The congested port of a congested city, the Malé Commercial Harbor has long faced delays in vessel turnaround. However, under a new leadership, Maldives Ports Limited (MPL) is turning an impossible situation into a manageable one, improving on every sector of the trade, while planning the construction of a new modern port.
What are the main challenges of the port infrastructure in the Maldives?
The Maldives is an import-based economy. Nearly 90 percent of all goods arrive via sea freight, and most of it lands in the Malé Commercial Harbour, the country’s biggest and busiest port facility. The port has been running on overcapacity for years, which causes great delays. At a point, some vessels had to wait up to 19 days to offload their goods. From July 2018 until December 2018, the average turnaround time was around nine days per vessel. Shippers expect the vessel to be sailed back after offloading within three days, which is the industry average for ports in the same category. Nowadays, some modern ports can do it in six hours, so we have a lot of catching up to do. Maldives is geographically situated in a very lucrative location, from a trading point of view. We are centrally-located within several prominent trade routes which makes our country a perfect destination for a transshipment port, provided we have the proper infrastructure.
What solutions have been deployed to overcome the challenges?
We had to consider a three-stage solution, focusing on what we could do immediately, what we could do in the short to medium-term (1-2 year horizon), and the long-term solution. When we started in January 2019, we focused on clearing the yard, disposing of unused materials and repairing the broken equipment. With adjustments to our procedures, during the first quarter of 2019 we managed to reduce vessel waiting time to 4.5 days from a nine-day average. In the medium-term, we need investments in additional heavy port equipment. The port was originally designed for just 50,000 containers. Currently, we have around 129,000 containers and lack land space for expansion. This represents an additional challenge, which brings us to the long-term solution. We are planning to relocate the port to either the island of Thilafushi or Gulhifalhu. The new facility will meet all expectations of a modern container port.
How advanced is the new port plan?
Initially, there was a firm plan to move the port to Thilafushi. However, the planning committee recently started to study Gulhifalhu as a possible location. We hired a consultancy company to evaluate the most suitable option. The study will last approximately six months. Once the study is conducted, the completion of the port will take about two to three years, including all the land reclamation process. The new port will have a capacity of around 220,000 containers, enabling turning vessels around in one to two days. The estimated cost for a port like this amounts to $250 million.
What will be the impact of this move for the country?
From an economic perspective, the impact will be massive. The current process itself creates a lot of unnecessary costs. A daily rate for a freight ship can be as high as $40,000 per day. Longer waiting time translates to higher prices of the products sold, which is ultimately paid by the consumer. As 70 percent of all imports are cleared in the Malé port, nearly every product in the country is affected by these costs. With the new port, the cost of goods in the Maldives should immediately go down. Furthermore, it will improve the country’s image significantly. It will bring back companies that ceased operating here due to delays and will attract new businesses. Furthermore, there will be major practical benefits. Moving the port out of Malé will transform the city, relieving congestion by removing port related traffic from the city’s streets.