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The impact of reports in the previous quarter that the UK has placed sanctions on Irans shipping line - the Islamic Republic of Iran Shipping Line (IRISL) - and that caches of weapons on ships originating from Iran had been seized by both Israeli and US forces in the last few months of 2009 have had a predictably negative impact upon the Iranian maritime sector.
Foreign companies have been distancing themselves from involvement in the Iranian port and shipping markets. In January 2010, following Israeli diplomatic pressure, the German supply chain logistics consultancy Hamburg Port Consulting (HPC) pulled out of a contract to renovate the Iranian port of Bandar Abbas.
A contract between HPC and the Bandar Abbas port operator Tidewater Company had been agreed on January 9 2010, according to the Fars News Agency. According to ourresearch, HPC was likely to have worked on the second phase of the second container terminal at the Shahid Rajaee port complex, which is due online in 2010, and is to boost capacity at the facility to 3.5mn 20-foot equivalent units (TEUs). The Fars News Agency reports Tidewater Companys Managing Director Abdolhamid Malahzadeh as stating that HPC was set to replace the Singaporean firm Overseas Port Management (OPM) as the ports manager, as OPMs contract was coming to an end.
The contracts cancellation is bad news for the development of the port of Bandar Abbas. The port is in southern Iran and handles 90% of the countrys container throughput. The port is operated by Tidewater, but a separate concession manages the Sharhid Rajaie port. We fear that the planned second phase of development of the ports second container terminal could now be delayed after HPC pulled out of the contract. We also warn that the episode highlights that the Iranian ports pool of potential contractors is limited, as Israel has already shown that it will intervene and use its diplomatic influence where it can to hamper the development of a port that it feels plays a role in Irans illegal weapon exports.
Another example of foreign companies distancing themselves from operations in Irans shipping sector also came to light over the quarter with the French container line CMA CGM going out of its way to put distance between itself and the claims from Iranian newspaper, the Tehran Times, that the companys vessel Simba pulling into the Iranian port of Bushehr was the start of significant operational activity by CMA CGM in Bushehr. The French container line denied it had struck a deal with the Iranians and declared that the berthing of the Simba at Bushehr was exceptional and increased activity at the port was not planned.
In the Q210 Iran shipping report, we note that the Iranian port of Bandar Abbas escaped the affects of the economic downturn, which has sent throughput at a number of global ports tumbling. The port managed to increase its container throughput and further growth is forecast in 2010 and for the rest of the mid term. In the report we do, however, investigate the risks that may affect our forecasts as the international community continues to debate further sanctions on Iran, which will in our opinion cause downside risks to our throughput predictions.
The report also contains an in-depth analysis of Irans main port, the port of Bandar. We offer an overview of the ports infrastructure and consider whether it will be able to cope with cargo growth or whether congestion could become an issue. The ports expansion and development plans are also reviewed, along with the facilitys links to the rest of the countrys freight transport. The Q210 Iran Shipping Report contains detailed company overviews of the top 11 global container lines. Our shipping desk has prepared an analysis of these companies varying downturn strategies, and we offer our views and predictions on what 2010 holds for these lines.
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