Kizad industrial zone will only succeed if it has free access to global markets, low operating costs and meets guidelines for the ease of doing business, says the chief executive of ADPC.
Abu Dhabi's Kizad free zone at crucial stage
Abu Dhabi's Kizad industrial zone will only succeed if it has free access to global markets, low operating costs and meets guidelines for the ease of doing business, says Tony Douglas, the chief executive officer of Abu Dhabi Ports Company (ADPC).
"The success of this project will depend on three benchmarks. Access to global markets, low operating costs and ease of doing business," he said after he confirmed phase 1 of Kizad would open on September 1.
"Kizad is at the crossroads between the West and Asia, and between China and the south. It is a free zone, and operating costs for our customers couldn't be much lower. The cost of electricity … is an eighth of the cost in Europe.
"But here in the UAE our bureaucratic activities are unwieldy. Everyone tells me they have problems relating to permits and clearances."
His sentiments were echoed by Paul Reynolds, the managing director of Rothschild, and Michael Tomalin, the chief executive of the National Bank of Abu Dhabi, who agreed levels of bureaucracy were, "tending to hold the region back".
All three were attending the Global Financial Markets Forum at the Emirates Palace hotel in Abu Dhabi. The US$2.6bn (Dh9.55bn) Kizad project, launched in 2007, was on course to become one of the globe's major port hubs, said Mr Douglas.
The project includes a major deepwater port and a vast industrial site of almost half a million square kilometres - equivalent to two thirds the land mass of Singapore.
Mr Douglas said ADPC had been presenting to industrialists around the world to attract global companies to the complex.
"We have over 30 companies signed up and we expect that figure to rise rapidly in the course of this year," he said.
He said interest for Kizad's Zone A had mainly come from the aluminium sector, and that ADPC was attracting significant interest from the steel, heavy engineering, glass and pharmaceutical industries.
"What we are offering is economies of proximity to these industries," he said.
"We have a power station on our doorstep. If you travel east or west, we are four hour's time difference from an industrialised population of over 2.6 billion. Etihad rail will run through the centre of Kizad and terminate at the container port," Mr Douglas said.
Emirates Aluminium's (Emal) smelter was already on site and the synergies for them was providing a working example of what was possible.
"They call aluminium 'liquid electricity' because of the amount of electricity it consumes to make it.", Mr Douglas said.
"First you melt it, then you cool it into billets, transport it tens of thousands of kilometres, then melt it again to shape it into components. Here you have the power and the space to do it all on one site. You can eliminate the mid-stream re-melts."
One of the first consequences of the phase 1 opening will the redevelopment of Mina Zayed, which has been Abu Dhabi's main port for more than 30 years.
The container port will be moved by increments between the end of the fourth quarter this year and the middle of next year.
However the roll-on roll-off and general cargo facilities will remain operational.
ADPC also intends to build on its cruise traffic, which jumped 148 per cent last year by building a dedicated cruise-liner terminal, said Mr Douglas.
"The development of Kizad is crucial to the UAE's 2030 plan. It forecasts a GDP of $418bn, and we see Kizad contributing $41bn to that figure," he added.
Last week ADPC took delivery of the first batch of Super Post Panamax "ship to shore" container cranes at Khalifa Port that is being built to serve the huge Kizad complex.
Once operating, it will be the first semi-automated port in the region, equipped to handle an initial capacity of 2 million TEU (Twenty-foot equivalent) containers and 12 million tonnes of general cargo annually.