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Africa's ports vital for world trade Published Date : 2015-03-16 10:11:38Author : admin

Africa covers about 6% of the Earth’s total surface. With 38 of its 54 countries either coastal or insular in nature, Africa has over a hundred port facilities – a few of which handle 6% of the worldwide water-borne cargo traffic and about 3% of the world’s container traffic. International trade is very important for many African economies.

With over 90% of Africa’s imports and exports conducted by sea, there is an increasing need for innovation and development in the field of maritime. African Union’s 2050 Africa’s Integrated Maritime Strategy is aimed improving these conditions and increasing the potential for wealth creation.

A research conducted by Jovago.com reveals the seven harbours/ports in Africa worthy of note as they stand out strategically across the region:

 

* Durban, South Africa – Port of Durban as it is popularly known is Africa’s most active general cargo port. It is situated a block away from Durban’s central business district and plays a key role in South Africa’s economy. Being Africa’s largest container port, it handles most of the seagoing traffic in comparison to the other ports in South Africa. This port welcomes about 4 500 vessels yearly and about 83 000 containers per month, it conducts trade worth over $45-billion. According to the Port Management Association of Eastern and Southern Africa, it handled about 44,8-million tonnes of cargo of cargo in 2013-2014. Not only does this port contribute to the economy, it also creates employment for South African locals.

 

* Mombasa, Kenya – Port Mombasa, often referred to as “the city of merchants” is also worthy of note. Dating back to the times of Portuguese exploration, it has been and remains a busy trading post for the region which could be attributed to its strategic location between South Africa and the Gulf of Aden. It is a key gateway to East and Central Africa. It provides a direct link to about 80 ports worldwide and a railway line runs therefrom to Uganda and Tanzania. With 18 000 twenty-foot equivalent unit (TEU) and a container capacity of about 250 000 TEU per year, Mombasa Port now handles about double this volume.

 

* Djibouti – Djibouti’s ports are crucial to its geo-strategic importance both in military and economic terms. They serve as a passage for Ethiopian trade and a platform for the transhipment of goods. This involves the outflow of container and bulk cargo from larger vessels to be redistributed to East Africa and Arabian ports. It provides a secure regional hub for transhipment

and relay of goods. China is also directly involved in the Port of Djibouti through the state-owned China Merchants Group. Their interest in Djibouti goes beyond the benefits of being involved in East African regional trade rather Djibouti’s position as the only reliable port along the main shipping lanes between Europe and the Gulf and also between Asia and the eastern coast of Africa is essential.

 

* Lagos, Nigeria – being Nigeria’s economic focal point, Lagos generates a significant portion of the country’s GDP. Port of Lagos, also known as Lagos Port Complex is located at the Apapa area of Lagos, South West Nigeria. With a total land area of over 120hec, the geographical location is within UTM Zone 31. Its operational area consists of berthing, cargo-handling and stacking areas and storage facilities. This leading port is one of the largest and busiest in Africa.

 

* Abidjan, Ivory Coast – the port of Abidjan is located on a lagoon and is connected to the sea by a 2,8km long channel. The Abidjan Container Terminal is run jointly by the French Bolloré Africa Logistics and APM Terminals. Ivory Coast’s economic capital Abidjan boasts of the biggest port in the West African sub-region, which is also the second biggest in Africa with the container storage capacity of 20 000 TEUs and an annual volume of 610 000 TEUs. The container trans-shipment port was opened in 1951 and its 15m deep Vridi Canal allows boats with large draughts to dock in the deep-water port and this gives Abidjan an edge as it has become even more important, receiving the bulk of the country’s industrial activity.

 

* Suez Canal, Egypt – the Suez Canal is 101 miles (163 km) long connecting the Mediterranean Sea with the Gulf of Suez, a northern branch of the Red. Since its inception in 1869, it has allowed ships to travel between Europe and South Asia without navigating around Africa hence reducing the sea voyage distance between Europe and India significantly. The Suez Canal Axis Development Project aimed at its expansion and development is currently in planning. The 2014 canal revenue was approximately $5,45 billion which was 6,8% higher than the previous year. The 2014 total tonnage was up to 962,7-million tonnes.

 

* Tangier, Morocco – separated from The Port of Tangier which remains the port for ferries, the Tangier-Med Port, accommodates commercial ships and vessels and can facilitate up to 3,5-million containers. This was triggered by the expansion of the market and import-export industry, requiring the need to streamline the flow of traffic. It is one of the largest ports on the Mediterranean and in Africa in terms of capacity and went into service in July 2007. Being relatively new as it was opened in 2007, there are high expectations for this port.

Addressing the global shortage of seafarers Published Date : 2015-03-11 08:15:54Author : admin

There is, said the president of the UK Chamber of Shipping the other day, “a global shortage of seafarers”. There is nothing very unusual in such an observation; the shipping industry has been swinging from feast to famine for centuries. It was the raison d’etre for the press gang and the crimps who used to haunt the waterfronts in the days of sail.

Today we have expeditions from crewing agencies, fanning out across the world searching for people, preferably so disadvantaged on land that seafaring at the going pay scales is sufficient to persuade them afloat.

That is a cynical view, of course. Modern seafaring offers prospects for rapid advancement, a reasonable package of rewards and for officers, a great deal or responsibility at a young age. This is true, if one is careful about the choice of employer. But if this was universally recognised, there surely wouldn’t be the reluctance to sign on that is so apparent around the world. But seafaring is regarded by 21st century people as fundamentally antisocial, with first trippers experiencing mental breakdowns when they discover – too late – that none of their electronic devices work, once the land sinks over the horizon. They might be bribed with money for a while, but they will not stay around any longer than it takes to save up for that shop, farm or restaurant.

It is not helped by the attitude ashore which regards seafarers as a blooming nuisance and any advance that enables a smaller crew to be employed as one well worth buying. The desperate cost saving efforts, which throws a handful of people from half a dozen different languages and cultures together, expecting them to meld together into a socially cohesive unit, driven wholly by the monthly wage bill, is not a policy designed to promote manpower retention, let alone happiness. An industry which has never managed to wean itself away from casual labour and the sub-contracting of employment is never going to be one that can look with pride at its manpower policies.

There are, of course, some companies that do it right. They may be owners or managers, who believe in the long term and don’t make sarcastic noises about heart surgeons being trained in a shorter period than it takes to produce a master or chief engineer. But in a seafaring manpower world surrounded by poachers who address their short term needs in their traditional fashion, it is hard to justify the cadet training programme, the ongoing career development and the talent spotting, which recognises the value of the home-grown.

There are thus few alternatives open to a shipping company looking to the future. They could put all the money into sophisticated data handling, communication and monitoring equipment, in order to operate ships under ever-closer shore-side surveillance and not worry too much about the quality, let alone the job satisfaction of the cheap people hired to make up the necessary numbers afloat.

Or they could opt for the hard road, doing what it takes to recruit, train and retain people who return the loyalty given to them, who take pride in their professionalism and being part of an elite. It will cost more, the customers may not respond with any higher rewards for such excellence, but one might think that eventually quality will produce its own reward when enough people see the difference.

The other rather depressing alternative, other than merely muddling through, is to embrace the unmanned ship concept enthusiastically proposed by technology giant Rolls-Royce. The robots, it tells us, are coming, although, one suspects, not without some glitches on the way. The sad fate of the South Korean woman, who lay down on her carpet and subsequently had to be rescued by paramedics, after her hair had been ingested by her robot vacuum cleaner, seems to offer a warning to us all.

When can Maritime Fraud occur? Published Date : 2015-03-02 08:10:33Author : admin

A brief inquiry into some of the factors facilitating the commission of fraud in the maritime industry is essential to help businesses guard against colossal losses.

Maritime fraud occurs not only as result of the gullibility of its victims, but also as result of the interaction of a great deal of independent factors stretching across political, social and economic boundaries:

Frauds are based on game situations, intriguing challenges, in which criminals seek to compromise the security controls of a system…but frauds will not succeed unless the system is flawed and bears the seeds of its own subversion. Conditions must be conducive, and they may even be seductive.

It is important to note that maritime fraud, and in fact, frauds of any description cannot be seen in isolation. A key question to ask is: what motivates the defrauder? This is not intended to be an enquiry into criminology, but valuable lessons can be learned from the answer.

In addition to the professional, there is the orchestrator of fraud who, as result of their peculiar circumstances, is overwhelmingly drawn towards the option of maritime fraud. Incidents of fraud within this category surface more readily in a worsening economic climate.

Economic recession also creates the perfect environment for the professional defrauder, as increasing numbers of vessels are laid up, resulting in an inexpensive vehicle for fraud. As times toughen, standards fall inevitably, and insurers and ship-owners ask fewer questions.

Apart from the obvious factor of economic recession conditions, there will at any given time exist a number of factors facilitating one type of fraud or another. This may include wars and

civil disturbances, which are ideal situations to exploit. Countries in the grip of strife still require commodities, yet as result of this disturbance, reputable shipping lines will attempt to steer clear of these troubled areas.

The most obvious case in point is undoubtedly that of Beirut, where a number of unofficial ports have in the past undermined the law of the land, creating perfect havens for the discharge of stolen cargoes.

Perhaps the most important factor worthy of consideration is the vast changes in the shipping industry during recent decades, which include:

–       freer availability of credit for purchase of ships

–       introduction of specialized, capital intensive ships

–       faster turn-around times

–       the changing roles of the shipowner and ship operator

–       multimodal transport operator

–       instantaneous communications

–       simplification of documentation and

–       widespread use of computers

Whereas the industry has for many years been based on a slow evolution of customs and commercial practice, the comparatively quick changes in the last few decades have caused a number of anomalies. These include such factors as the inability of law to keep up, and paperwork lagging behind transactions, in turn creating a perfect environment for the fraudulent minded opportunist.

 

The letter of credit system bears witness to a system based on trust, the checkpoints ensuring merely that the paperwork has been prepared correctly rather than checking on the truthfulness thereof.

A very important key is a high demand for certain resources or specific articles, the higher the demand, the greater the danger that the articles will be the subject of crime.

Once factors exist conducive to the commission of the fraudulent act, the game can commence, but the actors in the plot have to play their parts in order to facilitate a successful fraud. There is something inherent about the act of fraud, which requires the victim to make an omission or act in accordance with the misrepresentations made by the defrauder.

In some cases the belief by the victim that the proposed scheme has elements of illegality or is not quite legal, may actually have the effect of swaying the latter’s mind to participate in the

scheme. It is the “something for nothing” syndrome, which is present in all of us to a greater or lesser degree.

More often than not, the victim is so dazzled by clever words of persuasion that all caution is thrown to the wind. In many cases, it is the underwriter who may potentially suffer as result of this folly. An obvious example is that of a claim on the hull and/or cargo, for an allegedly lost vessel under the headings of `perils of the seas’ or `barratry’.

Many different variations of the basic scenario of a scuttled vessel exist, including that of selling the cargo many times, notwithstanding the fact that neither the cargo nor the vessel existed in the first place.

There can be no doubt that maritime crime is big business indeed. One of the biggest problems most certainly, is that of detection. In practice, investigation will not occur before a claim is brought, and then only if the claim is large enough to warrant the costs of an insurance investigation. Petty fraud succeeds at this stage, and short delivery of goods is a common occurrence.

When investigations are initiated, the investigator is faced with few available facts in order to prove the commission of fraud. Investigators and marine claim managers are accordingly necessitated to conduct their investigations in accordance with a sixth sense.

Although insurers do cooperate in liaison with bodies such as the International Maritime Bureau (IMB), as well as surveyors and average adjusters, no satisfactory system of coordinating facts has been found as yet. In this respect, a primary obstacle has been the lack of the manpower to administrate a system of full co-operation and disclosure.

There is a definite need for better liaison between all concerned in the marine underwriting industry. As matters stand currently, it is quite possible for insurers to pay out, independent of each other, on suspicious claims without the sharing of knowledge that the insured concerned had submitted fraudulent claims in the past.

On the other hand, insurers may find it more convenient to pay out on suspected fraudulent claims, especially when taking into consideration the potential complexities facing the cargo surveyor. It is often suggested that insurers pay out far too easily on suspicious claims.

Ships particularly at risk of being used in fraudulent schemes include vessels which are twelve years old or more, smaller than 10,000 tons and flying a flag of convenience.

Very often the same parties seem to be involved. Findings indicate that in some seventy cases of known suspicious sinkings, thirty-one vessels have sunk under the agency of five companies, four companies having been involved in six other vessels which sank.

Maritime fraud is a phenomenon occurring within a complex framework, depending on a vast number of factors. It is something which may be difficult to detect before it is too late, but a measure of neurosis on the topic will certainly do no harm in an attempt to prevent the occurrence of this phenomenon.

How to avoid getting sick on cruise ship Published Date : 2015-02-23 10:18:30Author : admin

Recent instances of gastrointestinal illnesses at sea have been making headlines and leaving some travellers wary of setting sail. But thankfully, you’re not as likely to contract norovirus — marked by symptoms like vomiting, nausea, diarrhea and stomach pain — as you may think. According to the Cruise Lines International Association, seven norovirus outbreaks on cruise ships were reported in 2013. These cases affected only 1,238 of 21.3 million total passengers who sailed on CLIA-affiliated ships last year. And if an outbreak does occur, cruise ship crew members are required to report all cases to the Centers for Disease Control and Prevention before entering a port. Furthermore, United States’ CDC-mandated Outbreak Prevention and Response Plans enforce each crew member’s role in thwarting the spread of norovirus via contaminated surfaces, tainted food and water, or infected passengers.

 

Of course, illness on cruise ships can’t be fully prevented, but a few extra safety measures can make a big difference. Assistant Deputy Chief of the CDC’s Vessel Sanitation Program, Cmdr. Aimee Treffiletti speaks on what cruise lines and passengers can do to ensure healthy travel at sea.

 

How ships prevent and control outbreaks

The CDC conducts twice-yearly sanitation inspections of cruise ships operating under the Vessel Sanitation Program’s jurisdiction to determine their compliance with a long list of health and safety measures. Inspectors check nearly every inch of a ship, including all common areas, dining rooms, swimming pools and medical facilities, and score each ship on a 100-point scale. To score above the required 85 points — and to decrease the likelihood that passengers end up with the stomach flu — crews take the following measures:

 

 

Clean surfaces

It may seem obvious, but thorough cleaning can make a huge difference when it comes to transmitting viruses. And that’s not just on surfaces in kitchens and bathrooms where norovirus tends to be most prevalent. “If they have a casino on board, a casino manager might be in charge of frequently sanitizing things like the casino chips, and changing the playing cards and

sanitizing the slot machines,” Treffiletti said. Areas where people have been sick are meticulously cleaned with sanitizer or disinfectant that is effective against norovirus, she added.

 

Careful food preparation

Cruise ships are required to comply with the CDC’s rules for safe food preparation. CDC inspectors evaluate everything from food sourcing to storage methods and cooking temperatures. Ships are also required to clean equipment and dishes in hot water with specific disinfectants. Items like meats, eggs and seafood have heating, cooling and serving requirements designed to eliminate or significantly reduce the likelihood of transmitting foodborne illness. If you do order raw or undercooked meat, crew members are obligated to warn you of the risks.

 

 

 

 

Pre-boarding prevention

Often, a norovirus outbreak comes down to someone who knowingly or unknowingly brings a contagious virus on the ship. That’s why one key to prevention can be ensuring that everyone on board is healthy from the get-go. Many ships have medical professionals on hand to screen passengers for signs of illness as they board, while other ships require that passengers fill out a form inquiring about vomiting or diarrhea in the 72 hours prior to sailing. If you get sick on board, you may be quarantined to your room to reduce the likelihood of spreading the virus to others. In some cases, guests may be asked to disembark due to illness; know your rights by reviewing your cruise ticket contract before you board.

 

File reports and notify passengers

Cruise ships must keep track of instances when passengers or crew members report multiple symptoms of the stomach flu. The ship must notify the CDC when 2 percent of the passengers on board have symptoms. Once 3 percent of people on board (on cruise ships carrying 100 or more passengers) have signs of illness, the CDC classifies the case as an outbreak. At that point, the CDC conducts an investigation to determine the cause of the pattern and to help prevent the virus from spreading further. “We go on board, we look through [THE SHIP’S]records … and we also watch their sanitation barrier to ensure that they’re following their plan — [WE’RE]just another set of eyes to watch,” Treffiletti said of the CDC’s role during an outbreak.

 

 

 

How passengers can avoid illness

Although the crew members work hard at prevention, their methods simply can’t account for every germ. Passengers can take their health and safety into their own hands with a few key recommendations from the CDC:

 

 

Wash your hands

Proper hygiene can go a long way when it comes to protecting yourself from norovirus. “The No. 1 way to prevent the spread of a transmissible illness like norovirus is with proper and frequent hand-washing,” Treffiletti emphasized. It is especially important to wash your hands before touching your mouth, after touching communal surfaces like railings or bathroom doors, and after contact with people who are sick.

 

Rest and hydrate

 

A healthy immune system is one of your best defenses against contracting viruses on board. A good amount of sleep will help your body repair and rejuvenate, so try to catch plenty of shut-eye before and during your trip. It’s also important to stay hydrated: You’ll flush any potential pathogens out of your system and prevent worsening symptoms due to dehydration. “You’re out of your routine and maybe not drinking as much water as possible, but that’s always really important,” Treffiletti said.

 

 

Do your research

The CDC’s Vessel Sanitation Program collects records of cruise ship norovirus outbreaks, and publishes all reports and inspection results on its website. Use the CDC’s search tool to find the health records and history of any ship before you book a cruise. You can discover which ships score highest in cleanliness and which ships have had virus outbreaks in the past. Use ships’ average CDC health ratings to calculate the Best Cruises rankings; the scores are displayed on each ship’s profile. Before you choose an itinerary, consider this: You’re no more likely to contract norovirus by traveling to one particular port versus another. However, Treffiletti notes

that norovirus is more often found on cruises that leave during the winter months (coinciding with a seasonal increase in norovirus on U.S. shores).

 

Be cautious at the buffet

Cruises have a reputation for dishing out copious amounts of food, often served buffet style. But sometimes food can grow tepid if it’s sitting out for too long. One trick to staying healthy at the buffet is to make sure you steer clear of anything lukewarm — especially food items you would expect to be piping hot or very cold. Also, let crew members know if you spot someone failing to use proper utensils or otherwise contaminating the food.

Overall, the best way to stay healthy at sea is to follow the best practices for staying healthy ashore. Gastrointestinal illness is no more common on cruises than on land, Treffiletti said. “Anytime where you have a large group of people together in a lot of shared spaces … you tend to see an increase in illnesses like norovirus,” he said.

Greek government unlikely to target shipping industry Published Date : 2015-02-16 08:22:29Author : admin

While Greece’s new leftist government seems set on a collision course with the European Union, it is likely to steer clear of confronting the country’s critical shipping industry.

 

The Syriza party of Prime Minister Alexis Tsipras, which swept to power last Sunday, once promised to take on shipowners and their generous tax allowances. But in recent months, it went quiet on tackling an industry which, along with tourism, is one of the few in which Greece remains globally competitive.

Since forming a coalition, Syriza has confronted fellow EU governments with radical plans to renegotiate Greece’s debts, overturn austerity policies and cancel privatisations. Its stand on shipowners, by contrast, has been decidedly conciliatory.

“We are here to solve problems, not to create new ones,” said Economy Minister George Stathakis, who oversees the shipping portfolio. “There will be dialogue, discussion, and we will look for the best possible solution,” Stathakis, an economist who comes from a shipping family, said during a handover ceremony at the shipping ministry.

This attitude may reflect realities of the industry. While Greek shipping magnates generally operate from the Athens suburbs or the port of Piraeus, their companies are largely registered in the likes of the Marshall Islands and the Turks & Caicos. The firms are often listed on stock exchanges abroad and their ships often fly foreign flags such as Liberia’s.

Any attempt to impose heavy taxes after decades of virtual fiscal freedom could provoke an exodus of oligarchs and businesses which are major employers, further damaging an economy that has endured years of crisis.

Symeon Pariaros, chief administrative officer with Athens-run and New York-listed shipping firm Euroseas, said he doubted the government would rapidly make major changes affecting shipping.

“My feeling is we will not see anything dramatic in the next months,” he told Reuters, citing meetings between Syriza and the Union of Greek Shipowners. “I don’t feel even this leftist radical government would dare to put at risk such an important industry in our country.”

Greeks operate some of the world’s biggest tankers and bulk carriers. According to former finance minister Gikas Hardouvelis, they account for 43 percent of the European fleet and 15 percent of the global total.

While the government badly needs more revenue and a lower debt burden, it may resist the temptation to milk the cash cow.

“In my discussions with people in high places, in business and politics, they assured me that the government has other interests to tackle such as debt forgiveness,” said John Faraclas, a London-based shipping commentator and independent ship broker.

“The people who will lose if the government attacks Greek shipping in its entirety will be the seafarers and the people who work in the offices,” said Faraclas, who was an aide to a former Greek shipping minister. “No Greek government will do this. There are offshore investments too, employing a great number of people all over the country.”

The Union of Greek Shipowners did not respond to requests for comment. The new government is expected to outline its plans during a vote of confidence early in February.

 

Greek shipping has been part of the national economic lifeblood for thousands of years. More recently, some of its tycoons became international celebrities such as Aristotle Onassis, who married the widow of assassinated U.S. President John Kennedy.

Today the industry accounts for about 7 percent of national GDP. Many Greeks work in other areas connected to the sector such as insurance and finance.

While the tycoons benefit from the liberal tax regime, their commercial attachment to the country may not be taken for granted. “Greek shipowners have to be very competitive in the global scene. If the situation in Greece becomes uncompetitive, they can relocate along with their

key employees,” said Alexandros Argyros of Axia Ventures Group, an independent investment banking boutique focused on shipping and Greece.

“They are not bound by their assets which are floating around the world and that makes it a lot easier than for any other businessman,” he said.

While Stathakis is considered a more pragmatic voice within Syriza, a government official said the finance ministry rather than the shipping ministry would deal with any tax issues.

“Shipowners are protected by the constitution – which means that if they were to be further burdened, a constitutional revision would be required,” the official said. However, the official added: “Shipowners would be very welcome to contribute, depending on their potential, and help boost the economy.”

After announcing a halt to the privatisation of the port of Piraeus on Tuesday, for which China’s Cosco shipping group and four others had been short-listed, the government indicated it would put the whole programme on hold.

But shipowners were not too concerned, with one describing this as “a populist move that is so far neutral for shipping”.

Nevertheless, Greek shipping sources say many companies have contingency plans to relocate to jurisdictions such as Monaco or London. “If they come in too aggressively, the threat of a flight from Greece is real,” one shipowner said.

While shipping has experienced one of its worst downturns, the owner acknowledged the scale of Syriza’s victory. “There is room for additional contributions by shipping to public finances. It has to be a measured contribution that takes into account that it is a global business,” he said. “If they do it in a measured way, people will pay.”

The tail wagging the dog Published Date : 2015-02-02 07:58:26Author : admin

Naval architects are contemplating vessels that can take in excess of 20,000 teu, but the bigger US ports – which have ‘modernised’ – are struggling to handle multiple calls of 12,000 teu vessels that were state of the art only a few years ago.

Carriers continue to soak up ever-larger vessels because of lower per unit costs, however modernising ports is not modular; it requires a long term view. Dredging for deep vessels is only part of the solution and the landside issues, including intractability of labor – which hit the point of raw nerves this past year on the US West Coast – are far more vexing.

A JOC conference, held late last year, exposed some of these nerves. It was suggested by multiple speakers that, even at the biggest ports (which exceed the throughput of New York), terminal layouts and equipment configurations simply couldn’t support what the carriers have in mind.

New York (and perhaps other East Coast rivals) is about a year away from facing down such issues, but the experience of the West Coast – chassis shortages and labor intransigence galore – should be sobering to port planners on all US coasts. Certainly, marketers at the ports may need to speak up more. If infrastructure forms legitimate constraints then value-add aimed at certain cargo categories may be a way forward. Engineering constraints, of the type identified at the JOC event, need not be deal-breakers. Rather, they may inform a strategy of optimising the cargoes that can move through a port.

Economic forecasts for the US are not great, but they are at least decent. The stronger dollar will likely bring about increased imports, meaning that the time for such experimentation is now.

All else being equal, lower fuel prices will reduce the advantage of bigger modern ships. Maybe, a movement away from the bleeding edge, moving to port calls of smaller 8,000 teu-10,000 teu vessels is not such a bad thing.

Ports don’t always have a say in the plans of carriers, but shippers of toys and clothing who are tired of delays and congestion do and the marketplace will route its shipments accordingly.

Trade balance of developing and developed countries continues to converge, UNCTAD statistics show Published Date : 2014-12-22 12:26:03Author : admin

Developing economies ran a combined merchandise and services trade surplus for 2013 of $177.6 billion, the UNCTAD Handbook of Statistics 2014 reveals, representing a fall of 40 per cent as measured in current prices compared with 2012 and 63 per cent compared with the peak in 2007. Transition economies also ran a trade surplus in 2013 of $128.6 billion. This represented a fall compared with the previous year (21 per cent) and with the peak in 2011 (33 per cent). Developed economies ran a trade deficit of $65.3 billion in 2013, down from almost $400 billion the previous year; a reduction of 84 per cent (current prices).

This overall convergence is being driven by a convergence in merchandise trade. However, trade balances for services of developing and developed countries continue to diverge. As trade in services is becoming more important, it suggests that the overall convergence may not continue indefinitely.

Trade balances varied significantly at the regional level. The overall trade surplus for developing countries was driven by Asia, which operated a surplus of $403.8 billion in 2013. In contrast, developing countries in Africa and the Americas ran aggregate trade deficits of $100.4 billion and $114.8 billion, respectively. Developed countries in Europe ran an overall trade surplus of $630 billion, whereas developed countries in the Americas and Asia ran deficits of $566.4 billion and $130.1 billion, respectively.

The direction of trade balances also varied markedly between merchandise and services trade. In 2013 there was a continuation of patterns seen in previous years in which developing and transition countries ran a trade surplus for merchandise trade ($451.9 billion and $187.2 billion, respectively), while developed countries ran a deficit of $619.2 billion. For trade in services, the opposite was true: developing and transition countries ran trade deficits ($274.3 billion and $58.6 billion, respectively), while developed countries operated a surplus of $553.9 billion. Separating merchandise and trade in services also illustrates that the convergence in overall trade balances between developing and developed countries evident in recent years is being driven by merchandise trade. The opposite is true for services, where the trade imbalance continues to grow.

 

The UNCTAD Handbook of Statistics 2014 also shows that total world exports in 2013 were valued at $23.6 trillion (up almost 3 per cent from 2012), of which merchandise trade accounted for 80 per cent ($18.8 trillion).

Along with providing detailed statistics on international merchandise and services trade, the 2014 edition also provides investment, commodity prices, maritime transport and other economic and social data, for all individual economies for which data are available. In addition, it includes figures for geographical regions, various economic groupings and world totals. The Handbook aims each year to provide data for the analysis and evaluation of world trade, investment, international financial flows and development. To the extent possible, UNCTAD provides estimates to fill in data gaps in order to furnish the most complete data sets.

The Handbook is available in printed form and on DVD. In addition, the data underlying the findings of the Handbook are available online at UNCTADStat, a continuously updated statistical database.

Ebola Turns Up the Heat on West Africa Trade Published Date : 2014-12-15 08:37:37Author : admin

West Africa trade continues to acutely feel the pressure of the Ebola outbreak with export trade estimated to be down by as much as 30% since the start of the outbreak, UK’s shipping consultant Drewry said in its weekly container insight.

Capacity dipped 4.9% dip to 207,000 teu in October, albeit this is still up 31,000 teu since the start of the year. Meanwhile, utilisation on the Asia-West Africa fronthaul leg in September dropped 3 percent points month-on-month dragging freight rates down with it.

The estimated average all-in rate charged by forwarders for spot cargo from Asia to West Africa (Lagos) decreased 2% from USD 3,596/40ft in September to USD 3,541/40ft in October.

“While the Ebola outbreak is having an impact on current trade, carriers remain committed to long term development in West Africa, placing their faith in containment of the disease followed by a rapid re-establishment of double digit growth in traffic,” Drewry said.

The economic impact of this decline is anticipated to be significant, with the International Monetary Fund (IMF) reducing its growth projections for the region from 5.5% to 5%.

The World Bank also voiced its concerns and has similarly revised its growth estimates for Guinea, Liberia and Sierra Leone.

The decline puts the cost of the outbreak to the West African economy at USD 32 billion in 2015, if the disease is not successfully contained. Already, estimates show that the Liberian economy has declined by USD 113 million as a result of the outbreak; Sierra Leone by USD 95m; and Guinea by USD 120m.

Container traffic volumes illustrate the concerns with fronthaul volumes down 4,000 teu in September which, while up 5.4% year-on-year, fall short of the trade’s expected growth potential.

Southbound traffic continues to show an upward trend and year-on-year percentage changes that remain in excess of 5% despite the current crisis and this trend is what  keeps carriers resolutely committed to the region, Drewry explains.

Drewry cited MSC’s move to a hub and spoke set up in West Africa as proof of the longer term view carriers are taking of the Asia-West Africa trade.

“Just six months after its launch, MSC is revising its Africa Express service on the back of the planned development of a 2 million teu capacity terminal in Togo’s Lomé Container Terminal, being developed by subsidiary Terminal Investment Limited (TIL) and China Merchant Holdings International.

Commissioned in October, the terminal is expected to be fully completed by 2017. MSC is dropping its current West Africa calls in favour of one call at Lomé and utilising ten feeders to connect to Abidjan, Cotonou, Douala, Freetown, Lagos (TinCan), Libreville, Monrovia, Takoradi and Tema,” Drewry said.

In making the move, MSC will move up from the 4,100 teu ships currently used on the service to ten 6,000 teu ships from mid-November. The removal of the other West Africa ports will allow MSC to reduce the rotation from 11 to 10 weeks.

Maersk and CMA CGM still dominate the Asia-West Africa trade – accounting for over half of the available capacity – but MSC’s Lomé ambitions could challenge that position somewhat by 2017.

Lomé is proving a popular choice for a West African hub; Bolloré?operated Togo Terminal’s 300,000 teu capacity is being expanded to 1.2m teu. Elsewhere, planned investments in existing ports in Abidjan, Tema and Pointe Noire and in the greenfield ports of CMA CGM’s Lekki and APM Terminal’s Badagry in Nigeria will further boost handling capabilities in West Africa.

Within 24 months ships of up to 9,000 teu could be a reality in this trade, Drewry estimates, adding that this move could be likened to the rapid growth in containership sizes serving the East Coast of South America since the start of the decade.

“Already a fifth of all containerships serving the Asia-West Africa trade are gearless, highlighting the evolution in shore-side handling facilities,” the weekly insight concludes.

Source: Drewry

Are Captains who abandon ships breaking the law? Published Date : 2014-12-08 07:52:30Author : admin

The captain of the South Korean ferry that sank with hundreds of high school students aboard is under criminal investigation for his actions, but it’s not clear whether he broke any laws by being one of the first people off the crippled boat.

While the “captain goes down with his ship” is considered a law of the sea, it’s really more just a guideline, experts say.

Lee Joon-seok, 69, climbed onto one of the first lifeboats to launch from the ship just a half an hour after reporting an accident.

“I am really sorry and deeply ashamed,” Joon-seok said during his trial as he was being questioned at the Mokpo Coast Guard Office.

It is not the first time that authorities have focused on a captain’s abandonment during an investigation.  In 2012, when the Costa Concordia cruise ship sunk off the coast of Italy, Captain

Francesco Schettino was brought up on criminal charges for abandoning the ship ahead of his passengers.

But is it against the law for captains to leave the boat while it goes under? It depends.

There is no international maritime law that requires a captain to stay on a sinking ship, but many countries either have their own laws or subscribe to international treaties that mandate certain behavior.

South Korea, for instance, is a member of the International Maritime Organisation, which has its own rules for captains outlined in the International Convention for the Safety of Life at Sea. The convention doesn’t mandate that the captain stay on board, but its rules suggest a captain is always responsible for the people on board.

“There is nothing in any IMO Convention to specifically require a captain to stay on board the vessel in the event of an incident such as this, however he/she does retain full responsibility for the safety of the vessel and those on board,” IMO spokesman Lee Adamson said.

A mariner, Kenneth Pucket said, “The Captain of a ship involved in a maritime accident is the ‘On scene Commander’ and by International Law must remain on board the stricken vessel in the vicinity of the accident to provide communications and coordinate rescue efforts until properly relieved by proper authority.

“The Captain of the Costa Concordia and the [South] Korean ferry basically left the scene of the accident and therefore violate international laws of the sea.”

There are also guidelines presented in the Merchant Marine Officer’s Handbook which say the captain should be the last person to leave the vessel, but the guidelines are just that, guidelines, not law.

If South Korea does not have its own laws that dictate a captain must stay on the ship, Joon-seok may not be charged criminally for leaving the vessel while his passengers were struggling to escape.

In all, the tradition of a captain going down with the ship may be more about personal choice and lore of the sea than legal responsibility.

World's first oil well still bubbling crude oil Published Date : 2014-12-01 07:28:47Author : admin

The smell of money hangs thick in the air as black crude oil bubbles up from what is billed as the world’s oldest oil well, but this is not Texas or Saudi Arabia.

The sleepy village of Bobrka in southern Poland lays claim to the planet’s first oil well and rig, one that is still pumping up enough black gold to be profitable.

It was dug and built by hand in 1860 under the watchful gaze of Polish pharmacist and inventor Ignacy Lukasiewicz, a humble man who pioneered the now ubiquitous use of petroleum by creating the kerosene lamp.

Thanks to him, “Bobrka became the birthplace of the world’s oil industry”, says Barbara Olejarz, who runs a local museum devoted to the origins of the sector and whose last name by coincidence means “oilman” in Polish.

“It all began there,” she tells AFP while pointing a finger at an obelisk built by Lukasiewicz and his circle to mark the launch of the oil field in 1854 and the founding of the world’s first oil company.

Despite giving birth to the sector, it turned out that Poland did not have much oil.

It now produces around 20,000 barrels a day, or 7.3 million per year, worth some $584 million (466 million euros) at current prices — a trickle by global standards. Refined locally, Polish crude covers just four to five percent of domestic demand, according to oil and gas expert Andrzej Szczesniak.

The five remaining wells at the Bobkra museum pump out a combined 423 barrels of crude per year, which is also locally refined and consumed.

And though he pioneered the oil industry, few outside the country know about Lukasiewicz, due in part to his own humility.

A figure of Ignacy Lukasiewicz in his laboratory in the Ignacy Lukasiewicz Museum of Petroleum Industry

“His modesty worked against him. He remained less known than other Polish scientists: Copernicus or Marie Sklodowska-Curie,” says Olejarz.

“He didn’t want to be the talk of the town, he didn’t like to stand out, he did everything during his lifetime so that he’d be forgotten and his wish has been fulfilled.”

Born in 1822 in the southern village of Zaduszniki — then part of the Austro-Hungarian Empire — Lukasiewicz acquired a pharmacist’s diploma and an interest in the petroleum found in the eastern Carpathian Mountains.

He ran experiment after experiment, sometimes triggering an accidental fire or explosion, before succeeding at refining crude oil and inventing the first kerosene lamp.

In 1853, he used it to light up the hospital in nearby Lviv, now part of Ukraine, and the following year he lit the world’s first kerosene lamp on a street in Gorlice.

Next up came the need to learn how to extract fuel from the ground in high volumes.

“In Bobrka, the first drillers were actually well-diggers who dug holes with pickaxes, shovels and hammers. The work was hard and dangerous,” says Olejarz, citing hazards including cave-ins, flooding and gas leaks.

She spoke in front of the wooden tripod that surrounds the Franek well, which is equipped with a cable pulley for pulling up buckets of oil.

By 1874, the Austro-Hungarian Empire had identified 111 wells and drilling sites in Bobrka. The deepest well went down 150 metres (490 feet).

The wells would be extended later thanks to new drilling technology, much of which was developed in the United States.

“Some say that one of the Rockefellers either came here himself or sent his associates to seek advice on how to obtain kerosene from crude oil,” says Olejarz, referring to the wealthy US family behind the company that became energy giant ExxonMobil.

“And Lukasiewicz told them everything.”

When the Rockefellers asked how much they owed him for the advice, he was said to have replied that it was free because he was working for the good of humanity — not for money.

“He was particularly modest, the archetypal nice guy, someone with passion,” says Joanna Kubit, principal of the petrochemical technical high school in the nearby town of Krosno.

“His idea was that the oil industry should above all serve to improve life in this poor province of Galicia,” the name of the region when it was an impoverished part of the Austro-Hungarian empire.

Sure enough, she says, the life of the region’s residents changed with the income generated by the sector and the considerable sums their wealthiest resident spent on public utility projects.

Lukasiewicz set up vocational schools, social insurance and municipal credit bureaus across the region. He also financed university scholarships, churches, convents and monasteries.

It was said at the time that every road in Galicia was paved with Lukasiewicz’s money.

10 Reasons Why Ship Operators Should be Nervous About the 2015 ECA Regulations Published Date : 2014-11-24 08:13:09Author : admin

As of the 1st January 2015 the sulphur limit in Emission Control Areas (ECAs) will take a highly significant drop from 1% to 0.1%. It may only look like a small number but this shift will have a high impact.

The following are Fathom cTech’s top 10 reasons why ship operators should be nervous about the sulphur challenge that the maritime industry is facing and what can be done to remain competitive.

1. The Rising Costs of Bunker Fuel  

* There is a significant price differential between Heavy Fuel Oil (HFO) and Marine Gas Oil (MGO). For example, in the previous three years the current price differential is at $260 per tonne in Rotterdam and $330 per tonne in Houston according to Bunkerworld, whilst in the previous two years Rotterdam has seen as much as $337 differential.

* MGO prices are expected to rise as much as 20% in 2015 due to the increased pressure expected on their supply.

* Maersk Line estimates that the MGO is likely to be around $900 dollars per tonne once the regulations are introduced – 50% more than what carriers pay today for regular fuel. The volume of low sulphur fuel from 2015 onwards is expected to create additional costs of around $150 million dollars per year for them.

2.  The Rising Cost of Transportation

* The cost of transportation is likely to continue to increase. Carriers will have to meet additional costs to meet the tighter pollution controls. However, large shippers may take more convincing to pay a separate low sulphur surcharge, according to Drewy Maritime Research.

* Carriers will also need to provide calculations to justify these increases.

* Avoiding ECAs to reduce fuel surcharges may result in increased transportation time.

* Increases in freight rates, particularly for short sea services,could lead to modal shift.

3.  The Practicality of Retrofitting Vessels

Scrubbers

* Large scrubbers can be costly and take up vital space on board a vessel which in turn can reduce cargo carrying capacity.

* Ship scrubbers are still a relatively ‘new’ technology to the industry. Providers may not necessarily have a well proven history of the reliability of the systems machinery and its application onboard a vessel.

* The time taken to undertake a retrofit to a vessel reduces the time that vessel is in operation, increasing standby and impacting costing.

* If the uptake of scrubbers dramatically increases, the suppliers may not be able to scale up production in order to meet the demand.

* Newbuilds may be easier and/or cheaper to run with the technology than retrofitting current vessels. If companies choose to wait and start retrofitting their newbuilds instead of current ones, their establishment of a fully functioning newbuild fleet that will meet the 2015 standards, will take considerable time to establish.

* Awareness of overboard discharge is crucial, particularly as IMO guidelines and inspections are to become more stringent in line with the new regulations.

LNG

* It is expensive and difficult to retrofit a vessel to enable it to use LNG as fuel.

* LNG retrofits are very large and often are viewed as not being cost effective. They take up a lot of space and reduce the amount of vessel available to carrying cargo.

* LNG retrofits can be a lengthy process and significantly reduce the amount of time a ship is operating in waters.

4.       Mechanical Problems Arising From Fuel Switching 

The variation in sulphur content has a significant impact on the fuel properties. Unless systems are carefully maintained and prepared, significant issues may arise when utlising the same systems with the different fuels.

* Distillates do not require heating like HFO. If the temperature of distillates is too high, the viscosity will be greatly reduced below the point at which systems function correctly.

* Pump failure can occur from increased wear due to a lower hydrodynamic lubricating fuel oil cover exists, driven by the low viscosity.

* Distillate fuels can ‘gas up’ at too high temperatures leasing to vapour locking and     fuel starvations.

* There can be difficulties during start and low load operations due to leaking pumps       from low fuel viscosity

*  Blocked fuel filters can result from incompatible fuels mixing leading to precipitation of heavy sludge and potential filter clogging. Improper engine function and shutdown are the result.

*  Pump malfunction can occur where the changeover takes place too quickly. If this   leads to total pump seizure, engine shutdown may result.

* Fuels of unduly low viscosity will flow through fine clearances previously ‘sealed’ by fuel at higher viscosity resulting in fuel leakage and reduced power.

These are just some of the issues that can arise with further being seen through the cleaning/searching action of distillates, the lubricity issues and more. However, all of these issues can be avoided by careful preparation of the vessels.

5.       Fuel Availability

The availability of fuel is of rising concern for ship owners. As demand for lower sulphur fuel rises to meet regulations, the pressure on suppliers may outweigh the ability for them to deliver. Some of the issues to be considered are:

* Low sulphur fuel may not be readily available in ports due to the increased demand. It may only be able to be supplied if specifically requested. Ship owners should not assume a low sulphur fuel can be guaranteed for them on arrival at port.

* Refineries have to reflect the availability of bunker fuel because they prioritise higher-level distillates.

* Managing price differences in fuel availability while in long-term contracts can be challenging for ship owners. A separate bunker fuel surcharge is created with changes along with fuel prices to offset the destabilising effects. Because of the volatility bunker fuel availability and cost is a huge concern for ship owners.

* Cruise ships in particular need to be aware regarding fuel availability and their choice of sailing destination. Lack of fuel availability in specific ports may result in changes to their itinerary which may also increase the cost of cruising to passengers.

* It can also not be guaranteed that the fuels will be close to the 0.1% limit. For example it maybe that distillates of automotive grade could be supplied if supplies are short which can be as low as 0.001% sulphur and have very different characteristics. Ship owners need to consider the characteristics of these fuels if they use them within their vessels.

6.       Loss of Vessel Power 

* Switching and changing of the lubricant supply to the main engine at the same time is complex and can result in ship’s loss of power and in the worst case scenario an engine room fire.

* Loss of power and the risk of accident needs to be considered in the event of a collision. Poor switchover has been reported to be a major cause of engine damage and fire.

* Lack of training and ability for crew to be able to safely operate the fuel switchover process enhances risk.

* In California, as of July 2014, 93 loss of propulsion incidents occurred of which 15 were directily related to fuel switiching to meet the state’s regulations on sulphur limits in fuel. This equates to  0.17% of all vessel movements.

* Based on the California statistics, there is likely to be an average of a loss of power incidence in the English Channel every three days. There are around 60,000 vessels which move in and out

of the entrance of the English Channel, the North Sea and English Channel ECA border annually, a loss of propulsion incident occurring from fuel switching to just 0.17% of these vessels could translate to 102 incidents per year.

Operators should ensure that not only are their systems suitably upgraded and maintained, but crew training to enhance the fuel changeover process and to minimise the risk of engine cut out is crucial.

Experience in California has proved that crew training has minimised the risks and number of incidents.

7.       Competitive Disadvantage

* Some operators choosing not to comply because of the low fines will have an unfair advantage over those who do comply. Poor enforcement will increase this competitive advantage. According to Alan Murphy, SeaIntel partner: “Our analysis shows that a 4,500 teu vessel sailing at 16 knots from the beginning of the English Channel to Hamburg will save EUR 12,000 ($16,600) if it uses bunker fuel with a 1% sulphur content, instead of the mandated 0.1% sulphur content.” If some carriers choose to take on this risk and prefer to be fined rather than expend more on compliance options, the other companies will be at a much higher disadvantage.

* Those who have committed to remaining within the permitted emission limits could effectively be punished. “Nobody wants to see a situation where those that have made the biggest commitment to the new regulation suffer the most damaging financial consequences” according to European Community Shipowners’ Association (ECSA) head Patrick Verhoeven.

* Those companies with plans for newbuilds will find it easier to comply than those who own older fleets where implementing compliance options can be more challenging. Technologies or fuel switching may prove more expensive on older vessels than newbuilds, putting newer companies with younger vessels at an immediate advantage.

* Individual member states may provide incentives such as subsidiaries or lower port charges if ships choose to comply with sulphur regulations earlier than the mandatory date.

8.       Changes to Bunker Delivery Notes

* Ship owners and operators must be aware that changes to the Bunker Delivery Note may be in force. Where technology is used to comply with regulations, as supposed to a low sulphur fuel, new text must be added to the delivery note.

9.       Lubricant: Switching plus Supply & Demand 

Lubricant suppliers may also face challenges in supplying ship owners with the required lubricant quantity to meet demand.

* Increasing pressure on marine lubricant providers will occur due to new fuels requiring new engine lubricants.

* lubricant switching is now needed much sooner with the new sulphur content of fuel. According to Iain White from ExxonMobil Marine Fuels and Lubricants ‘If the time in the ECA can be measured in hours rather than days, it may be possible to avoid changing oil, but for longer periods the oil must be switched.

10.       Vessel Adaptation Costs 

* Whatever the compliance method, increased costs for vessel adaptation will apply notwithstanding the price of fuel utilised.

* If ship owners wish to continue to use HFO they will need to install scrubber abatement technologies to comply with permitted sulphur release content. Capital expenditure can run in to the millions

* Changing fuel due to rising prices also drive engine modifications due to the variations in viscosity and increase costs of compliance.

* The separation of different fuels require separate storage tanks, exacerbating cost and creating logistical difficulties.

* The requirement for separation tanks for different fuels increases not only the technology itself but the installation, maintenance and logistical difficulties will significantly increase capital output. However, using a low sulphur fuel may provide cost efficient in the long run due to the fact that a lower sulphur fuel is kinder to the vessel engine and may help to mitigate the impacts of a higher cost fuel.

How Opec reacts to oil price low critical for the tanker market Published Date : 2014-11-10 09:04:50Author : admin

At last, there is some lift-off for the struggling crude tanker market. Earnings for VLCCs from the Gulf to Japan rose to $47,000 a day last week, and over $27,000 a day to the US Gulf.Suezmax and aframax earnings followed suit to averages of $30,000 and $31,000 a day according to Clarkson Research figures.Product carriers followed suit with $36,000 a day paid for LR2 voyages Gulf/Japan. Atlantic MRs topped $20,000 a day on some routes. Dirty products carriers earned over $20,000 a day on US Gulf trades.The rally in the crude market has continued into this week with rates continuing to rise. Plenty of cargoes in the Gulf and tightening tonnage availability have seen to that.However, how Opec reacts, at its end November meeting, to oil prices hitting a four-year low, will have a critical impact on the market. For the time being, Saudi Arabia, Opec’s largest

producer, has kept the taps open, slashing the price of contracted oil to the US in a bid to outmuscle shale oil producers who have contributed to falling US crude imports. Near-US producers like Mexico,Venezuela, and Canada will also have been hit.According to the US Energy Information Administration, total U.S. crude oil production averaged an estimated 8.7m barrels per day (bpd) in September, the highest monthly production since July 1986. Total crude oil production, which averaged 7.4 million bpd in 2013, is expected to average 9.5 million bpd in 2015. If realised, the 2015 forecast would be the highest annual average crude oil production since 1970.Some Opec producers will want the cartel to cut production in an attempt to support prices, as opposed to Saudi Arabia’s apparent policy of trying to defend market share.Opec is about to publish its latest World Oil Outlook which will no doubt give further indication of its strategy in the short to medium term.By Ian Middleton from London

Turkey's help for Mogadishu port Published Date : 2014-10-27 08:44:27Author : admin

The Somali government’s grand vision for Mogadishu port under its new Turkish managers sees modern container ships replacing wooden dhows, new cranes easing the back-breaking work of porters and a surge in state revenue as traffic rises.

Outsourcing port operations to Turkey’s Albayrak Group is one more sign of Somalia’s slow rehabilitation, a dramatic shift from more than two decades of war when clans battled for control of Somalia’s most valuable asset and let its facilities decay.

Yet the award of the 20-year contract has highlighted other challenges facing the government, which has been struggling to build public confidence after years of chaos and has been trying to reassure donors worried about corruption.

In the wake of the deal, members of parliament have accused the government of making the award without proper oversight, while labourers, fearing they will lose their jobs, have staged frequent protests.

“If you come to the Mogadishu port at the moment, you will wonder if it is a market or a port,” said Abdirahman Omar Osman, an adviser to the Somali presidency, describing how porters rush to dhows and ships as they tie-up, seeking cash to help unload.

“The Turkish company will improve the infrastructure, maximize the income of the government and bring the port to international standards,” he said.

An efficient port is vital for the government, as it is the state’s biggest single source of revenue, and essential to building a functioning economy in a nation that is still battling an Islamist insurgency and which the West and African neighbours fear could yet tip back into anarchy.

The deal might also help change the reputation of Somalia, which has become notorious as a jumping off point for pirates preying on sea lanes in the Indian Ocean, although hijackings have dropped sharply since 2012.

But it has not been plain sailing for Albayrak, which started work last month. On several occasions, clashes between Turkish employees and Somali labourers brought work to a halt, local officials said.

Last month, three Turks were beaten and a Somali was killed during a scuffle between the labourers and the Turkish workers, according to a port official who asked not to be named.

“The government deliberately handed over the port to the Turkish company without considering our right to work and earn an income,” porter Ahmed Siicow told Reuters. “Turkey wants to use its lifts instead of the thousands of porters.”

The government faces a delicate balancing act between creating a more efficient port while preserving jobs of people with few other options in one of the world’s poorest nations.

“They will not lose their jobs,” Ports and Marine Transport Minister Yusuf Moallim Amin told Reuters, adding more traffic could mean work for more porters.

Amin said he wanted traffic to grow from 3,000 containers a month — which now arrives on vessels that need to have their own cranes to unload — to 50,000 in a few years.

“Those dhows, I think they will vanish as we have more, bigger ships coming in,” the minister said by telephone.

The port’s current intake of $5 million a month from duties could double in a year with more traffic, the minister said. Albayrak will also improve collection of service fees, amounting to $1.2 million, of which the state gets 55 percent, he added.

Albayrak aims to build four new berths and repair others, bringing the number of working berths to 10.

More revenues would help a government that is now dependent on donor largesse. But the benefits of the port deal have not shielded the government from criticism from its lawmakers.

“Any deal that is not approved by the parliament remains null and void,” legislator Dahir Amin told Reuters.

Parliament has called several hearings to discuss the deal with Albayrak, a construction company whose website indicates has only one other port enterprise.

DP World, the Dubai-based firm with port operations across the globe, also showed interest, according to a source in the United Arab Emirates and a Somali with knowledge of the award.

A spokeswoman for the Somali president said Albayrak was the only firm to make a formal expression of interest. DP World said it would not comment.

Africa's oil and gas potential: Boom or hype? Published Date : 2014-10-20 08:20:20Author : admin

Africa’s oil and gas potential will grow significantly over the next two decades, driven by population growth, urbanization and the emergence of a wealthier middle class on the continent. Six of the top 10 global discoveries in the oil and gas sector in 2013 were made in Africa, with more than 500 companies currently exploring deposits there. There were nearly nine million barrels of crude oil produced daily in Africa last year, with more than 80% of it coming from established players such as Algeria, Angola and Nigeria.

This is all good news for Africa, but look behind the figures and the story is more about gas than oil.

Excitement remains around large gas finds in Mozambique and Tanzania, but even here there is much hype and unknowns.

The scale of these East African finds is not in doubt but developing these discoveries will be massively expensive and a long-term investment. Mozambique’s gas investment in particular will be dependent on what future gas prices will be — and this is changing quickly due to the oil and gas revolution.

Changing landscape

Ten years ago, gas investments in the Gulf of Guinea were made to service the U.S. market. Today, that market has disappeared and the U.S. itself is exporting gas, while Angola, Nigeria and Equatorial Guinea are now exporting to Europe and Asia.

Indeed, a decade ago it was unimaginable that Algerian, Angolan and Nigerian oil exports to the United States would have plummeted so dramatically and that India would so soon become the second largest importer of African oil after China.

The lesson is that the international market can change quickly in response to technological innovation and geo-politics.

If China and Australia develop their shale gas reserves, or if South Africa discovers and develops major reserves under the Karoo, then East Africa’s mid-term prospects could change significantly. Qatar — the world’s largest source of liquefied natural gas — could decide to

export more, also changing the calculus. The gas sector is currently concentrated in Africa, with nine-tenths of annual production volumes coming from Nigeria, Libya, Algeria and Egypt.

Gas is more costly to develop and export. I worry that governments in East Africa have become intoxicated by industry hype and have not managed public expectations — not only is future gas pricing less certain, but the profits following the large investments are much lower than oil.

Unlocking the potential

There is no doubt that Africa remains significantly under-explored by oil and gas companies. The price of oil and the incentives for exploration partly determine this, but major investors are also cautious because of the lingering challenges of corruption, lack of infrastructure and regulation.

As regulatory frameworks tighten in the U.S. and Europe, international oil companies have to be more careful about how they conduct their business. The corruption allegations over ENI in Nigeria are a reminder of this — but it is not only big oil companies that are impacted.

The Securities and Exchange Commission (SEC) investigation into U.S.-listed Cobalt International Energy has ensured that despite its exciting hydrocarbon in the Angolan pre-salt concessions it is unable to farm out to a major or super major International oil company and its share price has suffered. Likewise, the Houston-based oil and gas company Hyperdynamics Corporation’s share price tumbled in 2013 when the U.S. Department of Justice and the SEC requested documents relating to its business in Guinea.

Look carefully and you can see the oil industry responding to greater scrutiny. In Angola this year, the Norwegian oil company Statoil successfully flipped its equity exposure from a partner that raised eyebrows to two small international oil companies with better probity records.

Although finding oil and gas in Africa can still be low cost, developing it needs deep financial investment and long-term commitment. African governments that manage better their regulatory and business environment are more likely to attract this type of investment that is needed to unlock their natural resource endowments, which in turn can generate revenue.Source: CNN

Dealing with charterparty issues in Ebola-affected ports Published Date : 2014-10-13 07:10:43Author : admin

Due to the fact that standard charterparties do not contain clauses specifically drafted to deal with Ebola-affected ports, fever and epidemic clauses can be drafted. However, where they are

absent from a charterparty there are a number of issues that can arise, according to UK think-tank Gray Page.

“The general rule is that the Master is obliged to follow charterers’ orders – and a charterer is to pay hire continuously through the charter period. Whilst the Safe Port warranty generally relates to the safety of the vessel and cargo, an unacceptable risk to crew may render the port unsafe. Nevertheless, the presence locally of Ebola may not render a port unsafe per se, particularly if there is to be no direct physical contact between the crew and persons at the port,” the think tank explained.

As a result, charterers’ primary obligation is to nominate a port which is prospectively safe. If the port becomes unsafe after nomination, owners and charterers may wish to check whether the charterparty has a Liberty clause which may be invoked.

Speaking of potential delays at both Ebola-affected ports and for vessels arriving at other ports after calling at Ebola-affected ports, the think-tank said that there is a risk that a vessel could be placed off hire if it is quarantined prior to being allowed entry to a port.

“Therefore, Quarantine and Free Pratique clauses should be examined as they may affect both the commencement of Laytime and the giving of Notices of Readiness.”

 

Contingency Planning

As stressed by Gray Page, it is essential for any owner, operator or manager with vessels trading to ports in Ebola-affected countries (or even passing by them), to have a plan of action for certain contingencies:

A crew member presents with symptoms indicative of Ebola while at sea after a port call in an Ebola-affected country – or while alongside in an Ebola-affected country.

A supernumerary presents with symptoms indicative of Ebola while at sea after a port call in an Ebola-affected country – or while alongside in an Ebola-affected country.

A vessel needs to deviate to a port in an Ebola-affected country in emergency circumstances (Port of Refuge, major medical incident not Ebola-related).

A vessel is quarantined at a port following a previous call at port in an Ebola-affected country because one or more crew suspected of having contracted Ebola.

Plans should identify the roles, and delineate the responsibilities of, those responding to any such eventualities, as well as establishing:

Points of contact for relevant national/local authorities (health, port, diplomatic, law enforcement)

Identification of correspondents, enablers and subject matter experts (locally and internationally)

Priorities for allocating resources and applying them

Gray Page forecasts that the shipping industry should expect Ebola outbreak in West Africa to be having an impact on operations deep into 2015.

“Fortunately, the risks to crews of contracting Ebola are extremely small if common sense precautions are taken. Unfortunately, contractual disputes between owners, charterers, shippers and receivers are an almost inevitable consequence of the growing restrictions on ships trading to and from ports in Ebola-affected countries,” the organization concluded.

Changing times for Gibraltar and its bunkering industry Published Date : 2014-09-30 08:49:25Author : admin

For many years a major revenue stream for the tiny British territory, plans by the Gibraltarian government to move away from floating storage vessels have had an impact for bunkering operations at the Rock with suppliers moving to straddle their operations with its neighbours.

Although environmentalists will be happy that the risks associated with at-sea bunkering operations – mostly spillages – are being averted, the altered supply chain is making Gibraltarian providers far more vulnerable to rivals in Algeciras, in Spain, and Ceuta, in Tangier.

As a result, nearly every supplier has made moves to effectively straddle Gibraltar and its neighbours, with operations like Aegean Bunkering and Peninsula petroleum moving to Algeciras and Tangier Med. Now, Gibraltar’s ability to provide vessels with fuel depends largely on the availability of barges coming in from Spain. “All floating storages are gone,” explains explains Paul Imossi of ship agent Smith Imossi. “You now have to look at the region, when you look at Gib.

“Algeciras… have now deregulated their bunkering industry. In Algeciras now, Vopak have huge storage capacity, and they’ve given VTTI the go-ahead for another 400-500,000 tonnes of storage.

“Ceuta is also picking up. They have land storage, and Gib Oil” (another player in Gibraltar providing fuel for super yachts), “brings in gas oil from Ceuta. Ceuta’s main market is small coastal vessels performing alongside-bunkering, something we can’t do in Gibraltar; we don’t have land storage or mooring space, and we don’t have wharfage space, due to the fact that cruise liners take up the North Mole, from April to October.”

Smith Imossi uses bunker barges from Algeciras to serve vessels moored cheaply off Gibraltar’s shores. As long as the tax incentives in Gibraltar are maintained, it will always be worthwhile anchoring vessels there, whichever direction their fuel comes from. “Algeciras has opened up licenses and the reality is that you have the same operators there as you do in Gibraltar – Cepsa,

Bominflot, Inchcape, InCargo, MH Bland, Gibunco. The only one not in Spain is VEMoil. Algeciras is pretty much intertwined with us now. We have to load in Algeciras – they haven’t got it quite right yet, so it takes a long time to load. We’re getting big delays with bunker barges not being ready.”

In a competitive manoeuvre, Gibraltar’s government recently cut tonnage dues for vessels mooring on the Mediterraean side of the rock by 75%. Bunkering is not allowed there, but other aspects of ship servicing are welcome. “After bunkering, they can go and anchor on the East side, where you can do stores, spares and crew changes. The current government have reduced fees in order to compete against Algeciras.”

Further, there are rumours of plans to widen the “detached mole” – a spit of reclaimed quay wall out in Gibraltar’s harbour – to accommodate fuel storage facilities for bunkering ships and guarantee the integrity of supply.

Another plan for local infrastructure includes the building of an LNG-powered electrical plant on the “North Mole”, which would have its own facility for gas storage. Would this open up the possibility for LNG bunkering at the rock? “It makes sense,” says Imossi. “We have notified the government about the possibility of LNG Bunkering.”

So where will owners operating in Europe get their fuel in the future? “Each place has its own market,” Imossi explains. “Ceuta has the shortsea shipping alongside market – it has one bunker barge. We’re a bit more exposed in Gibraltar, a bit more delicate.”

“The region is growing. I think the game now is that they’ll go when there’s less congestion. [Gibraltar] is still cheaper on cost, but it depends on availability.”

Would Scottish independence have impacted the maritime industry? Published Date : 2014-09-22 08:32:09Author : admin

The long-awaited vote on the Scottish independence which took place last Thursday saw international maritime players raise concern on the possible effects of the vote on the Scottish maritime industry.

According to Moore Stephens’s recently conducted survey of the international shipping community members on the impact of the vote, over half of respondents (55%) felt the vote could have a negative effect.

The results of the survey showed that, overall, the majority of those who predicted negative effect had an existing business relationship with Scotland, while those respondents with no

existing business relationships with Scotland thought that a Yes vote would have a positive effect.

However, 74% said they had no plan of action if Scotland voted to abandon the Union, indicating a high level of confidence in a No vote, according to the survey.

Cassie Forman, Moore Stephens director of Shipping and Offshore Maritime, said: “The shipping and offshore maritime industry is a vital part of the Scottish economy – it plays a critical role in the North Sea oil and gas industry, for example. It is an industry that will play a central role in the economic fortunes of Scotland whatever the outcome of the vote.”

The UK Chamber  of Shipping has raised various issues concerning shipping that should be addressed by Scotland if the majority had voted Yes.

According to the UK Chamber, obvious questions include establishment of a separate ship registry and MCA; taxation of shipping, followed by potential introduction of work permits and trade restrictions, seafarer training standards along with funding and provision of marine safety infrastructure (coastguards, lights, emergency tugs etc).

Having in mind that not too many ships are calling at Scottish ports, the Chamber President Ken MacLeod, was quoted by BBC as asking: “Are ships calling at a Scottish port going to have to pay four times the dues that they pay at the moment?”

The Scottish Government said that these issues would be addressed in a form of consultation with relevant stakeholders after the referendum.

The future of the oil and gas sector were also a key issue in the debate. Energy and research consultancy group Wood Mackenzie said the issues to be addressed ‘Yes’ votes had won would have included fiscal (un)certainty, the offshore boundary and regulatory change.

Wood Mackenzie said that oil and gas companies closely followed the result of the referendum, and the potential issues which might arise in the event of a ‘Yes’ vote, but of more pressing concern to the industry was the underperformance of exploration and production on the UK Continental Shelf (UKCS).

“Fiscal uncertainty is a chief concern of oil and gas companies in the UKCS and there is an ongoing review of the industry’s fiscal terms. Regardless of which government is in charge of the industry, companies will seek stability and simplicity around existing fiscal terms as well as tax incentives for harder to produce reserves.  Industry engagement will be paramount to maximising value for both government and companies,” Wood Mackenzie said.

“We estimate that by 2030 nearly US$9 billion of tax relief will be claimed in respect of decommissioning spend on Scottish fields. This relief has been guaranteed through the Decommissioning Relief Deeds (DRDs) that exist between licence holders and the UK Government. The Scottish Government has stated that it will provide similar contractual certainty on decommissioning tax relief in the event of independence.”

In addition, Wood Mackenzie explained that a border for oil and gas activities would need to be negotiated if it had been a Yes to independence, as prolonged dispute could cause uncertainty and negatively impact the investment plans of companies active in the disputed area.

Wood Mackenzie made a forecast that the bulk of UK oil and gas reserves lie in Scottish waters, and forecast that an independent Scotland would control the vast majority of production as well as the most prospective acreage.

In terms of remaining reserves, Wood Mackenzie estimated that circa 15.3 billion barrels of oil equivalent remain in the UK. This comprises reserves which are being produced, yet to be produced and yet to be found:  the Scottish portion of commercial reserves is 84%.

All of these worries will be set aside for now as the nays have it.

Digital pirates and the growing threat of cyber-attacks to shipping Published Date : 2014-09-08 08:09:08Author : admin

In a world where young men are willing to pounce on VLCCs using only guts, wooden boats and rusty Kalashnikovs, the threat to shipping and maritime may now also be coming in a much more subtle manner from the computer hacker.

Cyber security may be right at the top of the international agenda, exemplified by Barack Obama’s 2013 statement that the “cyber threat is one of the most serious economic and national security challenges we face”. But – like most things cyber – shipping has not been taking it particularly seriously until recently.

Recently, International Maritime Bureau took time out of battling corporeal pirates to warn shipping about the risks of digital ones, which warned shipping is becoming the “next playground for hackers”.

In fact, it arguably has been for some time, after it was discovered in October last year that for two years, hackers had been intercepting drug shipments at the Port of Antwerp and disappearing containers from its systems.

Later that month it was found that, using less-than-$1,000 technology, hackers could interfere with easily-accessible ship AIS systems to make entire ships disappear altogether from tracking systems, make non-existent vessels appear, or in this particular case make a ship’s reported course spell out “PWNED” (or “I own you” in online gaming parlance).

Not every system is as easy to access as AIS, however. In spite of the Hollywood-perpetuated myths, most networks – such as port control systems – are independent of the World Wide Web and are more than a flurry of improbably-fast typing away. In these cases, more rudimentary tactics are required, such as e-mail viruses, or famous hacker Kevin Mitnick’s strategy of simply phoning up and sounding authoritative: “A company can spend hundreds of thousands of dollars on firewalls… but if an attacker can call one trusted person within the company, and that person complies… then all that money spent on technology is essentially wasted,” he once remarked.

“We see incidents which at first appear to be a petty break-in at office facilities,” said TT Club Insurance claims expert Mike Yarwood in a recent TOC presentation. “The damage appears minimal – nothing is physically removed. More thorough post incident investigations however reveal that the ‘thieves’ were actually installing spyware within the operator’s IT network.”

In June, the US’ Global Accountability Office (GAO) criticised the nation’s Coast Guard, Federal Emergency Management Agency (FEMA) and lawmakers for failing to address cyber security despite the fact that its ports handle at least $1.3 trillion worth of cargo every year.

“The operations of these ports are supported by information and communication systems, which are susceptible to cyber-related threats,” the report stated.

The report went on to highlight the possible directions from any given cyber-threat could spring, listing hackers – who “break into networks for the thrill of the challenge, bragging rights in the hacker community, revenge, stalking, monetary gain, and political activism,” and who could “download attack scripts and protocols from the Internet and launch them against victim sites”, alongside organised crime syndicates, rival logistics firms, disgruntled employees, other nations, and – of course – terrorists, who could “destroy, incapacitate, or exploit critical infrastructures in order to threaten national security, cause mass casualties, weaken the economy, and damage public morale.”

“Until the Coast Guard completes a thorough assessment of cyber risks in the maritime environment, the ability of stakeholders to appropriately plan and allocate resources to protect ports and other maritime facilities will be limited.”

If one were of a mind to destabilise the global economy, attacking 90% of world trade might not be a bad place to start. But the more immediate risk is that of losing money. While some will be comforted by the lack of case-studies for shipping cyber-attacks, many suspect that this doesn’t reflect the reality of the situation. No company wants to admit that its cyber-security has been compromised, but information-sharing, ironically, may turn out to be the best defence as we move into an ever-more digital future.

Is Ghana becoming a piracy hot spot? Published Date : 2014-09-01 08:04:01Author : admin

Two recent attacks have raised concerns that Ghana could be turning into a hot spot for piracy and armed robbery at sea. On Friday, 26 July, the oil tanker Hai Soon 6 was reported missing off Ghana’s coast.

This followed after an attack on the oil tanker Fair Artemis, which had taken place on 4 June 2014. Given that this area is not known to be a piracy hot spot, these attacks should sound an alert to West African authorities to take quick action and prioritise cooperation in maritime security.

This latest incident demonstrates that no West African country can claim to be immune from piracy, despite assurances to the contrary from Ghanaian leaders. This also highlights, more broadly, that there is a prevailing lack of cooperation among the operational personnel who are responsible for maritime security in West Africa; something which pirates are exploiting.

The Ghanaian authorities have expressed confidence in the security of their coasts, and say that this is being achieved through a number of developments. These include the acquisition of patrol boats operated by the navy and maritime police; setting up of a vessel traffic management system; and security cooperation with neighbouring countries.

Following the Fair Artemis hijacking, Paul Asare Ansah, Head of Public Relations for the Ghana Ports and Harbours Authority, stated that “Ghana regularly maintains the security of its anchorage, having obtained boats that constantly maintain vigilance over its waters together with the navy and the maritime police.”

Adding to this statement, James Agalga, Ghana’s Deputy Minister of the Interior, said that security measures make the coasts of Ghana “too dangerous for pirates to operate”.

Ghanaian authorities unanimously say that the Fair Artemis was hijacked in the maritime space belonging to Togo. It remains to be seen whether they will allege that the latest attack also took place in the waters of neighbouring Togo.

The situation that Ghana is experiencing is reminiscent of what happened in Côte d’Ivoire in 2012 and 2013. Côte d’Ivoire, under the illusion that it was safe from piracy, experienced four successive pirate attacks within four months: the Orfeas on 8 October 2012; the Madonna I on 23 December 2012, the Itri on 16 January 2013 and the Gascogne on 2 February 2013.

As a result, Côte d’Ivoire port authorities have since conceded that there is no secure maritime route, as the pirates have continued to be unpredictable and strike where least expected.

It is important to note that the pirates released the Hai Soon 6 on Sunday 3 August – after stealing part of the cargo – around 60 nautical miles east of Lagos, Nigeria, leaving the crew unharmed.

For this hijacking, the Gulf of Guinea pirates followed their usual modus operandi. The pirates took control of the ship late at night (around 11:40pm) while the tanker was engaged in a trans-shipment operation with another vessel. They disconnected the ship’s communication and automatic identification systems, steered her towards an isolated area to sell the cargo and then abandoned the ship, without harming the crew members.

An effective response to counter maritime security threats requires human resources, technical resources and a coordination system. In West Africa, the human resources exist in terms of the number of staff and their qualifications; and technical resources are being acquired – as shown by recent statements regarding the procurement of patrol boats.

The most important issue in combating piracy is therefore not necessarily the issue of resources, but rather the lack of effective cooperation and coordination between maritime security bodies.

This regional problem is also relevant to Ghana where, despite political assurances to the contrary, there is scant evidence of any significant cooperation between the navy and the maritime police.

This cooperation, which is crucial for managing the maritime domain, is also lacking in other West African countries.

In Nigeria, for instance, the navy and the maritime police need to coordinate their activities and increase collaboration – as demonstrated by the incident of the Histria Coral.

On 23 October 2013, a Nigerian maritime police unit mistook a small boat transporting Nigerian navy personnel for a pirate boat and opened fire on the vessel. Fearing the anger of the navy, the policemen locked themselves into the Histria Coral’s citadel (a safe room designed for crew members to seek protection in the event of an attack) for days before they were arrested.

In Côte d’Ivoire, while a maritime strategy is being established, the navy and the General Directorate of Maritime and Port Affairs are involved in a tug-of-war around a decree (decree 2014-181 signed on 10 April 2014). The Directorate believes that the decree deprives it of its operational missions.

Senegal is no exception either. In 2006, the High Authority for the coordination of maritime security, maritime safety and marine environment protection was created. Despite this, the country has yet to resolve the challenges created by the often-acrimonious relationship between the navy and the National Agency of Maritime Affairs.

It is encouraging that attention is being focused on maritime security in West Africa through the acquisition of technical resources such as patrol boats.

However, the threat of escalated piracy will remain as long as there is lack of cooperation and coordination between maritime security forces.

 

Violence and Kenya's ambitious deep seaport project

Published Date : 2014-08-25 09:02:22Author : admin

Kenya is making a multibillion-dollar wager that an ambitious seaport project in its restive coastal region can trump the land disputes and terrorism that threaten its economy.

The construction of a deep-sea commercial port in the Lamu resort area aims to create a transport and trade corridor that includes oil-rich South Sudan, fast-growing Ethiopia and coastal Kenya—a mammoth undertaking boosters say will turn Lamu into a global economic hub.

By 2018, the Lamu Port and South Sudan-Ethiopia Transport Corridor, or Lapsset, is expected to include three deep-sea shipping berths, new roads and trains linking the port to neighboring countries and pipelines to transport oil from fields in Uganda and South Sudan. Kenya eventually plans to build an oil refinery and add 29 more berths.

But recent violence has turned Lamu into a no-go zone for tourists, and analysts warn that investor interest in the project is likely to wane as Kenyan authorities struggle with a worsening security situation. So far, the only international investors are a Chinese company building the first three berths and the African Development Bank.

“The security climate is foremost in people’s minds,” said Clare Allenson, an Africa analyst with Eurasia Group, who said she expects planners to reduce their ambitions for the port as a major shipping hub. “Lapsset is a real thing, but on a much smaller scale than what has been discussed.”

Peter Oremo, who has overseen the project’s first stages, said the Kenya Ports Authority has increased security in the area. A 6 p.m. curfew, he added, has improved the situation.

Consultants for China Communication Construction Co. 1800.HK +1.34% —a Chinese company that this month was awarded the 42 billion Kenyan shilling ($475.9 million) contract to build the first three berths—are proceeding following shootings in nearby Mpeketoni that killed 65 people in June, Kenyan officials said. The company didn’t immediately respond to questions about the project.

“These were minor occurrences. They were minor misunderstandings,” Silvester Kasuku, director of the Lapsset authority, said. “The government is equal to the task to deal with the issue of insecurity.”

But the Mpeketoni attacks, which stemmed from land disputes but cut along religious lines, were just the latest signs of Kenya’s unsettled security situation. Murders of radical Muslim clerics in the southern port town of Mombasa have stirred anger and fueled recruitment among militant groups. Last September’s assault by a handful of Somali militants on a Nairobi shopping mall turned into a four-day siege that left at least 67 people dead—before Kenyan security forces detonated a part of the mall where gunmen were hiding.

The Kenyan government says it is taking measures to increase security and fight terrorism, but broad sweeps to round up ethnic Somalis haven’t engendered confidence.

Kenya’s neighbors are grappling with security challenges as well. In the past year, conflict between South Sudan’s president and his former deputy has sparked violent conflict, complicating plans for a new oil pipeline to Lamu. Such a pipeline could also become an attractive target for Somali militants.

Meanwhile, residents have vowed to stop the project, saying it would expropriate ancestral land. Mr. Kasuku said plans to compensate displaced people were under way and opposition would likely cease once payments were made.

The Kenyan government this month ordered the repossession of 500,000 acres of land in the Lamu region it said was acquired fraudulently by 22 separate landowners. Local activists said the order would displace farmers and herders from lands they have worked for more than a century. Many people who have lived in the area for generations don’t have land titles and are being lumped in with more recent prospectors, said Ishaq Khatib Abubakar, a member of a group called Save Lamu. “They will demolish the minority tribes.”

The tensions are creating challenges to attracting foreign investors and expatriate project managers.

“You maybe can use some local labor, but you definitely will need foremen and others from your company to oversee the project,” said Mark Bohlund, a London-based economist on sub-Saharan Africa for IHS Inc. “If you feel you can’t guarantee the safety of these employees you’re deploying, you may reconsider.”

The ADB, which is funding some of the roads that will link the port to neighboring countries, said the project will move ahead regardless of security issues.

“Timelines will have to adjust some,” said Gabriel Negatu, the bank’s regional director. “Going forward, the government will have to strengthen security, not because of the projects but because of concern for the people there.”