The Public-Private Partnership that’s revamping transport for Jordan

The Aqaba Container Terminal (ACT) is Jordan’s only container port. With a capacity of 1.2 million TEUs (twenty-foot equivalent unit), and 1 km of berthing, capable of servicing ultra-large container ships, it plays a crucial role in the Jordanian economy, enabling growth and development regionally. It is the second busiest facility on the Red Sea.

CEO of ACT, Steven Yoogalingam, explains the importance of the Public-Private Partnership between ACT and APM Terminals, how it contributes to Jordan’s economic growth as well as making Jordan a trade hub in the region.

CEO of ACT, Steven Yoogalingam

Deemed the most successful Public-Private Partnerships (PPP) of its category by the Jordanian government, how can a well-structured partnership between the Aqaba Container Terminal (ACT) and the APM Terminals (APMT) help governments meet their critical challenges?

Following a government report of 2015, Aqaba Container Terminal was deemed a model privatization venture within its category i.e. ventures based on a buy/operate/ transfer (BOT) structure. Such models of PPP maintain the ownership of strategic assets to the kingdom, while capitalizing on the private sector expertise in operations and administrations of such assets. Partnering with global leading port operator APM Terminals has enabled Aqaba to receive best-in-class equipment, IT systems, processes and standard operating procedures which delivered immediate improvement in terms of safety, productivity and efficiency.

Operating a geographically balanced portfolio of 72 terminals and more than 100 dry-ports in the world, APM Terminals gives ACT access to what is probably the widest and deepest pool of port operations best practices in the world. Ultimately, it is the country’s logistics index which moves up the global ranking, making Jordan a more attractive place for investors to develop business.

A recent report from Boston-based Sustainability Excellence consultant, showed the true impact that a PPP like ACT had had over the past 10 years. In terms of employment, we have 1,040 employees but the total contribution to employment is actually 1.4 times this number when we include subcontractors, suppliers and employees’ expenditure. In terms of community development, ACT’s average salary for blue collar workers is about 2.5 times higher than the national average of the private sector and ACT’s gross value added per worker is 4.4 times higher than the national GDP per worker. This has enabled a stronger stable
middle class to develop in Aqaba.

What is the role of the APMT in creating a positive investment climate for Jordan?

The strap-line of APM Terminals is “lifting global trade”. APM Terminals’ successful venture in Jordan is one which we hope will show other local and foreign investors that Jordan is a great country to invest in. We also believe that investors take comfort when knowing that APMT is the operator of ACT, as APMT is a brand with a global reputation of integrity and service excellence and they know they can expect to receive in Jordan the same level of service they receive elsewhere in the world from any other APMT operated terminals. ACT is the strategic gateway giving Jordanian businesses access to global markets. As Professor Yossi Sheffi of MIT and Wolfgang Lehmacher of World Economic Forum indicated during the 15th Trans Middle East Conference which took place in Aqaba a few months ago, the development of integrated transport and logistics infrastructure enable logistics clusters to form in the country.

These so-called logistics clusters give companies located nearby an interesting cost advantage so you will see industrial clusters forming quickly around the logistics clusters. This vibrant business activity creates sustainable jobs which then support consumption, spurring a virtuous feedback loop delivering strong economic growth. Memphis, Chicago, Zaragoza, Rotterdam, Tangiers, Panama Canal Zone are just a few examples. APMT has investments in about 60 different countries and a proven track record for supporting the nations in developing strategic multi-modal integrated transport and logistics infrastructure.

When it comes to the Lloyd’s List Terminal Operator Award, which was received by Aqaba Container Terminal in November 2018, what are the key milestones that lead to this win in your opinion? Can you briefly describe the best-in-class practices deployed by APMT that contribute to its success and efficiency?

We believe that The Terminal Operator Award we received in Dubai from Lloyd’s List for the South Asia, Middle East and Africa region is the result of our long drive on the never ending journey towards excellence. Over the years, ACT has consistently been a nominated finalist for several awards relating to Safety and Security, Environment, Training, and Operations. We also received other awards before such as APMT Global Safety Award in 2015, the “Most Sustainable Port Development Award” from Transport Arabia Excellence, and the Jordan Social Security Workplace Award, to name a few.

Being the first eco-port labelled terminal outside of Europe, certified ISO 14001: 2015 and operating for more than 10 years next to a beautiful coral reef with the national marine research center as our neighbor, are just a few indicators of our commitment to preserving the environment.

What implications does the reopening of the Iraq border have on Jordan as a trade hub?

The reopening of the Iraq – and Syrian – borders is excellent news for the Jordanian export industries. These exports move by road directly into Iraq and Syria instead of through Aqaba. While we will not see these containers at Aqaba anymore, a strong export industry will need more imported input goods and material which come in containers from overseas. A strong export industry will also support employment and thereby local consumption which also translate into higher container volumes. Thus, the reopening of the borders should translate into higher container volumes for Jordan within the months to come if Jordanian exports products are competitive enough to regain the market share they used to enjoy before the closing of the borders.

If a modern integrated multi-modal transport infrastructure had been developed while the borders were closed, the industries of Jordan would be today in a stronger position to recapture its export business and become a trading hub for the Levant. As to becoming a logistics hub for the Levant, Aqaba should be able to act again as a competitive alternative container gateway for Iraq as soon as the containers will be able to cross the border without the complex, expensive and time-consuming cross-stuffing operations still required today. Aqaba will be competitive when the container movement will not be impeded at the border.