UNCLAS SECTION 01 OF 02 DUBAI 003374

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EWWT ETRD ELAB AE IZ IR
SUBJECT: KHOR FAKKAN PORT - A TRANSHIPPMENT HUB

1.(SBU) SUMMARY: Senior officials at Khor Fakkan Port (KFP) met
with Congenoffs and provided an overview of the port's
operations, capacity, and expansion plans. Nearly 95 percent of
the containers entering KFP are transshipped to other countries
and do not enter the UAE. The port will open berths to handle
Post Super Panamax container in mid-June 2006. The port is
installing a container x-ray facility in an effort to meet the
standards of the US' Container Security Initiative. End Summary.

2.(U) Khor Fakkan Port (KFP) Administrative Manager Mohammed
Kareem Saad and, KFP Harbor Master Captain Abkar Hasson M. Dabla
met with Congenoffs on May 20, 2006. The port officials provided
an overview of the port's operations, capacity, and planned
expansion.

Background
--------------

3.(U) KFP, which opened in 1979, is a one of two ports on the
UAE's east coast. KFP is operated by the Sharjah Ports
Authority. Although KFP primarily handles container ships, it is
capable of handling break-bulk and ro-ro vessels. The lack of
adequate roads has been an obstacle to KFP's becoming a major
port of entry for cargo bound for the UAE, Saudi Arabia, and
other Gulf States. The government of Sharjah plans to build a
highway that will link KFP with the UAE's main cities and make
the port more attractive as a gateway to the UAE and other Gulf
states. There is no free zone associated with KFP.

Transshipment of Containers
--------------

4.(U) KFP's primary activity is transshipping containers. Saad
estimates that about 95 percent of the container traffic is
transshipped and never enters the UAE. Large container ships,
mostly operating on regular schedules, come from Europe and the
Far East discharge and load cargo in KFP. The vast majority of
containers discharged at KFP are loaded onto smaller "feeder"
ships, which then take the containers to regional ports,
including Bandar Abbas, Iran, Dammam, Saudi Arabia, Jebel Ali
(UAE), and to ports in India, Pakistan, and Oman. In addition to
feeder ships, wooden dhows also call at KFP to take cargo to
Iran, India, and Pakistan.

5.(U) According to Saad, most containers are discharged onto the
quay at KFP

and remain in the port for only a few days until
transshipped. If possible, containers are transferred directly
from a larger vessel to one of the feeder vessels. Congenoffs
observed containers being transferred directly from a large
container ship to a feeder ship, the MV Memzar. The smaller ship
was outboard and the gantry crane lifted the containers from the
larger liner and placed them on the smaller vessel. The
containers were not brought onto the quay.

Current Traffic
--------------

6.(U) United Arab Shipping Company (UASC), CMA-CGM, and Hanjin
have the largest operations at KFP. As the port expands, KFP is
attempting to attract more shipping companies to use the port.
Saad claimed that a large East Asian shipping company, whose
name he couldn't reveal, will soon sign an agreement for
scheduled service at KFP.

7.(U) Currently, about 60 large container ships and more than
100 feeder ships dock at KFP every month. KFP handles
approximately 2,500,000 TEUs (twenty foot equivalent unit) per
year, ranking it as the 43rd container port in the world by
number of TEUs handled.

Container Traffic with the US
--------------

8.(U) KFP handles nearly 25,000 TEUs going to or coming from the
US per month. US traffic represents a little over 10 percent of
the containers handled by KFP. All cargo between the US and KFP
is transshipped via European or East Asian ports, as no ships
sail directly between KFP and US ports.

Container Traffic to Iran and Iraq
--------------

9.(SBU) At present, around 3000 TEUs are transshipped to Bandar

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Abbas in Iran. Saad said he was not aware of the types of cargo
that was shipped to Iran via KFP. Over the past few years, KFP
has seen a resurgence of transshipments to the port of Umm Qasr
in Iraq. Most of the 3000 Iraq bound TEUs per month are
destined for coalition forces.

Port Facilities
--------------

10.(U) The port currently operates five berths with 14 gantry
cranes along 1496 meters of pier. The deepest berths are 14
meters deep. Two additional berths with four gantry cranes
designed to handle "Super Post Panamax" vessels are scheduled to
begin operating in mid June 2006. CMA-CMG operates the world's
largest Super Post Panamax vessel with a 9700 TEU capacity.
This vessel is expected to call at KFP once the new berths open.

11.(U) KFP has the capacity to store 32,000 TEUs. An additional
12,000 TEUs of storage will become available when the Super Post
Panamax area becomes operational. Three times during 2005 KFP
reached maximum capacity.

Customs and the Container Security Initiative at KFP
-------------- --------------

12.(SBU) Customs at KFP are handled by the Emirate of Sharjah.
Only containers that enter the UAE are subject to customs
inspection. Neither Sharjah Customs nor KFP appear to take
interest in cargo that enters the port for transshipment.

13.(SBU) KFP is installing an x-ray shed for container
inspection. Saad said that the port authority was installing
the x-ray as part of an overall upgrade that would allow KFP to
become part of the US' Container Security Initiative (CSI).
Once the x-ray becomes operational, 100 percent of US bound
containers will be x-rayed. Saad commented that he had wanted
to buy gamma scanners, but the port authority opted for lower
cost x-ray scanners.

Labor at the Port
--------------

14.(U) Laborers at KFP are primarily from Sri Lanka and the
Philippines. KFP has an agreement with the Sri Lankan port
authority, whereby Sri Lankan employees are assigned to KFP for
periods ranging from three to five years. This brings well
trained Sri Lankans to KFP and is a means by which the Sri
Lankan government rewards staff with a high-paying assignment in
the UAE.
BURNS