Mogadishu Port has been upgraded; ships are docking and revenue has improved
BY TSI TEAM
Six months ago, Mogadishu ocean Port was a government port. It worked, though not to its full capacity.Individuals and companies moved cargo through it. There were no proper structures for monitoring port activity, no proper revenue collection structures, no proper cargo handling equipment, and most of all, no will to turn the port into a revenue crating venture. Not surprisingly, the government received no revenue from the port.
Then the Turkish company Albayrak moved in, signed a 20-year contract with the government and set about creating order at the port. “A lot has changed since we took over the management,” observes the company’s immediate former general manager, Mustafa Adali According to Adali, the company has implemented new customs and goods clearance procedures that have increased efficiency. “These new structures ensure that we collect more revenue and provide better services. Container vessels used to take 10 days in the past, now they take four days to clear,” he says.
At the end 2013 the port handled 17,000 containers, that changed too because by the end of 2014, the port had handled 54,000 containers and by the end of this year, Adali is projecting a 30 per cent increase in cargo output. Since Albayrak took over six months ago, the company has made $13 million gross income. The port management contract stipulates that 55 per cent of the revenue be paid to the government. It incurs about US$800,000 as monthly running cost. Adali sees the port as of strategic importance to Somalia.
“You can’t do foreign trade with other countries without proper ports. Air cargo is very expensive, probably five times more expensive. If Somalia has to make overseas import and export trade work, then its commercial ports have to be in order,” Explains Adali
The strategic nature of this particular port is not lost in all his talk. The only two large ports nearby are in Kenya and in Djibouti, and the ports of Somalia can be used as a transit station for cargo heading to Ethiopia. The main aim of Adali and his team is to open a direct channel between Turkey and Somalia. Currently, Turkish cargo heading for Somalia has to make port calls in UAE or Oman. The opening of that direct channel is anticipated to create a shift, especially among European shipping firms.
With a present capacity to handle 250,000 containers annually, Albayrak would like to get the port to international levels with Adali observing that the Somalia Indian Ocean coastline is geographically better placed and naturally well endowed than most coastlines around. Before the Turkish company took over, stackers to handle operations on land were completely out of order. So they brought in new ones. At the cost of US$3 million, they brought in one mobile harbour crane to use in container operations, this created more efficiency and reduced the cargo handing time from 10 days to four days.
Adali observes that an efficient port service is critical for the Somalia economy, since it will attract more business persons in the export and import business. “This is a win win situation: the port wins, the government wins and the businessman wins.”
The only worry at the moment is lack of exports leaving the country. Most containers come in with cargo but end up leaving empty on their journey back because exports are minimal. The charge on the empty container still goes to the trader even though they are not benefiting from the round trip.
Port authority believes that once the country gets its marine and agricultural sectors in good shape, those empty containers will be full of livestock or bananas or fish as they head back to Dubai.