Strengthening Djibouti Port’s strategic position


Strengthening Djibouti Port’s strategic position

Everything that Ethiopia imports or exports via the sea pass through Djibouti.
Djibouti Port’s growth hence is tightly tied to Ethiopia. Lately a lot has been happening at the port and Capital’s Teguest Yilma had a chance to sit down with Saad Omar Guelleh, General Manager of the Port of Djibouti to talk about recent expansion projects, the growing influence of China, new trainings and how it is becoming a landmark port in the region. Excerpts:

Capital: Mr. Saad, you are the brother of H.E. Mr. Ismaïl Omar Guelleh, the president of Djibouti, and you are also the General Manager of Djibouti’s Port, which is the backbone of your country’s economy and Ethiopia’s gateway. Is that an asset or a burden in your job? Also could you tell us about yourself, your professional path? As you have worked for a long time in Djibouti’s port, you already have proven your skills.

Mr. Saad Omar Guelleh: Thank you for your question. My professional experience in the Port started as a technician in 1976, then I climbed all the way up. I took several training courses in France, the Netherlands, Israel and other countries to improve my technical capacity and my management skills. These opportunities gave me the chance to gain a lot of experience.
I have 35 years experience in the port, since 1976, and this makes it easier for me to be a manager, since I know all the systems of the port.

Capital: Since 1976, you must have seen great changes in this Port, which has developed rapidly these past few years; could you tell us what the situation is nowadays after the end of DP World’s management? You are now partnering with the Chinese holding company MHCI?

Saad: The Port Of Djibouti SA is located on the exceptional geographical position which is a natural force. This has not only strengthened our competitive advantages but also enable us to keep a step ahead of our competitors. First, 2012 and 2013 were two eventful years that profoundly changed the landscape of Djibouti port industry and anchored the Port of Djibouti in its role as a regional logistics hub, and in particular the historic agreement with the entrance of China Merchant Holdings International (MHCI) in the capital of the new corporation called Ports of Djibouti SA, since January 1st, 2013.
The purpose of this Sino- Djibouti partnership remains the capitalization of knowledge previously acquired from Dubai Ports’ World group, in more than twenty countries around the world, and to strengthen the strategic position of the Port of Djibouti, located at the entrance of the largest global maritime trade route. The initiative comes through reflecting the will of Djibouti government authorities to open new prospects for the development of the country. It forms a part of the vision of Djibouti in 2035, which is the optimal use of existing potentials of the country to make of the Republic of Djibouti a regional logistics hub.
As you know the Government of Djibouti had given the management of the Port to DP World in 2000, and all Djibouti Ports were managed, until 2010, by DP World. Starting from 2011 the Djibouti Government decided to take over the management of Djibouti Port again and let DP World manage the Doraleh Container Terminal (DCT).
At that time, there were only 1.5 million tones of traffic involved; today it has reached more than 5 million tones. We have worked on that; As soon as we took over the main part of the port, we first started to restructure thoroughly all managements.
The issue was how to manage a multi-purpose port? Meaning a port that manages containers and general cargo; knowing that all the containers went directly to the DCT.
So we worked on that and thanks to our partners such as Ethiopian shipping lines, we re-opened the Container Terminal activity of the Djibouti Port and then took on the Messina lines and so on, and every year traffic has been increasing.
The economic development actually ongoing in Ethiopia requires the importation of factories elements, all project cargo, and all kinds of vehicles as well as general cargo and containerization activities of most manufactured products.

Capital: What can you tell us about the development strategies you have planned for this market?

Saad: Within the past 10 years, the strategic planning for us has been the development of specialized terminals by encouraging private sector investments. This has resulted in the construction of new specialized platforms, a grain and fertilizer terminal, an oil terminal and a container terminal, as well as free zone development.
With these finalized, the focus was on the development and improvement of the Port of Djibouti as a multipurpose port. The Port of Djibouti is constantly improving and upgrading the capacity of port facilities to cope with the challenge of continuing growth in cargo which has developed along with the rehabilitation of the Port’s infrastructures.
As part of the new development strategy, the Government of Djibouti has initiated major projects to strengthen our role as a regional hub and logistics platform and to optimize the port infrastructure to keep pace with developments in the maritime world.
As examples, we can cite the main projects, Goubet Ore Terminal, Port of Tadjourah, Tadjourah – Balho Railway, Damerjog Livestock Terminal, and Doraleh Multipurpose Port (DMP).

Capital: Is the multi-purpose port going to replace the older Port of Djibouti?

Saad: Yes, actually the Port of Djibouti shall operate the multipurpose activity. The government of Djibouti is fully committed to make the port of Djibouti SA competitive in the region and offer the highest possible services to its customers. In a region of continuous development, where the economic potential can be used without constraint, the port of Djibouti in partnership with CMHI (China Merchant Holdings International) is looking forward to progress.

Capital: What will you do with the existing port?

Saad: Due to the geostrategic location, near the core of the city, the existing port has the required assets to transform into a Central Business District.
We have highly valuable projects such as hotels, a marina, business district with high standard villa etc. that we can do. We already have a master plan for the development of this port, which we will announce soon.

Capital: How much is the cost estimation?

Saad: The phase I to Doraleh Multipurpose Port (DMP) & Livestock projects will have a total investment of 650 million USD.

Capital: What about the other port projects?

Saad: Yes. There is the port of Tadjourah, the Goubet Mineral port and Damerjog livestock port. For now we take care of everything in each port and we want to dedicate a specialized port for every sector.
Doraleh Multipurpose Port (DMP), will be equipped with modern equipment, and will accommodate 100,000 dwt vessels. This is supported by the fact that the geographical location of Doraleh Multipurpose Port provides a naturally deep and sheltered harbor that will require minimal dredging.
With a quay length of 1200 meters and 5 berths at -16 meters on the first phase, -the DMP will serve any conventional cargo and related services. It will be linked to a road and rail transport in order to develop an integrated transport and economic corridor.
In response to the growing demand of a dedicated terminal for the shipment of livestock, the port of Damerjog will further enhance the position of Djibouti as a platform as an export hub to Middle East livestock growing demand and it will constitute the first livestock free zones.
The Damerjog Livestock Port includes a quay of 655 meters long with handling capacity of 10 million heads of livestock, a holding area of 50 hectares with a total capacity of 150,000 head of animals.

Capital: When are these ports expected to be ready?

Saad: Tadjourah is planned to be completed by the end of 2015 or beginning of 2016. DMP is planned to be completed two years from now. Damerjog is expected to be completed by 2016-2017 and Goubet’s port will be finished by the end of 2016.

Capital: As the CEO of the Djibouti Port, what are the current development plans or changes that you specifically want to introduce?

Saad: We want to develop several things. First of all the traffic we have with Ethiopia is based on imports and exports of Ethiopia, but we want to go further for instance to South Sudan. Our objective is to create a multi-modal platform in Djibouti; we want to handle all the traffic coming to East Africa from Djibouti and dispatch it through railway.
Let us not forget that the railway between Ethiopia and Djibouti is under construction and when completed it will facilitate and reduce the costs of the multi-modal traffic and make the prices competitive.
We also want to develop the transshipment traffic; today we have more than 10 millions containers passing near us and not through us. With our partners we are studying how to get those containers that are passing through neighboring ports such as Jeddah etc. So we are working on getting this market and develop it. It’s a challenge but all the directors are working hard to put in place a five-year plan within the next year. By 2015 or 2016 we want to put the plan in action and fix objectives that we have to develop to respond to the needs.

Capital: The port is also involved in training a large number of graduates abroad in shipping and maritime operations. Will the port be able to absorb all those newly trained personnel? And how did you select and conduct the trainings?

Saad: The port is the back bone of the country’s economy. The continuous development of our employee’s competencies is fundamental to the sustainability of the Port. We have already finalized the training of 15 young baccalaureate holders in a maritime Academy in Alexandria, to become the future officers of the Merchant Marine. We have to have clear objectives to create jobs for newly graduate young Djiboutian. Nowadays we have students that are specialized in different fields. These students are sent to India for further education. The port has invested more than USD 3 million in training, and currently we have more than 120 students who will soon complete their learning.
Some of these students are now working on the vessels of Ethiopian shipping lines for instance.
As for the students’ selection, Ahmed Marine University of India came to Djibouti and did it from here. The students have been trained in various fields such as Tag master, tower control, shipping operation, nautical miles, marine equipment operation, naval architectural, harbour planning and engineering and marine electric engineering. We have targeted specific objectives and specialization in all those areas and they will come back as per plan to work in the new ports projects.

Capital: When you train youngsters, there’s always the problem of ‘brain drain’ by neighboring countries that will take them.

Saad: We have lot of opportunities here in Djibouti, and this why we want to increase the number of technicians and specialists.
Actually people from the port of Berbera and Mogadishu were trained here in Djibouti so as to better structure the Somalian port. I went there myself; we took over the port, brought their captains to Djibouti, trained them and send them back to their port with our technicians. We have several technicians there now. And we also supported them with tugboats and other material.

Capital: This shows that Djibouti is establishing itself as the best port that can be a model for the entire region; it is quite an impressive journey from where the Port used to be and how it has transformed today with much bigger plans than itself, including training and supporting other ports in the area.
You also have opened the container terminal with two maritime lines here for Ethiopian Shipping Lines and Messina lines…
Saad: It is true that the port of Djibouti will be a model for the entire region. Port of Djibouti is the leading provider of assistance services to vessel to vessels (piloting, towing and mooring) for all terminals in Djibouti; we have significantly strengthened our capacities in this activity. We have invested in this valuable core of business with the acquisition of a new naval fleet (tugboats, mooring boats, pilot boats, etc…) to serve the last generation of ships.
Besides we have purchased a new floating dock of 1750 tons in order to ensure the maintenance of these tugboats and other vessels. As a result, by investing in this new facility, the Port of Djibouti SA became the second largest port in East Africa which has such installation. This Djiboutian expertise allows us to offer our customers high quality of service which has been confirmed with the renewal of our ISO 28000 Certification.
Also ESL and Messina lines are working with us, and there are other liners coming. With the DMP we will increase the number of liners and try to enhance the capacity because it’s currently limit ed, if we want to have more vessels of third generations we need a good capacity, which with the DMP we can handle.

Capital: And Ethiopian Shipping Lines with their new vessel fleets?

Saad: We congratulate our Ethiopian partners, particularly ESL and it is very important to mention that with the new fleet, the traffic has doubled. ESL is our first partner and the port of Djibouti provides the best support for facilitating business.

Capital: Ethiopia has made changes in the operation of truck owners’ associations, so as to expedite transportation systems to and from the country. Some transporters believe that the problem is not really with the operation, but elsewhere. What do you think is the solution; should Ethiopia add more trucks?

Saad: A lot of improvements were made; we have made several meeting with the relevant Djiboutian and Ethiopian authorities to find the best way to solve this issue.
Djiboutian and Ethiopian transporters are trying to improve the number of their trucks, but once the railway starts, these problems will be over.

Capital: Finally where do you see the future of Djibouti?

Saad: We are on a good path. Since the financial crisis has touched every country, we are always attentive. One should be optimistic in life and have hope. Our future will be better, we will try to work and make Djibouti a Hub of East Africa, because we have a great partner behind us, especially Ethiopia and all the other East African countries.
Capital, October 19, 2014