Biggest Container Port in the Middle East: Iraq’s Grand Al Faw Port Nears Completion, 2 OCT

 Biggest Container Port in the Middle East: Iraq’s Grand Al Faw Port Nears Completion, 2 OCT

Grand Al Faw Port, the multi-billion-dollar project in Iraq, is inching closer to completion. The port, which is expected to become the largest container port in the Middle East, is currently two-thirds complete and is being undertaken by South Korea’s Daewoo E&C company. With a planned total of 90 berths, the port is set to become a cornerstone of the Iraqi economy. The first phase, which includes the construction of a five-berth container terminal, is set to be completed by 2025.

Faw Port Project: A Look at the Progress

Located on the Persian Gulf coast of Iraq, the Faw Port project is a major development endeavor that kicked off nearly a decade ago. The project has faced numerous obstacles, including funding issues and political challenges, but progress has been steadily made. As of now, about 68% of the five berths have been completed, up from just 19% three years ago. The first berth is expected to receive its first vessel soon as part of a trial operation.

The port is projected to have an annual capacity of handling 99 million tons, and once fully operational, it will rival some of the largest ports in the world. The ambitious project doesn’t stop at the port; it includes rail and road links extending through Iraq into Turkey and Europe. A 36-mile road connecting to Iraq’s current Port of Umm Qasr is already in the works. Additionally, a 745-mile rail and motorway project known as ‘The Development Road’ that links the Grand Faw Port to Turkey has recently been launched. This $17 billion project aims to transform Iraq into a central transit hub by shortening travel time between Asia and Europe, posing a potential rival to Egypt’s Suez Canal for speed to market.

Economic Impact and the Role of China

China is one of the countries that have shown significant support for the construction of Faw Port and the creation of The Development Road. By striking a $10 billion deal with Iraq, the Chinese government has expressed its intention to contribute financially to both projects. This support is aligned with China’s interests in the region, as the country imports approximately 10 million barrels of crude oil daily, with a majority coming from Middle Eastern countries, including Iraq.

With Faw Port’s completion, China will have more direct access to the oil resources it imports from the Persian Gulf. In 2022, China imported $53 billion worth of oil from Iraq, marking a 43% increase compared to 2021. The new port is expected to provide more opportunities for Iraq, China’s third-largest global oil supplier, to increase its oil exports. Additionally, the trade corridor extending to Turkey and Europe will enable China to deliver its non-oil products to the European market more effectively.

Both the Faw Port and Development Road projects intersect with China’s Belt and Road Initiative, offering an alternative route for China to expand its global trade network through Gulf countries such as Iraq.

The Future of Iraq: Jobs and Economic Growth

The completion of the Grand Al Faw Port is expected to lead to a significant economic leap for Iraq. The port is projected to generate over $5 billion in annual revenue, reducing the state’s dependence on oil. It is also set to open the door for investment and put the country on the path of development and prosperity, especially when integrated with other economic projects such as The Development Road.

The project has already created over 10,000 jobs for Iraqis, with 70% of the workforce coming from the city of Basra. Upon the port’s inauguration, it is expected to provide thousands of more jobs and revitalise the Iraqi labour market. The necessary financial allocations for the port will come from Iraq’s general budget for the next three years, ensuring its completion on schedule.

Prime Minister Mohamed Shaaa Al-Sudani has emphasised the importance of viewing the Faw Port Project in the wider context of overall development. He insists that any agreements or plans to operate the port post-completion must align with the pre-arranged timeline and planned project details, viewing the Port and the Development Road project as components of a single system destined to be a future cornerstone of the Iraqi economy.

LINK