Djibouti’s new gantry cranes silhouetted against the sky.

Two giant ship-to-shore gantry cranes rise high above the International Port in Djibouti, proud testimony to the successful completion of Phase IV of the Djibouti Port Expansion Project. The new cranes represent the most visible aspect of an undertaking designed to improve services at the container terminal by extending a quay, modernizing equipment and enlarging the container storage area. Co-financed by the OPEC Fund, four other Arab aid institutions and the Republic of Djibouti for a total of $54.5 million, the project has greatly improved the capacity of the port for handling container ships and their cargoes. By enabling the port to remain competitive in the new century, the project has done much to strengthen the mainstay of Djibouti's fragile economy.

Severely handicapped by its torrid climate and rugged topography, Djibouti has neither arable land nor mineral wealth and is classified as a least developed country. Three-quarters of the labor force work in agriculture, but productivity is so low that farming contributes only 3% of the country's food and less than 4% of its GDP. Nearly 90% of the small, Northeast African country's 22,000 km² is rocky wasteland, inhabited only by nomads whose sheep and camels subsist on scattered patches of vegetation. The remaining 80% of the population, about 530,000 people, are concentrated along the Red Sea, where living conditions are more hospitable.

With virtually no profitable agriculture and only a few small-scale industries, unemployment in Djibouti is a serious, perennial problem, compounded by rapid population growth and the presence of some 100,000 refugees and illegal immigrants. In the late 1990s, an estimated 60% of all able-bodied adult males were under-employed or jobless. Poverty was widespread and stubborn, a fact supported by the social indicators.

Per capita GDP in Djibouti was estimated in 1997 at $820 per year, a figure that concealed not only huge disparities between rural and urban incomes, but also the high wages of foreign workers. When the portion of the GDP generated by these "guest workers"was excluded, the figure dropped to $250 per capita, putting 45% of the population below the poverty line, then set at about $3 per day. While this amount seems high compared with per capita incomes in many countries south of the Sahara, in Djibouti, where the cost of living is high, it was barely adequate for survival.

Fortunately, Djibouti does possess one asset that compensates for its dearth of other natural resources: a splendidly situated natural harbor at Djibouti City, the capital. Located on the southern side of the Gulf of Tadjoura at the "crossroads of three continents," the port at Djibouti has been an important center of shipping and commercial activity since antiquity. Today, the port is the country's economic backbone and its main source of revenue.

Established as a free, autonomous port in 1981, the International Port of Djibouti (PAID) is both a regional transit port and an international transshipment and refueling center. As the port can accommodate ships with 12-meter drafts and lengths of up to 290 meters, it is possible for large ships with grain, fertilizer or other bulk goods to call direct at port, thus enabling importers to achieve cheaper rates through greater economies of scale. Transport links to Ethiopia, by rail and road, and to Somalia, by road, further enhance the port's role in trade on the Horn. In recent decades, the port has also profited greatly from its proximity to the oil fields of the Middle East.

As Djibouti's most important employer, PAID provides jobs for a large percentage of the capital city's workforce. The port and free-trade zone generate a wide variety of other employment opportunities in port-related, service sector enterprises. Often privately owned, these businesses include restaurants, hotels and finance institutions, as well as transport, storage, communications, insurance, real estate and business services firms. In recent years, the service sector has employed about 15% of the labor force, but provided some 75% of the total GDP.

Despite several previous expansion programs, by the mid-1990s, PAID was struggling to keep pace with the increasing use of containerized freight and the rapid growth in shipping accompanying globalization. Between 1997 and 1999, Ethiopia's imports and exports through the port doubled. During the same period, overall tonnage increased from 720,000 to 860,000 metric tons. Additional capacity and more efficient service were urgently needed to prevent business from drifting away to competing ports, a development that would have had a very detrimental effect on the national economy.

When the project began in late 1999, the port had 16 berths, but lacked adequate capacity and equipment to serve container ships efficiently. Only one such ship could be loaded or unloaded at a time, making long waiting times at anchor the rule. To increase container-handling capacity, two ship-to-shore gantry cranes were purchased from Shanghai Zhenhua Port Machinery Co., Ltd. Mounted on rails, these giant cranes can lift containers weighing up to 50 tons. Six rubber-tire gantry cranes, used for transferring containers to the adjacent storage area, were procured at the same time, bringing the total investment in container terminal equipment to $15 million.

Extensive civil works preceded the delivery of the gantry cranes. A new quay, 200 m long and 13.5 m wide, was built to extend the existing one to a length of 600 m. The foundation of the old quay had to be reinforced, and the water, petrol and gas lines relocated. After defective paving had been removed and new concrete rail-beds constructed, new rails were laid for the gantry cranes, the entire quay was paved, and the necessary transformers and generators were installed. Finally, the gigantic gantry cranes were off-loaded from ship to quay, an event that attracted a large amount of media attention.

The quay extension was complemented by enlarging and maximizing wharf-side storage space. The container storage area was expanded by 50,000 m² to provide space for 1,500 standard containers. This work involved creating a platform elevation of 3.5 m, constructing a concrete foundation suitable for the rubber tire gantry cranes, and paving the entire storage area with asphalt, 12 cm thick. Lighting, fire-fighting equipment and sanitation facilities were also provided.

The civil works component of the project also addressed the infrastructure needs of the port and naval management. A harbormaster's building with a total area of 3,450 m² and a naval management and administration building (340 m²) were built and equipped. In addition to the consulting and engineering services needed for the preparation and execution of the civil works, the project covered the purchase and installation of computers and other office equipment needed to streamline administration and financial management. Special programs for the management of container terminal operations were also provided, as were on-site training courses for port employees.

Now completed, after only 29 months, Phase IV has made the handling of container freight at Djibouti more efficient and reduced ship-waiting times considerably. With the new berths and cranes and the expanded container terminal capacity, three ships can now be unloaded simultaneously, thus helping the port cope with the growing volume of container freight.

By enhancing the port's competitiveness, the project has helped protect existing jobs and generate new ones. In mid-1999, the work force at the Port Authority alone increased by 120 employees. Many private sector businesses profiting from increased port traffic are also hiring more employees. This development extends not only to firms directly involved in cargo handling or other port-related services but also to businesses catering for ship crews, passengers or port personnel.

Thanks to the increase in container ship visits, PAID is now earning additional income in navigation fees for piloting, mooring and wharf-side handling as well as from freight storage and ship maintenance and repairs. By making the port more attractive for container ships, Phase IV has fortified the status of the International Port as the leading port in East Africa, a situation that benefits the whole country.

To ensure the continuity of these positive developments, Djibouti signed an agreement in May 2000 with the Dubai Port Authority (DPA), giving it the right to manage and invest in PAID for 20 years. The Government hopes the port will benefit from Dubai's experience in cargo movement and port management as well as from its advantageous relationships with international shipping concerns. DPA plans to double handling capacity and carry out other improvements designed to ensure that the International Port of Djibouti remains the most important transshipment port in Africa.

Unloading the gigantic gantry cranes from ship to wharf was an impressive sight and attracted considerable media coverage.