Gdansk invests heavily to become Eastern Europe biggest port

Gdansk has made a remarkable comeback after the difficult nineties and is now one of the richest cities of Poland but the seaport is still not satisfied. With a huge investment program of €1,8 billion Gdansk wants to become the biggest Port of Eastern Europe. 

A Dutch version of this article was published in Het Financieele Dagblad: krant-20160405-0-009-014

Maciek Kwiatkowski lets visitors always take a seat in front of the window overlooking the container terminal. ‘Then they can see how well we are doing’, says the ceo of DCT Gdansk, the operator of the container terminal, with a great smile.

At the quay the “Essen Express” has just moored. It’s one of the biggest container vessels of shipping company Hapag Lloyd. Huge cranes are hoisting the containers one by one off the ship. ‘After arrival most of the goods will be transported by road or rail to the hinterland of Poland and other Eastern European countries’ , explains Kwiatkowski.

Het schip de Essen Express in de haven van Gdansk, Foto MK

The ship Essen Express in the container terminal of Gdansk, Foto MK

Kwiatkowski can’t complain about the amount of activity in the terminal. The only worry right now is Russia. The trade in and out of Russia has collapsed since the boycott of the European Union and this was also felt by Gdansk. It was the reason why 2015 was the first year in ten with less containers being handled then the year before. But Mr. Kwiatkowski doesn’t seem to be worried. ‘Sooner or later the Russian trade will come back and then we will be right there to service it.’ For the moment the most important thing to Mr. Kwiatkowski is that DCT expands its market share in Eastern Europe. ‘And that looks good.’

During the last decade this has according to Mr. Kwiatkowski especially been felt by the Port of Hamburg. “Not long ago, Hamburg was regarded as the main port of Poland. Virtually all Polish trade with other continents used to go through the German Hanseatic city. But not anymore, now Gdansk has overtaken that role.”

The major growth catalyst was the investment between 2005 and 2007 in a new container terminal on open sea. A group of investors around the Australian Macquarie Group picked up the bill of about €200 million. The result was a deep-sea terminal that was unique to the Baltic Sea. It could handle vessels with deeper draft than any other Baltic port, and in contrast to Helsinki and Saint Petersburg Gdansk could guarantee also an ice-free port whole year round.

The start 2007 was still relatively slow. But from 2010 onward growth came in huge numbers. In 2009 the handling of containers was still below 300.000 TEU (TEU is the standard unit for a 20-foot container). In 2014 this had grown to 1,2 million TEU.

The container terminal is pretty full, Foto MK

The container terminal looks pretty full, Foto MK

Direct reason for this acceleration of growth was the decision from shipping company Maersk to uphold a regular service between Gdansk and Asia. Now Gdansk is the biggest Baltic port and the gap with the much bigger North Sea ports such as Antwerpen, Rotterdam, Le Havre and Hamburg decreased.

But Kwiatkowski is not satisfied yet. The man, who was a captain in his younger years and learned how to manage new container ports in Australia, says it’s his ambition to make Gdansk the most important port of Central and Eastern Europe. So not only for Poland, but also Russia, the Czech Republic, the Baltics, Slovakia, Hungary, Belarus and Ukraine.

To achieve this goal DCT is investing heavily. This year the new terminal “T2”is taken into use. That investment of € 195 million will double the port capacity from 1,5 Million TEU to 3 million TEU, and Mr. Kwiatkowski expects to reach that level somewhere around 2020. “And when we do that, we’ll have the plans for T3 and T4 ready.”

It sounds like a warning in the direction of Hamburg, the German port that is still considered the most important Eastern European port with a total volume of 8.8 million TEU in 2015.

But can DCT really deliver? A new terminal by itself brings nothing. To compete with cities like Hamburg, Bremen and Rotterdam ‘all’ port infrastructure should be good. And the City of Gdansk is working on that.

‘Between 2015 and 2020 several investors, both public and private, are investing a total sum of € 1.8 billion in port facilities and infrastructure,’ says Michal Stupak of the Port of Gdansk Authority. One of such investments is the new tunnel that is being built under the Wisla River. The tunnel will open in April or May and has cost approximately € 210 million. With a length of 1.5 km and a depth of 35 meters the tunnel has some resemblance to the Sluiskil tunnel in Zeeland, says one of the constructors of the tunnel. According to him trucks will save at least 30 minutes by driving around the city instead of having to go right through.

The new tunnel under the Wisla River, Foto MK

The new tunnel under the Wisla River, Foto MK

Another project which is about to be finished is a new oil terminal of € 197 million and a storing capacity of 375.000 cubic meters in the first stage and another 325.000 cubic metres in the second which is planned to be ready by 2018. Furthermore the entry to the harbour of Gdansk will be broadened, there is a new terminal for bulk goods being built, and also a new train bridge over the Wisla.

And finally there is a project of which both Kwiatkowski and Stupak have great hopes on: the development of the biggest projected industrial park in Poland with the targeted area of 500 thousand square meters (of which one tenth is already operational) just outside of the container port, with an investment sum of nearly € 300 million. Stupak: ‘If you look at the port you can see here quite spacious areas ready for new investments which is rather unique in the ports which normally have very limited area for development. We expect that within a few years that area will be full of warehouses as we see a great interest among the logistics companies in placing here their potential, especially among the ones connected with FMCG (fast moving consumer goods)’

One of the companies that has settled nerby the business park is Pago, a company for the storage of frozen products. In the icy hall – with temperatures below -20 degrees Celsius – manager Adam Majkowski says he sees Gdansk as the perfect springboard to Asia. “If all goes well, and the trade with China is growing, the next step for us will be a cold storage warehouse in China, to perfect the service to our clients.”

For the inhabitants of Gdansk it will probably sound like music to their ears. The people of Gdansk city have gone through some rough times since the end of communism in 1989. In the 1990’s nearly 20.000 jobs were lost in the famous shipyards of Gdansk. Today only a few thousand people work in the shipyards.

In the neighbouring city of Gdynia –about 10 Kilometres to the North – the situation was not much better. There too, thousands of people lost their job in the shipbuilding industry. The economic malaise was huge and caused high unemployment in the whole Pomeranian region of which Gdansk is the capital. At the beginning of this century unemployment was more than 20% in the region with about 2.2 million inhabitants.

The last ten years this has changed completely. Unemployment has come down to below 10%. It were the investments in the Port that were a main cause for this, as well as an increase in tourism.

According to Mr. Stupak more than 40,000 people have a job thanks to the port. Therefore you can say that the suffering of the 1990’s is long forgotten.

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