Abu Dhabi: Cosco Shipping Ports Limited on Sunday broke ground for the construction a new terminal at Khalifa Port and also signed an agreement with Abu Dhabi Ports Company for a container freight station, which is expected to be the largest in the region.
The construction and development of the terminal is expected to last approximately one-and-a-half years and operations will commence in the first quarter of 2019.
The freight station is also expected to start operating around the same time.
Abu Dhabi Ports last year signed a 35-year concession agreement with the China-based Cosco Shipping to build and operate a terminal at Khalifa Port. The total investment in the terminal is about $400 million (Dh1.47 billion). The companies did not reveal investment involved in the construction of container freight station.
The new terminal will add 2.4 million TEUs (twenty-foot equivalent units) to the existing capacity of 2.5 million TEUs at the Khalifa Port with an option to increase it further by more than one million TEUs, taking the total capacity of the port to six million TEUs.
The container freight station will come up in an area spanning 275,000 square metres, with a further expansion of 150,000 square metres.
Captain Mohammad Juma Al Shamisi, CEO of Abu Dhabi Ports, said the strategic partnership with Cosco shipping will boost trade between the two countries and will also open up new markets for Abu Dhabi.
“This is a big bonus for us, freight cost will reduce dramatically. There will be a direct access to international markets and transit time will also be reduced. We will have a very strong access to Asian markets, China in particular,” he said during a press conference in Abu Dhabi.
Since the visit of His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, to China in 2015, the relationship between the two countries has been growing in a number of areas, especially that of economic and trade relations.
China is the UAE’s second biggest import partner behind India. At the same time, the UAE is responsible for one-third of China-GCC trade and one-fifth of Sino-Arab trade. The UAE is considered a gateway to about 60 per cent of China’s exports to regional markets at an annual volume of exchange of $70 billion.
The bilateral trade between the two countries stood at $40.6 billion in 2016. For the first six months of 2017, the relationship has seen $20.254 billion worth of trade, with China importing $6.286 billion, and exporting $13.968 billion, according to the latest update from Chinese embassy in Abu Dhabi.
Chinese companies are also investing in the UAE’s oil and gas sector. Earlier this year, two Chinese companies including China National Petroleum Corporation (CNPC) and CEFC China Energy signed a 40-year concession agreement with Adnoc to develop the emirate’s prized onshore oil fields which will produce roughly about half of Abu Dhabi’s oil production.
Five Chinese companies will also start operations in Abu Dhabi’s industrial zone with an initial investment of $300 million in a boost for the oil-rich emirate’s economic diversification plans.
The UAE and China also set up a joint strategic investment fund worth $10 billion in late 2015, financed equally by both countries. The fund is expected to play a critical role in supporting the ‘One Belt, One Road’ initiative of the Chinese government that focuses on connectivity and cooperation among countries — primarily in Europe and Asia.
“The partnership between Abu Dhabi Ports and Cosco Shipping Ports to develop the region’s largest container freight station will add a new dimension to UAE-China trade relations and is fully aligned with Abu Dhabi’s Vision 2030 to drive growth, attract investment, support economic diversification and create sustainable jobs,” said Dr Sultan Ahmad Al Jaber, Minister of State and chairman of Abu Dhabi Ports, in a statement.