Qatar inaugurates $7.4 billion port; hopes to circumvent sanctions

Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani inaugurated the Hamad Port in Umm Al Houl as part of a wider plan to increase non-petroleum exports. The port, located 40km south of Doha, is the largest of its kind in the Middle East and has the capacity to handle all types of vessels, including large containerships.

The $7.4 billion port will have an annual capacity of 7.5 million shipping containers, and will have separate terminals dedicated to general cargo, cereals, vehicles and livestock.

The port will also help the country circumvent the sanctions imposed by the UAE and other Arab states on Qatar. It will help Qatar directly import goods from China and Oman instead of transhipping them via Dubai.

Large container ships will now go directly to Qatar rather than docking in the United Arab Emirates, where cargo used to be transferred to smaller vessels. The UAE is one of the countries that have imposed a land, air and sea blockade on Qatar.

“The port… will break the shackles of any restrictions imposed on our economy. We are not giving up on our hopes and ambitions,” Qatari Transport Minister Jassim bin Saif al-Sulaiti told Reuters.

After Saudi Arabia, Egypt, Bahrain and the United Arab Emirates (UAE) severed ties with Qatar in June, the port has been receiving large quantities of food and building materials for construction projects including stadiums for the 2022 soccer World Cup.

The isolation of Qatar over Doha’s alleged support for militants had raised concerns that projects could be delayed if supplies from the Far East and South Asia are choked. According to the transport minister, the port construction was completed ahead of schedule and below budget.

Officials said Hamad port would allow Qatar to get around the sanctions by importing goods directly from countries such as China and Oman instead of through a major re-export hub in Dubai.

Closure of the Saudi border with Qatar and disruption to shipping routes via the UAE slashed Qatar’s imports by over a third from year-earlier levels in June and July. Institutions in Saudi Arabia, the UAE and Bahrain have begun pulling money out of Qatari banks, threatening their balance sheets.

In addition, in June this year, Qatar launched a new direct line connecting the Port of Hamad with Omani counterpart, the Port of Sohar, enabling the country to bypass the Gulf neighbours.

The new routes will connect Qatar’s ports to Sohar and Salalah ports in Oman, Shuwaikh Port in Kuwait, Karachi port in Pakistan, Izmir port in Turkey as well as Mundra and Nhava Sheva ports in India, according to Qatar News Agency.

Qatar has expanded shipping routes to India, Oman, Turkey and Pakistan and announced plans to raise its liquefied natural gas (LNG) output by 30 percent in an apparent effort to prepare for greater economic independence in the long term.

The port is scheduled to become fully operational by 2020 when it will cover around 26 sq km. The existing Doha port will then be transformed into an international cruise ship terminal.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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