Optimising Port ProductivityInvestments in Ports

Gísli GíslasonPort Director

Associated Icelandic Ports

Economic tubulance

Economic crunch experienced in many parts of the world.Diminished interest to invest in port installations.Strong infrastructure in transport never more important than in difficult times.Long term vision.

• Icelandic harbours young compared to ports in Europe.

• Contract with the king of Norway in 1262 – Insufficient transport resulted in loss of independance.

• First permanent harbour installations in Iceland completed some 100 years ago.

• Construction of the Old Harbour in Reykjavík began in 1913.

Harbours in Iceland

• Harbours play key role in Iceland as the nation as icelanders rely on marine catches and import and export by sea.

• Now a more clear cut difference between fishing, transport and industrial harbours.

• Ports mainly owned by municipalities.

• Financial support by the state.

Ísafjörður

SnæfellsbærGrundarfjörður

FaxaportsHafnarfjörður

HelguvíkGrindavík

FjarðabyggðHornafjörður

Vestmannaeyjar

Akureyri

Main harbours in Iceland

Total number of harbours in Iceland 43.Total income 27.7 m EurosAssoiated Icelandic Ports 50%Annual investment about 14.0 m. EurosState funding about 6.0 m Euros

Borgarnes

Akranes

Grundartangi

Reykjavík

Areal view – Associated Icelandic Ports

Owners: 5 municipalities.Reykjavík ownes 75%.Specialisation of individual ports.

Associated Icelandic Ports

Marinecatches 2001 2002 2003 2004 2005 2006 2007 2008

Reykjavík 83.415 98.938 83.322 83.959 94.392 88.168 102.069 99.193

Akranes 139.653 151.948 135.865 129.228 47.958 41.220 61.205 27.574

Tonn 223.068 250.886 219.187 213.187 142.350 129.388 163.274 126.767

2005 2006 2007 20081,2001,3001,4001,5001,600

1,4161,336

1,407

1,528

Ship arrivals > 100 brt.

Annual handling of 5 million tonnes.Containers 2008: 270.000 TEUFish 127.000 tonns.Industrial cargo 1.3 million tonnes.Landlord port –that ownes 1000 hectars of land.85 cuise ship calls and increasing.60.000 passangers.

The Old Harbour in Reykjavík

Brought in to use in 1917Main import and export harbour in Iceland for 50 years.Fishing and sevice port.Investment in a concert and conference hall.Oil terminal.Different land use development.

Sundahöfn – cargo harbour• Sundahöfn – containers and cruise

ships.• 190 hectares• Main import and export harbour in

Iceland.• 250.000 TEU• On going project to maximise land use.

Grundartangi – industrial harbour• Grundartangi area 473.3 he.• Industrial site 141,9 he.• Key site for industrial

development in the capital area.• Various investment possibilities.

Harbour of Akranes• Fishing port supporting

dynamic fresh fish market. Fresh fish auction facilities projected in harbour area. New fishmarket house.

• Pelagic species: Important in this location. Groundfish/Demersal species: About14.000 tonnes.

• Smaler scale freight transport already handled in this port (Cement, fertilizers etc.)

Future landfills

Hafnarfjörður – aluminium smelter

Grundartangi – aluminium and ferrosilicon factories

Helguvík – aluminium smelter

FjarðabyggðAluminium smelter

Bakkafjara - ferry

Sundahöfn – Reykjavík – cruise ships.

Main harbour projects in Iceland

Total production capacity in aluminium 791.000 tonnes.Export possibilities:• Water• Oil

Northern Sea Route

Húsavík -

Hydro- and geothermal power• Investments in ports in Iceland have

and will be connected with investment in hydro – and geothermal power stations.

• Environmental considerations.• Utilization of resources will affect

investments in port installations.• Energy – production - transport.

What makes your port attractive to outside investors?

• Traditional port installations.• Unrelated structures – such as

residential areas.• What very clearly makes a port

attractive to investors may be presented as follows. – Good and safe mooring possibilities.– Good backland area and an area for

long time development. – Safe and quick service when loading

and offloading goods. – Secure and speedy communications

on land to and from the port area. – Closeness to the market.– Closeness to safe power station

structures.– Economic growth.

• Associated Icelandic Ports offer a total pier lengt of 8.3 km.

• Water depth from 9 – 14 metres.• Backland area – 250 hectares of unused

land.• Short notice planning away from residential

areas.• Speed in loading and offloading vessels.• Accessability and road connections.• Secure access to sources of energy.

Investing in port infrastructure and meeting investors´expectations.

• Two kinds of investment in Icelandic ports:– Piers, sites, streets abd

backland areas.– Company investment in

buildings, wearhouses and machinery.

• New situation after the economic collapse.

• A very low rate of exchange in the Icelandic krona arouses interest from foreign investors.

• Good experience in port centered activities.

• Safe and secure facilities.

Availability of private equity• Considerable change in the last

few months with equity not beeing readily available.

• A small stock market in Iceland.• Economic life based on excessive

foreign loan capital.• Strong domestic pension funds.• Icelandic ports owned by local

municipalities.• Private ports not a feasible

option in Iceland.• Stevedoring in the hands of the

shipping companies.• Investors hesitant.• Harbour investments more

interesting than other. Investments.

Conclusion• Despite international

recession harbour areas will continue to be of interest to investors.

• Port area will continue to be the most valuable city areas.

• With world economy improving there will be ample opportunities.

• Port areas are at the heart of economic progress.

Thank you.

AkranesGrundartangi

Borgarnes

Old harbour

Sundahöfn