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 Ports, Airport, Logistics and Transportation for the Aqaba Development Corporation (ADC), who have been tasked with building and maintaining Jordan’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 maximising 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 89,000 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 the ports,” Mohammad was quick to highlight when we spoke. “All of us know how important ports are for every 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 container terminal, an industrial 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 coastline. “This is a challenge faced by cities all over the world,” Mohammad explained. “When you build a port, people start living beside it, bringing their homes and business. Then, sometimes, cities find they can’t control everything, and it becomes a problem area producing pollution within the city. Despite Jordan’s financial limitations and the other limitations we’ve had, we managed to move the port to a new area and to evacuate the original area for new real estate and other development. Now, we have a new port-side terminal that is out of the city and very environmentally friendly.”

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 do 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 trust in the model, as it isn’t commonly used within Jordan. Whilst the premise was unfamiliar to many, 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 operators in the world – APM Terminals.

Another approach ADC has taken is offering collaborative incentives. For example, Aqaba is extremely close to Egypt – on a map, they look only a stone’s throw away from each other. Therefore, it was natural for them to work with, not to promote the port’s construction, but its use. Recognising this, ADC offered Egypt a series of incentives if they chose to use the port, including a reduction on sewage canal fees. Similar such incentives were used to promote a lot of the ports’ activities when they first went into operation, as well as to solicit companies who were looking to bring work to Aqaba.

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 issue.” 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, Aqaba is not only ports. 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 city with a population.”

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 vehicles away from the city, giving them sufficient room to operate whilst preserving the attractive nature of Aqaba.

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 done; with fingers in so many pies, there will always be an area that needs further development, updating 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 is 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 someone lived before moving to work there, they will be happy with the system educating their children. This both improves the lifestyle of families in the area, and further incentivises overseas companies to move to the city. “Overall, it’s a huge portfolio for the company, but the biggest focus from my point of view is the transportation and logistics, because that is Aqaba – it is the development that we are mandated to do.”

Mohammed joined ADC almost 15 years ago, in a wave of recruitment that took on many young Jordanites. “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 COs sought to bring in young locals and empower them, which meant Mohammed was working amongst a peer group that rose up with him. “Me and my colleagues, we were lucky to be the same age, so we’re like friends, and we were always challenging each other to see who would be doing better than the others. ADC created all of this by giving us the pressure of work, the passion to work, and the power to develop the city and have responsibility over this place.” 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. “It’s an inspiring atmosphere. I’ve been working for ADC for the last 15 years, as have my colleagues, so we’re like a family.”

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 respect the master plan. This was the most important and excellent lesson learned. Everything was considered and taken care of, and now, we are very proud that this area, the contractors etc. all work together in harmony.”

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 with a rising star.