Port Rashid: 1990-2008
By 1990 Port Rashid needed significant investment to cope with growing cargo throughputs.
Port Rashid Container Berths 1980
Dubai Port Services
In 1971 Sheikh Rashid appointed Gray Mackenzie and Co. as Port Rashid's sole operator. Gray Macs were then part of the Inchcape Group and had operated Dubai's tug and barge operations on Dubai Creek for a number of years. Gray Macs set up Dubai Port Services to manage and operate Port Rashid as their own port, paying Sheikh Rashid a share of their profits. This arrangement was unique in the ports and shipping world in 1971. Today many ports worldwide operate on this basis. Sheikh Rashid's control began to fade when he became seriously ill. Gray Mac's contract came under Government criticism. There was resentment at a foreign entity controlling Dubai's major port. In 1984 a new contract was agreed whereby Gray Macs became responsible for Port Rashid's management and received a fee for doing so. All revenues went to the Government who controlled financial and investment decisions. Dubai Port Services closed and Port Rashid Authority came into being. Despite its name, PRA was a commercial company and not a Government Authority.
Port Rashid Container Terminal
Port Authority of Jebel Ali
Jebel Ali Port was also a Government owned facility. Sheikh Rashid appointed Sealand Shipping Company to manage and operate Jebel Ali Port on the same basis as Dubai Ports Services. PAJA was a commercial company and not a Government Authority. Jebel Ali Port had several factors working against it.
- Dubai's Merchants regarded Jebel Ali Port too far out of town and preferred their goods shipped to Port Rashid.
- Jebel Ali Port's Manager was Sealand Shipping Company, an American Shipping Line. Sealand SC was trying to attract other shipping lines to Jebel Ali Port but also competing with its prospective customers. Consequently Shipping Lines treated Jebel Ali Port's management with suspicion. Only a small number of shipping lines established their operations in Jebel Ali Port.
Investment and Change of Management
By 1990 Dubai Government faced a situation with its two ports where:
- Two ports serving Dubai were competitors chasing the same business.
- Port Rashid was an established success. Jebel Ali Port wasn't.
- Port Rashid needed substantial investment for expansion. Jebel Ali Port had underutilised land and berths.
Dubai Government resolved this situation by
- Terminating the management contracts in both port
- Establishing a new independent Government entity Dubai Ports Authority
- Dubai Ports Authority employing all the staff previously employed by Port Rashid Authority and Port Authority of Jebel Ali
- DPA managing both ports as a single port
- Making significant investments in both ports
Reaching a Limit
Continuing throughput growth meant further investment in people, plant, systems and equipment but DPA a reluctance to make further investment in Port Rashid. Insufficient storage space and limited water depth for modern ships led to a decision to limit Port Rashid's cargo throughput. Jebel Ali Port became the focus of all further development and growth. Ironically Jebel Ali Port eventually had exactly the same limitations as Port Rashid. Jebel Ali Port's design was also based on handling traditional cargo ships. Cargo storage area could not be expanded. There was water on three sides and Jebel Ali Free Zone now occupied all the remaining land. This situation necessitated reclaiming land for new container terminals.
Jebel Ali Port circa 2006
Ports and Cities
Traditionally ports were built close to cities to provide easy access and minimise transport. Containerisation brought noise and a steady stream of heavy trucks towing containers moving onto public roads. Cities no longer tolerated ports' environmental impact. New Container Terminals were built out of town and old ports reclaimed as waterside residential and business areas.
Dubai began to experience problems with the heavy truck traffic generated by Port Rashid and the inter-port container movement. This situation combined with the increasing amount of redundant land within Port Rashid caused the Government's perception of Port Rashid to change. Port Rashid was now seen as valuable waterside property capable of high value property development.
Port Rashid Container Terminal Gate 1980
End of an Era
Port Rashid formally closed in 2008 except for Cruise Ship operations. By 2008 land was being reclaimed in Port Rashid for property development. Soon people will be living in a facility that established Dubai's reputation as a trading and business centre. A significant era in Dubai's development had come to an end.
Port Rashid 2009. Shows waterside areas have already been reclaimed in preparation for property development.
