Optimising Port Productivity Investments in Ports Gísli Gíslason Port 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.

Main harbours in Iceland Ísafjörður Akureyri Snæfellsbær Grundarfjörður Fjarðabyggð Hornafjörður Faxaports Hafnarfjörður Total number of harbours in Iceland 43. Total income 27.7 m Euros Assoiated Icelandic Ports 50% Annual investment about 14.0 m. Euros State funding about 6.0 m Euros Helguvík Grindavík Vestmannaeyjar

Grundartangi Borgarnes Reykjavík Akranes Owners: 5 municipalities. Reykjavík ownes 75%. Specialisation of individual ports. Areal view – Associated Icelandic Ports

Associated Icelandic Ports Annual handling of 5 million tonnes. Containers 2008: 270.000 TEU Fish 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. Marine catches 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

The Old Harbour in Reykjavík Brought in to use in 1917 Main 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

Main harbour projects in Iceland Húsavík - Grundartangi – aluminium and ferrosilicon factories Fjarðabyggð Aluminium smelter Sundahöfn – Reykjavík – cruise ships. Hafnarfjörður – aluminium smelter Total production capacity in aluminium 791.000 tonnes. Export possibilities: Water Oil Northern Sea Route Helguvík – aluminium smelter Bakkafjara - ferry

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.

Borgarnes Akranes Grundartangi Old harbour Sundahöfn Thank you.