Business Profiles

Aqaba Development Corporation: Small but perfectly formed

In an almost land-locked country, any piece of coastline is extremely important. We spoke with Mohammad Al-Sakran, Executive Director for Transport and Logistics for the Aqaba Development Corporation (ADC), who have been tasked with building and maintaining Joran’s ports. In an area like Aqaba, this is no simple mission.

Formed and mandated to develop Aqaba in 2004, ADC is an entity owned by Jordan’s government, and it carries the responsibility of a vast task. As the company broke down for us, it has been instructed to develop the Aqaba Special Economic Zone (ASEZ) “through building new or expanding existing infrastructure and the required superstructure, creating business enablers for ASEZ, and managing or operating its key facilities. This will be achieved through maximizing the attraction of private sector developers and operators. ADC also has the responsibility to implement the ASEZ Master Plan in a manner that ensures integrated development and transforms Aqaba into a leading business and leisure hub on the Red Sea.”

This sounds like quite a feat already, but there’s a twist. Located right at the base of the country, Aqaba holds Jordan’s only coastline, and it’s a very small strip: 27 km out of the 96,000 km² nation. This small slither of coastline must not only support the demands from Jordan’s tourism industry and the population who live in the area, but must also supply the country with the ports it needs for travel and trade, without either demand hindering the other.

“ADC was formed to develop the ASEZ as a whole, but first and foremost, it is the ports that have been its focus. “The most important thing for Aqaba is its ports community,” Mohammad was quick to highlight when we spoke. “All of us know how important ports are for any country.” Mohammed joined ADC in 2005, soon after it was founded, and in those 14 years, the company has successfully developed a number of ports of different capacities along the coastline, including a state of the art container terminal, an industrial terminal, phosphate terminal and an LNG terminal.

The city’s original port has also been moved; originally, it was located within the city, but ADC relocated it to the south. “This is a challenge faced by cities all over the world,” Mohammad explained. “When you build a port, people start living around it, bringing along their families and businesses. But sometimes, cities can’t control everything, and it becomes a problem area producing pollution within the city. Despite Jordon’s financial limitations, in addition to many other limitations, we managed to move the port to its new location in the south coast to evacuate the original area for new real estate development and other investments. Now, we have a new environmentally friendly port-side terminal that is out of the city.”

The amount of work that has been carried out and remains to be developed in Aqaba and the ASEZ is extensive, and this carries an extensive cost. “In Jordan, we don’t have the financial capabilities to develop all of these projects in a five-six year span.” To tackle this cost, Mohammad explained, ADC adopted the Public Private Partnership (PPP) model to fund its transport and logistics projects. The first challenge in doing this was convincing local potential partners to have faith in the model, as it wasn’t commonly used within Jordan. Whilst the premise was unfamiliar to many, though, it became much easier to promote once ADC had a success it could use as a demonstration; the Aqaba Container Terminal was, as Mohammad put it, a “wild success”, developed in a PPP arrangement with one of the most established container terminals operator in the world – APM Terminals.

Another approach ADC has taken is offering collaborative incentives, including no income tax on (exports, In transit, re-sale) goods in logistics facilities; 50% reduction on export and re-export containers from ASEZ; 50% reduction on sues canal fees, and up to 40% reduction on cargo in transit.

The initial port terminals may be in place, but that is not the end of the task for ADC – not by a long shot. “I don’t think we will reach an endpoint, because it is an ongoing and evolving business.” Currently, the company is in the process of upgrading many of its resources, such as upgrading the security and safety measures at the LNG terminal and oil terminal, as well as replacing ships and port systems with more environmentally friendly alternatives. As technology continues to develop, so must ADC continually update its facilities to make sure they are providing the best that they can for Jordan, whilst remaining as safe and environmentally friendly as they can.

Security, cleanliness and sustainability are important factors for any energy facility, but for ADC, they are even more essential. “As you know, in Jordan, we don’t have the luxury of having different coasts or seasides – Aqaba is the only one we have.” Therefore, as well as catering to Jordan’s industrial needs, Aqaba must also remain an attractive tourism destination; in particular, Aqaba is known for coral diving, so its coral must be protected. On top of this, Aqaba’s residents must also be taken into account: “Aqaba is not a Greenfields area – it is a vibrant, lively city.”

These factors are not the only ones the company is juggling. ADC is not only responsible for the ports in Aqaba – it is responsible for transportation and logistics as whole industries, and that includes the logistics yards that exist behind the ports. The loading and unloading of cargo and the transportation of such is an operation too large to contain in the ports themselves, and then there is the issue of the trucks. Aqaba’s tourism-filled seaside living is highly pedestrianised, and a multitude of heavy logistics vehicles regularly driving through would quickly ruin this atmosphere. So, a truck yard system was developed, which keeps the heavy vehicles away from the city, giving them sufficient room to operate whilst preserving the attractive nature of Aqaba. This solution also controls and moderates the truck movements to Aqaba ports, which had a major impact on solving congestion at the gates of the ports.

Another large project in ADC’s current portfolio is the city’s airport, King Hussein International Airport. Developing this airport into a transit hub, the company has now secured Ryanair, EasyJet and several other regular airlines, thus evolving Aqaba’s and Jordan’s multi-platform transportation system. To further improve this, ADC is also working on the railway, looking to connect the north-south corridor of Aqaba to areas throughout Jordan. On this front, too, Mohammad feels that ADC’s work will never be over; there will always be an area that needs further development, upgrading and improving, for the increasing benefit of both this essential transportation hub and, as a result, Jordan as a whole.

“It is a huge responsibility, a huge portfolio, and this is only my department. If you look at the company as a whole, we have other departments that cater for real estate, industrial real estate, and our Empowerment Project.” The Empowerment Project in a not-for-profit operation that looks to improve the quality of life in Aqaba by providing facilities such as schools with international standards, so that no matter where in the world they came from, kids will benefit from the international education system applied. This has both improved the lifestyle of families in Aqaba and encouraged overseas companies to move with their families to the city. “Overall, it is a huge portfolio for the company, but the biggest focus from my point of view is transportation and logistics which is considered one of the main development mandates for ADC.”

Mohammed joined ADC almost 15 years ago, in a wave of recruitment that took on many young Jordanians. “It has not been what I expected when I started, that’s for sure! I did not expect to be in this position.” When he started, the company’s CEO sought to bring in young locals and empower them, which meant Mohammed was working amongst a peer group that rose up with him. “I and my colleagues were lucky to be the same age, we were like a family, and we were always challenging each other, competing to do better and deliver the best. ADC created this work atmosphere by giving us the opportunity to work in major projects, under so much pressure, with passion to work, and power to develop the city.” This empowerment of their staff saw a generation of employees rise up to be department heads who are now shaping the future of their home, with no thought to leaving the company.

After so much time in this business, having worked his way up the ranks and now holding such a position of responsibility, we asked Mohammed what advice he had for others facing a vast development project. “The key word is planning. Through our journey developing all of this, it was very important that we had the master plan. Have plans before you start implementing, and adhere the master plan. This was the most important and excellent lesson learned. Everything was considered and taken care of, and as a result we can now witness how everything works together in harmony and complements each other.”

ADC’s work may never be done, but it sounds like its team never want it to be. Aqaba will continue to evolve, creating ever-new opportunities for companies to become partners in its growth, offering an avenue in to working in one of the most secure and peaceful countries in its area of the Middle East, and an opportunity to hitch a ride of a rising star.