Finance requested to okay project documents related to ‘Cargo City’.

Global bid limited for a period of 20 years

According to informed sources, the Directorate General of Civil Aviation (DGCA) has addressed the Ministry of Finance to approve the project documents for the operator of the new Kuwait Air Cargo City, which are related to the design, construction, management, operation, maintenance, renovation and development of the Cargo City and the facilities necessary to provide freight handling, storage and distribution services at Kuwait International Airport, reports Al-Qabas daily. The project is due to be launched in a limited global bid for a period of 20 years due to the limited number of international companies specialized in this field. The project is considered a quantum leap in the field of improving the shipping sector, and will contribute to raising the state’s revenues.

DGCA has called on government agencies to quickly determine their needs for office spaces, the number of employees, and the type of departments that need to be located in the new Cargo City to be established, in addition to the technical requirements that those agencies need in order to conduct their business in the new Cargo City.

The sources explained that the project, which is located west of Kuwait International Airport, consists of the following phases:
1. Designing the shipping building, storage building, distribution building, logistics buildings, parking lots and offices.
2. Building facilities and equipping them with all necessary technical and technological equipment and supplies. Meeting the requirements for receiving, delivering, shipping, preserving and distributing them.
3. Financing the construction and equipment process.
4. Managing and operating the freight city with all its facilities, in coordination with the competent authorities.
5. Manage the comprehensive maintenance process for all facilities.
6. Developing the shipping city to compete with its global counterparts in terms of strategy and service.
7. Training and qualifying Kuwaiti national cadres to manage and operate the shipping city.

The sources went on to explain that the project will be offered as a limited bid between specialized companies due to the limited number of relevant international companies. The bidding period is 20 years. The international operator will study the investment opportunities at the airport and calculate the financial returns that will return to the interest of DGCA.

The investment projects within the new air cargo city include the following:
1- Maintenance and repair area.
2- The first phase, which includes the freight building, the immediate freight building, government facilities, customer offices, and car parks.
3- The second phase, which includes the railway, buildings for support services, and a multi-storey parking building.
4- The third phase of future expansion.

In this regard, the German company “Obermeier” has prepared a roadmap that is considered the basis for developing a business plan that will be integrated into the structural plan of Kuwait International Airport. With the development of the field of air freight, airports in the region must implement changes that respond to emerging trends in this field and anticipate the future needs of its partners in the field of air freight logistics.

This prompted DGCA to start a strategic planning process to review and revitalize the field of air freight in Kuwait with the aim of achieving a number of goals, including: 1. Developing and enhancing air cargo traffic within Kuwait International Airport by expanding logistical capabilities. 2. Establishing value-added and specialized logistics services. 3. Attracting and ensuring the quality of global logistics branches for multinational companies.

Obermeyer’s study indicated that in order to develop the Cargo City of Kuwait International Airport into a large and operationally effective logistics center in the Middle East and North Africa, an attractive and simplified legal environment must be provided by:
1. Building infrastructure and facilities that meet special needs.
2. Promoting a comprehensive regional shipping policy (free zone, simplified customs procedures).
3. Establishing a multimodal transport network for all modes of transport.
4. Developing an open air cargo policy in order to increase the number of flights.
5. Providing incentives to motivate regional logistics partners. With regard to the current situation, the study indicated that Kuwait International Airport handles 250,000 tons of freight and mail annually, 77 percent of which is import and 23 percent of which is export.

The annual load carried is distributed between 84 percent of the carrying capacity of commercial aircraft and 16 percent of the cargo aircraft. According to the vision and future plan of civil aviation, the air cargo city at Kuwait International Airport is one of the most important projects included in the development plan.

It will be built on a plot of three million square meters with the aim of strengthening the position of Kuwait International Airport to be among the largest logistics centers in the Middle East and North Africa. Nonetheless, in order to establish a successful logistics center, a number of steps are recommended, including:
1. Expansion of logistical capacity including cargo transit capacity, transshipment by becoming a hub for transit cargo, intermodal, port connectivity, railway stations hub for neighboring countries, and the establishment of a free trade zone.
2. Exploiting the capabilities of e-commerce, as the Middle East and North Africa region, especially the Gulf region, benefits from high spending potential.

The region is proud of its high per capita income. The penetration rates of the Internet and social media are among the best in the world, which means that the region is ripe for online business.

Source- Arab Times.

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