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Short and Medium Term Development for Umm Qasr
Robert C. Haywood, SEDA-MND(SE)
April 9, 2008
Basra

Summary and Conclusion:

The Port of Umm Qasr is an outdated, badly operated, insecure small port in Southern Iraq, which will increasingly limit the economic potential of the country. Access to the port is naturally limited by its shallow river location, high silt deposit rates, long approach and international boundaries. Umm Qasr activities are also limited by man-made obstacles such as wrecks, UXOs and minefields encroaching on its single, narrow channel. Despite these limitations, for the next 10 to 15 years Umm Qasr is clearly Iraq's most viable international port and one that is struggling to achieve a small fraction of its potential traffic.

Numerous surveys of the port have stated that the currently operating equipment for cargo handling is inadequate for a vibrant, functioning port. However, the capacity of the port with its current equipment is substantially greater than what is being achieved, and additional equipment alone would have little impact on the port’s overall throughput or employment because the current operating systems and procedures are already incapable of productively utilizing and maintaining the port’s quite substantial current assets.

In a port suffering from organizational chaos, even manual systems will permit substantially improved port efficiency. Training in systems to minimize cargo handling, documentation management, and customs handing, yard management and the other “software” of port management would not only consume fewer resources, but have more immediate impact than new equipment purchases. Such systems programs should also be coupled with a program of clearing of the quay-side, marshaling yards and warehouses in the port of all derelict equipment, containers, rubbish and other nonessential items, and the development of a preventative maintenance schedule. Work on this aspect of the project could begin almost immediately with positive economic effect.

Natural Port Limitations

The Um Qasr Port was designed to service third generation container ships, and similar sized ships of about 240 to 290 m in length with a capacity of up to 3500 TEU(20 foot equivalent units), and a draft of 12 m fully loaded. Today less than 7% of the world's commercial freighter fleet is third-generation or smaller and far less then 1% of the ships being built are that small.

However, due to the difficulty of maintaining the channel, only second generation container ships and similar sized grain vessels having a maximum depth of 10 meters and first introduced about 1970, can access the berths on a regular basis. These ships carry a maximum cargo of about 50,000 tons or 2000 TEU. Perhaps due to the slow operations of container cranes-observed during the port visit to be operating at 10% of best practice-most of the container traffic arrives on first-generation vessels carrying no more than 1000 containers each. (With low crane movement rates, small vessels spend less time in port) .

Meanwhile, the eighth generation of container ships, carrying 14,000 TEU, was launched two years ago and the ninth generation, carrying 18,000 TEU, is already on the drawing boards. Current generation container ships on average are 40% faster and have half the operating cost per container as first-generation ships. Continued use of these small “feeder ships” imposes a significant burden on the Iraqi economy through several mechanisms. Directly there are increase transit times from ports of origin, increased handling charges due to an additional transfer at a hub port, loss of security which translates into increased insurance rates (this is particularly true for bulk and break bulk cargoes). In addition either directly, or indirectly, the country suffers from the relatively high cost of maintaining a port with low utilization rates. This translates either into higher port charges or a national subsidy of port operations.

Indirectly, a country with a poor port will be at a competitive disadvantage in attracting foreign investment and stimulating exports. The country will be unable to attract regional distribution centers and thus not enjoy lower costs on materials and parts for its own industries. Dubai provides an excellent example of the power of an efficient port in a country that had no natural advantage in port operations for modern commercial vessels.

For most of its length the channel is too narrow for even first-generation ships to pass safely. Once committed to the channel there is no place, except the port basin, that offers sufficient room for the ship to turn around, and only a few places where the channel is wide enough to allow passage under way. This limitation is exacerbated by a 50 nautical miles transit between the port’s berths and the port’s anchorage and the lack of an arrival management system. The result is that the country (or importers and exporters) is charged millions of dollars annually in demurrage charges as a penalty for failing to unload cargo in a timely manner.

It is reported that silt collects at a rate of over two million tonnes per year. Portions of the channel are reported as having a silt-up rate of over 1 m per month. Dredging in recent years has not been adequate to maintain channel depth. Indeed, recent charts indicate a depth of only 9 m is maintained in portions of the channel and that even generation to ships must carefully time arrivals and departures. This timing is made difficult by the lack of a communication system in the channel and the difficulty of ships passing. Dredging and other channel maintenance tasks are also made more difficult, and expensive, by mine danger areas flanking, even encroaching upon, the buoyed channel.

Widening of the channel is also limited by the fact that the river mouth is bisected by the Kuwaiti-Iraq border. Kuwait is in the process of building a new port on Bubiyan Island (which is currently designed to be a 13 m depth port), and has not been cooperating with Iraq in the development or maintenance of the UQP channel.

The entrance to the channel is also affected by two hazardous wrecks at its entrance and at several points including approximately 5 nautical miles and 12 nautical miles from the start of the channel where very shallow wrecks-perhaps only 3 m under the surface-lie near, or even encroach upon, the marked route.

While some of these factors can be improved with the investment of substantial effort and resources, the change in the flow pattern of the SAA waterway has been detrimental to the maintenance of the channel into UQP. Dams and water diversion along the river, both in Iraq and in other countries, have on average only reduce the river flow by approximately 10%. However, it has dramatically changed the timing of the water flows eliminating flood stages that would naturally help flush the channel.

For these and other reasons it should reasonably be considered that the useful life of the UQP as the international shipping outlet for Iraq is limited to 10 to 15 years. This life will only be achieved with constant and increasingly intensive dredging. The current capacity of the port in this regard appears inadequate, and a program to assist the port authority and other appropriate groups with maintaining an intensive dredging operation is of critical importance. Unfortunately it does not provide a significant opportunity for unskilled labor. Without proper dredging the port of Umm Qasr might have to limit cargo weights within a few months. As will be discussed briefly in the final paragraph the dredging operation might eventually become a resource for a transition to a better port.

Port Infrastructure Almost Adequate

While port studies note that there is a great quantity of landslide port equipment that is obsolete, inoperable or otherwise unusable, it is not necessary, or efficient, to repair or replace most of this equipment.

In significant areas the port appears to have more than sufficient infrastructure for handling its current volume and short-term needs. Before 2003 the UN reported that UQP handled approximately 100,000 containers per year. It currently appears to handles approximately half that. The two operating Chinese cranes, even assuming extremely poor efficiency where they are operating only half the time at half the rate of skilled operators should still be able to make over 150,000 container moves a year. Since a significant portion of the port’s container traffic arrives, and is offloaded, using ships equipment, the container capacity of the port is easily four times the current load. There may be a few shortages in yard handling equipment such as container lifters stackers, or straddle cranes but such equipment, but even here the available equipment is sufficient to operate the container terminal. As covered in the next section, proper management and operations should clear equipment out of the port within 24 to 48 hours and minimize redundant movement of any box. It should in fact be possible to stack most incoming containers on haul-away transports so that they never enter the port’s active container stacks.

The grain elevators and conveyor systems are a critical component of the port’s infrastructure. The terminal operator reports that he can handle 5000 to 7000 tonnes of grain per day, which is approximately equivalent to the 2 million tones that Iraq needs to import. Some observers and port logs indicate that the equipment can unload perhaps a 30% greater volume than is required. The general consensus is that the equipment is fragile and that some of the parts may be near obsolescence. The condition of this equipment and its reliability should be assessed and spare parts secured for critical repairs.

It should be noted that while a significant portion of Iraq's grain needs are imported through the port, the storage capacity with in Iraq is reported to be over 5,000,000 metric tons or 120% of yearly consumption. 2,000,000 metric tons are located in Nineveh Governor and roughly corresponds to that regions current production. Thus it can be assumed that just before harvest these elevators would be nearly empty. The storage levels and other silos has not been determined here.

In Basra there are only two significant silos with 58,000 metric tons at the port and approximately 68,000 metric tons in a Basra city silo. The consumption in the area is an estimated 45,000 metric pounds per month.

The break bulk and manual bulk operations at the port are primarily supported by shipboard equipment and manual labor. This is typical of ports of this capacity in developing countries. Given the high levels of unemployment and the labor rates in Iraq continued employment of stevedores in the port would appear to be preferential to the use of laborsaving capital equipment. It would no doubt be faster to unload ships with more equipment, but quay space does not appear to be a limiting factor.

If berth space becomes scarce, three ships that are currently reported to be under arrest and “for an indefinite duration” may well be moved to less critical areas, such as being collectively moored on berth nine.

There is no doubt that manual loading/unloading is an untidy process when compared to modern port practices. But modern port practices were developed to conserve expensive labor only in developed countries over the last hundred years. Some quasi-equipment such as bagging machines are may speed manual unloading operations and require the employment of more labor. These should be considered. Pneumatic lifters would replace a substantial portion of the current dockworkers and would likely lead to a more hostile workforce among the remaining workers.

While there is substantial space at the port, much of it is cluttered with abandon/empty containers. These containers should be removed from the working areas of the port and scrap metal and other debris in the working areas of the port should be cleaned up and disposed of through either sale or disposal and some acceptable manner. As much of this cleanup as possible should be done with the available stevedore labor. Funding for this activity needs to be determined, and the sequencing of this work should be controlled by the demands of the port systems development program recommended below.

It is not recommended that extensive investment be made on large dock side equipment purchases until the efficiency of the port begins to be affected by the capital equipment available rather than the inadequate management and operation systems. The purchase of equipment at this time would primarily add to the clutter of the port.

Organizational and management systems

Efficient ports develop systems that minimize the handling of cargo and operate so that goods, and ships, spend a minimal amount of time in port. Such systems in a small port do not need to be heavily automated, but they do need to be well designed. New facilities can quickly be rendered useless by poor management systems or no systems. As mentioned above older facilities serving outdated vessels can still provide an efficient and effective port services in this environment. As process flows and develop their will, time when appropriate equipment needs can be determined. They cannot be determined today.

It should be remembered that efficiency in a capital intensive high labor environment is not the same as efficiency in a capital scarce low-cost labor environment. A system of chaos does not support the operation and maintenance of high cost/high tech equipment. An extensive capital expenditure will not solve the systems issues within the port, and may aggravate existing stress among the port’s workforce as various factions struggle to maintain their economic interest in the port. As argued above existing equipment is substantially appropriate for existing and near-term operations if members of the port work together to use it effectively.

The objective of this approach is to have the most effect in the shortest amount of time. The port is rife with criminal elements that flourished because of the lack of process and procedure. While it would be ideal to eliminate this element from the ports, experience in even the most developed countries indicates that it may only be possible to contain it to a manageable level. Rather than drawing a line in the sand a more pragmatic approach may be needed by all to make Um Qasr a more efficient and economically stimulating asset.

Despite political rhetoric it is likely that the criminal elements in the port are primarily a moneymaking enterprise. With Iraq suffering from the regulatory gridlock at the national level, independent businesses in Iraq often need to operate outside the law. In other streams efforts need to be made to break this regulatory gridlock, however, in the short and medium term it may be necessary to bring the parties together a by recognizing their value in creating a smoothly functioning port. Over time the incentives for all parties may well shift to legitimate economic earnings.

One benefit of developing more consistent processes in the port will be that it will become more apparent how much of a burden extralegal activities are in the trade flow. As the trade flow increases it should be possible to reduce the percentage of earnings paid to extralegal activities.

The flow of goods through the port is determined primarily by the efficiency of the port systems and less directly by the capital equipment involved. Understanding that a port should retain goods for a minimum amount of time and in fact charging importers for items left in the port for more than a few days considerably reduce the demand on port facilities. Properly planned and documented shipments should be able to flow smoothly from the ship to the port gate within a few hours. In Dubai goods may be moved from a ship to an airplane in less than two hours.

A more efficient flow in the port, not only reduces shrinkage, but also will encourage more ships to call on the port. Paradoxically, the more ships that UQP can get to call, the easier it will be to maintain the approach channel integrity. Generally a vessel is not making money when it is in port. Indeed, the massive shift to container ships is based on the fact that a break bulk ship is expected to spend 70% of its time in port while a container ship is expected to be at sea 80% of the time. As a result ships charge high rates, or refuse to call, on inefficient ports impeding the economic development of the country

Ships Captains report that turnarounds in UQP may be more than two to three times as long as those experienced in other ports. The difference is due to inconsistencies in port operations and the lack of consistent operating procedures. Reductions of this burden would have a significant impact on the economic development impact of the port as a whole, and will assist in generating local support for the government's activities. Millions of dollars invested in port equipment without first sorting out the port operating systems would not likely produce any positive impact.

Development of a process development and operational plan will require imbedding a process design team with expertise in port operations. It should be made clear that they are to develop a process for the existing port and not import a process from their home country. Iraq has a trade documentation process that is quite different most other countries.

Final note

The long-term inadequacy of the Umm Qasr port is striking. Eventually, Iraq will need to either make agreements to share port facilities or to develop a deep water port similar to the deep water ports developed for oil exports.

Iraq is ideally located to benefit from a transit trade from the east to the west and perhaps vice versa. Both Iran and Kuwait have only light weight road infrastructure capable of handling only 27 metric ton loads. Iraq's rail structure is a standard gauge and its road structure is designed to support 55 metric tons. In addition, Iraq's rail structure goes from Basra to nearly the Turkish border. Next year Turkey will complete a rail tunnel under the Bosporus, and with connections currently under construction by 2010 a train will be able to run from Shanghai to Rotterdam.(A railroad ferry will be used over the Caspian.) Iraq is ideally positioned to work with Turkey to extend its rail lines to a crossing with the “Silk Railway” so that it may be engaged in a high-volume transit trade. None of this is achievable with Umm Qasr.

There have been previously vetted (Halcow 2004) plans for adding a massive peninsula onto the end of Al Faw to enclose a new grand port. Significant problems exist in both the scale of this project and with difficulties of constructing the project along the border with Iran. A more realistic project might include a study of the new Yangshan port in Shanghai (see photo) where a 32 Km road was built to a small island located adjacent to a deep water channel. In Iraq's case a 12 nautical mile causeway to either a land filled 1 km square island port or a floating port based on oil rig technology may be an appropriate long-term strategy. Container yards and other facilities could be constructed to support the port on the Al Faw Peninsula.

Figure 1 First seven generations of container ships.

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...Lawrence O.W. Lingad OSCA No.: 4635 M5.31 Managing Own Continuing Professional Development __________________________________________________________________________________ 1. Be able to review personal and work-related development experiences, aims, objectives and priorities. 2.1 Evaluate prior learning and work-related experience to identify personal strength and weaknesses in self-development. Humans by nature never stop learning; we undertake learning at different stages of our lives and acquire skills and competences in variety of areas. These learning may have been certified (by an academic or educational body) whilst others are not certified learning through work, social and leisure time activities. Recognising Prior Learning (RPL) is the process at which it recognises previous learning that has taken place in a formal or non-formal setting. Prior learning and work related experiences helps in identifying an individual’s strengths and weaknesses in self-development. Self development entails activities that improve awareness and identity, develop potentials and talents, build human capital that facilitate employability, enhancing quality of life to contribute in the realisation of goals and aspirations. As a student of Leadership and Management Level 5, I am gaining new knowledge that I will apply in my workplace. The advantage of prior learning is it validates the value of my learning and this will enable me to progress unto my profession or further my...

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Access to Credit for Smes: a Study on Chitwan Based Enterprises of Nepal

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