be completed by the end of 2009.” The second-phase construction will cost $45 million and plans for the third phase are being approved. “By the end of this year, we’ll finalise plans to raise capacity to 3 million teu by the end of 2012. RAK, which now has a single berth operating, will thus witness a tremendous transformation.
“This is a good example of long-term planning, one of which KGL PI is very proud,” remarked Al-Mazeedi.
The company’s vision is to look beyond Kuwait and the GCC region into high-potential areas further afield to become eventually a global ports operator. By the end of March, the company was in negotiations with some 14 ports in the Middle East-Mediterranean region, and was closer to finalising at least one deal.
“We’re negotiating to sign a concession agreement on Damietta Port at the end of May and the plans have almost all been approved,” said Al Mazeedi at the end of March.
He added: “The terminal will be a greenfield development and a landmark project. We will create a terminal of capacity 4 million teu, which will be operational in 2008. Cost of the construction is estimated at $650 million and we are expecting a 40-year concession.
“Our business development is pursuing several other initiatives, and our goal is to obtain two additional ports every year.
“We have 12 terminal operations opportunities being pursued by business development and negotiations are in various stages. We need to determine how good a deal will be within our strategic road map.”
Al-Mazeedi said he expected one more port to come aboard KGL PI’s network before the end of this year.
“The ports that look encouraging with regards to our road map are all located in areas around the Gulf and RAK including Iran and in the region of the Red Sea and the Mediterranean ports in Syria, Lebanon and Egypt.”
KGL PI is a subsidiary of Kuwait and Gulf Link Holding Company KSCC, which in turn is fully owned by Kuwait and Gulf Link Transport Company KSCC, a publicly traded and listed company on the Kuwait Stock Exchange.
Incorporated in July 2004, KGL PI directly employs around 250 employees working mainly in the Shuaiba Container Terminal operations. The company will be undertaking large-scale recruitment to augment operations at the Shuaiba container terminal as well as to implement the RAK container terminal project.
“Being the first Middle East-based, internationally recognised, privately owned investor, developer and operating manager of ports, KGL PI is in a very unique position to make a difference in the field of port development and management,” said Al-Mazeedi in a statement.
“The extensive experience and know how it possesses is the base for its strength and uniqueness. When compared with a very aggressive growth strategy, strong financial capabilities and partnerships, an outreaching automation and information systems policy and world-class operational and administrative processes, the result is a company in a class of its own,” he observed.
”Such strengths are magnified when integrated with similar strengths of other KGL subsidiaries and this produces synergies and total supply chain capabilities.
“The total realisation of all of this potential is achieved by KGL Ports International via the modern management philosophy of applying ‘best practices’ in all that it does.
“One of the most important aspects of such practices and management philosophy is being ‘customer focused.’  KGL PI realises its ultimate success will come from ensuring that all its strength and competitive advantages are translated to ‘value propositions’ for its customers.  In this respect, being ‘customer focused’ is KGL PI’s road map to making a difference in the ports industry.”
An example of KGL PI’s customer-focused approach to developing and implementing solutions was the adoption of the “inter-port transfer” (IPT) system at Shuaiba, Al-Mazeedi said.  Inter-port transfer allows shipping lines to discharge at Shuaiba port yet enables consignees to receive their containers at Shuwaikh.
In addition, KGL PI has installed Navis as of January 2006 at Shuaiba, which, through its web-enabled application, allows shippers and consignees to perform many of their cargo-related tasks from the comfort of their offices.