An investment of €230 million over 30 years, followed by additional investments of up to €200 million over the next four years.
Maritime Tickers Special – Iyad Khalil
The Syrian government and the French CMA CGM Group signed a partnership agreement MoU in early May. This agreement represents a “strategic shift” in the management and operation of Syrian ports, aiming to modernize the port’s infrastructure and improve its efficiency in accordance with international standards.
The contract stipulates an investment of €230 million over 30 years, including direct investments of €30 million in the first year, followed by additional investments of up to €200 million over the next four years.The agreement also includes “the construction of a new 1.5-kilometre-long, 17-metre-deep quay, which will enable the port to receive giant ships that were previously unable to dock.”
The importance of this agreement
The agreement represents a test of the “New Syria’s” ability to attract foreign direct investment, as well as its ability to compete with other major commercial ports in the region.
The port of Latakia has significant economic and historical significance in Syria. It is one of the oldest ports established on the Mediterranean coast and represents one of the city’s most important economic sectors. Most of the country’s non-oil needs are imported and exported through it.
The first strategic partnership
The contract represents the first announced strategic partnership between the Syrian government and a major international company since the fall of former President Bashar al-Assad’s regime last December.
However, this is not the first time the French company CMA CGM has operated the container terminal in Latakia. It previously operated there under a contract signed in 2009 as part of the Latakia International Container Terminal (LICT), established in partnership with Syria Holding Company.
The previous contract committed to investments not exceeding $50 million over 10 years and included maintenance and rehabilitation of the port’s infrastructure.
Last February
Last February, the Syrian General Authority for Land and Sea Ports announced a new agreement with CMA CGM to operate the container terminal at the port of Latakia. The statement explained that “an agreement was reached to settle previous debts owed by both parties over the past decade and conclude a new contract to operate the terminal under new terms and mechanisms.”
Regarding the fundamental difference between the current contract and its predecessor, he said, “The environment in which the 2009 contract was signed did not provide any stable investment conditions, and there was a lack of governance and transparency, not to mention the security and political conditions that subsequently swept Syria.”
Today, we are faced with a partnership based on a modern investment model, one that relies on professional management, direct capital injections, and the transfer of advanced operating technology used in the world’s most important ports.
In addition, the CMA CGM Group’s investments “will be used to develop and renovate the infrastructure and superstructure of the Lattakia port, as well as to maintain and rehabilitate the quays and replace or update existing equipment in line with international standards. This will enhance container management efficiency, speed up handling operations, and improve the port’s competitiveness regionally.”
Profits up to 70%
The contract includes a “fair and transparent profit formula,” with the state starting with a gradual share of the profits that increases with the number of containers handled, reaching 70% of net profits, compared to 30% for the company.
Also dry ports
The General Authority for Land and Sea Ports also signed a memorandum of understanding with CMA CGM on May 23 to establish and operate dry ports in the Syrian-Jordanian Joint Free Zone and the Adra Free Zone in rural Damascus, as part of a plan to enhance commercial transport and logistics infrastructure in the country.
Accelerate operations
The Syrian government and the French CMA CGM Group have agreed to begin the second phase of the Lattakia Port development project, in addition to adopting dry ports and developing freight transport mechanisms.
The agreement was announced following a meeting between Syrian President Ahmad al-Shara and a delegation from the CMA CGM Group, headed by its Chairman Rodolphe Jacques Saade, at the People’s Palace in Damascus.
According to a post published by the Syrian Arab Republic Presidency on its official social media accounts, the two sides stressed the need to expedite the implementation of the second phase of the agreement signed between the company and the General Authority for Land and Sea Ports, which stipulates the construction of a new dock at the Lattakia Port.
The two parties also agreed to adopt dry ports and develop freight transport mechanisms through Damascus International Airport, as part of a comprehensive plan to improve Syria’s logistics infrastructure.
New operational mechanisms
The first batch of modern operational equipment has arrived at the Port of Lattakia, as part of an agreement signed between the General Authority for Land and Sea Ports and the French company CMA CGM.
The first since 2009
This step, the first since 2009, is part of a comprehensive plan to modernize the port and equip it with the latest operational equipment.The shipment included six flatbed containers containing three main components for high-tech Reach Stacker cranes, manufactured by the Finnish company Konecranes, which specializes in port equipment. Three other containers included spare parts and equipment necessary to operate and maintain these cranes and ensure their continued operation.
This step marks the actual launch of the comprehensive modernization project at the Port of Lattakia. The new equipment will contribute to accelerating loading and unloading operations and increasing the port’s capacity to handle larger volumes of cargo, enhancing its role as an advanced logistics center providing quality services for maritime trade.
It is noteworthy that the Damascus government announced the establishment of a General Authority for Land and Sea Ports, with the Customs, Border Posts, and Free Zones Corporation attached to it.
The Syrian Prime Minister’s Office said in a statement on Tuesday, December 31, that it had established a General Authority for Land and Sea Ports, affiliated with the Council of Ministers, and enjoying administrative and financial independence.
The ministry’s statement
According to the ministry’s statement, the newly created authority will oversee and regulate humanitarian and commercial entry and exit, oversee maritime navigation and transport operations, and own and lease commercial vessels and real estate necessary for its operations.
Ports of Latakia and Tartous
The Ports Authority has also attached the administrations of the ports of Latakia and Tartous, the Directorate of Ports, the Maritime Transport Corporation, the Maritime Agencies Company, Customs, the Free Zones Corporation, and the border posts. All employees of the institutions and directorates attached to the Ports Authority have been transferred, with their salaries, status, and seniority retained, in preparation for future promotions.
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