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Bahrain Shipping Report Q4 2011
Business Monitor International, Oct 2011, Pages: 85
Bahrain's troubled political outlook continues to make BMI apprehensive with regards to its ports sector, as the economy struggles to see growth of over 1%. Nevertheless, BMI project tonnage throughput at the Gulf country's primary port of Khalifa bin Salman (KBSP) to return to growth, and for container handling levels to continue to grow.
On a global level BMI continue to be concerned by the state of the shipping industry. Container shipping companies are struggling to push through rate increases, and liquid and dry bulk operators are contending with some of the lowest daily returns in years. This is a result of overcapacity, which looks unlikely to ameliorate anytime soon. There are fresh challenges on the way, including the fleets of mega-vessels being built by Vale and Maersk Line .
Headline Industry Data
- Growth in KBSP total tonnage throughput forecast at 11.0% in 2011, with average annual growth forecast at 7.8% between 2011 and 2015.
- Growth in KBSP container throughput forecast at 8.0% in 2011, with average annual growth of 6.0% over BMIs forecast period.
- Real growth in total trade forecast at 5.0% in 2011 and to average 4.8% over the medium term.
Key Industry Trends
- GOP Board Approves New Port Tariff Structure In June 2011 the board of Bahrain's General Organisation of Sea Ports (GOP) approved a new tariff structure, to be implemented at all ports in the country. The approval followed intensive discussions between the board and stakeholders, including the private sector, over the last few months. Prior to this the tariff structure had not been revised for more than 20 years. The new structure is part of the GOP's efforts to streamline its charges for port and maritime services, including services offered at Mina Salman and to private jetties. The new structure will allow Bahraini ports to become competitive on a regional level, as well as cover costs to provide maritime infrastructure and services that reach high international standards. The GOP has been asked to implement the new tariff structure in two phases between June 2011 and January 2012.
- New Terminal For Mina Salman Port In August the GOP announced plans for developing a Buildings Materials Terminal (BMT) at the Mina Salman port, the facility which has been largely superseded in recent years by the more recent Khalifa bin Salman Port (KBSP) development. The GOP is drawing up the tender and will offer the terminal on a refurbish, maintain and operate basis. The terminal is said to be in line with the government's strategic plan for Bahrain, which includes large building works.
- UASC Establishes New Company In Pakistan As Part Of Global Expansion Strategy UASC is expanding its global reach further in 2011 with the launch of a new joint venture (JV) in Pakistan. With Pakistani trade set to grow by about 9% in 2011 and 2012, BMI believes this new undertaking will boost UASC's volumes, and could spur the liner to introduce new service calls at the country's ports.
Key Risks To Outlook
Should the government fail to address some of the protestors' main grievances, Bahrain's political crisis could rumble on for longer than expected, with the risk of the opposition becoming radicalised increasing by the day. It remains unclear what impact 2011's political crisis will have on Bahrain's long-term economic outlook. Should investors begin to reassess the costs of doing business in the country, and begin relocating to Dubai or Doha, Bahrain's growth outlook would suffer accordingly. All of this could add downside risk to BMIs port throughput forecasts for Bahrain.
Upside risk comes from the news that a new building materials terminal is to be constructed at the port of Mina Salman, which has been put to seed somewhat in recent years.
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