Private Sector Investments in Iranian Ports: $626 Million Under 333 Contracts

EghtesadOnline: The private sector in Iran has invested a total of 161.23 trillion rials ($626 million) in the country's ports under 333 contracts to date.

News ID: ۷۵۰۹۵۷

12 September 2020

A total of 3.57 trillion rials ($13.87 million) were invested by the private sector during the first quarter of the current year (March 20-June 20) with the purpose of developing and maintaining port infrastructures and equipment, IRNA reported.

The private sector also invested 2.83 trillion rials ($11 million) in Q1 under five contracts to enhance businesses.

The investment includes the development project of 30-million-ton oil docks in Shahid Rajaee Port in southern Hormozgan Province which, upon its completion, will increase the port’s petroleum exports by 30%.

Located 23 kilometers west of the port city of Bandar Abbas, the capital of Hormozgan, Shahid Rajaee Port is Iran’s biggest container port. Over half of Iran’s commercial trading is conducted via Shahid Rajaee that also accounts for over 85% of all container traffic.

“The construction of Shahid Rajaee Port’s new rail-oriented mineral terminal was one of the major projects whose contract was finalized last [Iranian] year [March 2019-20] between PMO and the private sector. As we speak, the project is under study by the investors and the execution phase will begin this year,” Mohammad Rastad, the head of Ports and Maritime Organization, said recently.

Noting that the 33-year build–operate–transfer project was worth 50 trillion rials ($194 million) when it was signed, the official said, “Once it’s completed, the country’s exports of minerals and steel via the most important container port of the country [i.e. Shahid Rajaee Port] will improve considerably and in line with the country’s steel export targets.”

The construction of Shahid Rajaee Port's new mechanized mineral terminal will allow vessels with a capacity of 150,000 tons to berth there, according to Ali Hassanzadeh, the deputy head of Ports and Maritime Organization of Iran.

He made the statement at a ceremony held on the occasion of the signing of the contract between Ports and Maritime Organization of Iran and private sector for terminal’s construction last year, which is said to be the biggest in the region.

Currently, vessels with a capacity of 60,000 tons are able to berth at Shahid Rajaee Port.

This will be the second such terminal as Life Trade Promotion Company signed an agreement with Sistan-Baluchestan Ports and Maritime Organization in May 2018 to establish Iran’s first fully mechanized mineral export terminal in Chabahar’s Shahid Beheshti Port.

“The establishment of the new terminal will decrease waiting time for vessels and increase ports’ productivity,” Hassanzadeh was quoted as saying by ILNA.

“The project has three construction phases and the development of each phase takes three years covering 180 hectares, each spanning 60 hectares.”

In addition, the project includes the establishment of a 15-megawatt power station.

The terminal is also expected to create 500 sustainable direct jobs. The final capacity of the terminal will reach 50 million tons per year upon the completion of the project.

Speaking with IRNA on the advantages of the new terminal, former director general of Hormozgan PMO, Allahmorad Afifipour, said the terminal will facilitate the export of minerals and decrease transportation costs.

According to Afifipour, the capacity of Shahid Rajaee Port’s current terminal is currently 14 million tons per year.

Also addressing the same ceremony, the PMO chief told IRNA that the terminal will ease the current heavy port traffic and help meet the demand for steel exports, as it is mechanized.

He noted that the new contract is a giant step in the development of ports’ capacities by attracting investment from the private sector.

Rastad also noted that the operational period of the contract is 33 years.

The new terminal is set to become the biggest mineral terminal in the Persian Gulf and Sea of Oman, and will bring about a major development in Iran's mining industry, considering the country’s exceptional mineral capacity.

According to Mohammad Reza Rezaei Kouchi, the head of Majlis Development Commission, Shahid Rajaee Port has a 6% share in the region’s total container throughput per annum, ILNA reported.

The third phase of Shahid Rajaee Port expansion project is being carried at full-throttle with an investment of 12 trillion rials ($46 million), according to the newly-appointed director general of Hormozgan Ports and Maritime Organization.

“The project includes the construction of 1,400 meters of wharfs and 113 hectares of hinterland container area, and 4 million tons of dredging among many other infrastructural undertakings,” Alireza Mohammadi Karajiran was also quoted as saying by Fars News Agency.

The project’s completion, said the official, will help increase the port’s nominal container throughput capacity from the current 6.3 million TEUs to 8.4 million TEUs (more than a 20% boost) and vessels with capacities as big as 18,400 TEUs weighing 185,000 DWT will be able to berth at the wharfs.

As such, Mohammadi said, Shahid Rajaee Port has better chances of elevating its ranking in the region.