1. Development of the port of Poti by strategic investor in the post-crisis world by Andrii Kuzmenko Poti Sea Port Corp. – an APM Terminals company

2. Gateway to The Caucasus and Central Asia

3. Statistics 3 Cargo composition (2011) ‘000 tons

4. 4 ● Water area – 65.34 ha; ● Length of approach channel – 1.6 km; ● Length of breakwater – 1.8 km; ● Operating area – 30.0 ha; ● Present capacity – 9 million ton; ● After CAPEX capacity – 16-19 million ton; ● Total length of berth’s – 2.9 km; ● Total length of railway - 17.0 km; ● Direct access to hinterland ways; ● 100 hectare of port development area. ● 250 ha of free industrial zone nearby. ● Abundant and skilled workforce ● Water area – 65.34 ha; ● Length of approach channel – 1.6 km; ● Length of breakwater – 1.8 km; ● Operating area – 30.0 ha; ● Present capacity – 9 million ton; ● After CAPEX capacity – 16-19 million ton; ● Total length of berth’s – 2.9 km; ● Total length of railway - 17.0 km; ● Direct access to hinterland ways; ● 100 hectare of port development area. ● 250 ha of free industrial zone nearby. ● Abundant and skilled workforce APM Terminals acquired 80% of Poti Sea Port Corporation in May 2011

5. No depth inside (6-10 m) or on approach (12,5) No turning circle inside (max LOA 160 m) No long berths (150-250 m max) No land beyond the quaywall (60-150 m max) Present Poti: first look Capacity – 8-9 mio mt PA with little reserves

6. Modern port requirements Regional portPresent PotiInternational port Turning circle diameter, m550200700 LOA at berths, m230-270170-200310-330 Depth at berth, m13,56,0-12,516,0 Depth at approach channel, m14,512,5?17,0 Land beyond quaywall, m250-300 m60-150 m500 m Rail connectionupto 30 mio25 mio?upto 40-50 mio Road connectionsimplifiedrestrictedunrestricted Conclusions: 1.Within current boundaries, Poti risks to stagnate. 2. However, thanks to the rail capacity, Poti does have future 3. To remain the major regional port, complete port overhaul is needed, creating at least panamax capacity on the nautical and land-side.

7. Guesstimate of hinterland traffic forecast after 2020 Major commoditiesVolume, mio mtRelevant capacityNotes Crude oil9,712,0Export Oil products1,52,0In and out Containers5,8 (1 mio TEU)7,0 (1,2 mio)Domestic and transit Non-food bulk4,25,0Coal, ore, cement, fertilizers Food bulk2,53,0Grain, sugar, etc Gencargo2,83,5Including reefer cargo Rolling stock0,60,8Trucks, wagons and cars TOTAL27,133,3 Conclusions: 1.Above volumes do justify development of specialized terminals. 2. Specialized terminals will allow for highest efficiency within limited area thus reducing the investments and payback period.

8. What would it take to handle? Liquid bulkBulkBulk food GC+roro+ cont Cont.Cold store Fertilizers Berth #D1D2D3D4D5D61012 Expected vessel DW, mt 150 00080 00060 000- 80 000 50 000- 60 000 60 00080 0001560-70 Berth length, m300 (see 1) 300 (see 2) 280250 (see 3) 280200270 Capacity per berth, mio mt 8,04,52,323,25,00,21,5 Estimated terminal area, sq.ms (see 4) 130 000170 000153 000112 00095 00016 800 (see 6) 52 100 Desirable terminal area sq.ms (see 5) 155 000200 000159 000134 000135 200 (see 7) 10 00082 000 Required installed capacity – 26,7 mio mt

9. Ideal Poti: how could it look New approach channel -17 m +2000 m New terminals ICT Breakwater extension +500 m -16 m dredging New breakwater + 360 m -13,5 m dredging Old port area ICT external access road

10. Berth D1 Oil DW 150 000 300x50x16 Berth D3 Oil/Bulk DW 80 000 270x46x13 Berth D6 Containers DW 80 000 270x32x13 Cold store 0,2 mio 17 000 m2 Berth 12 Fertilizers DW 70 000 210x32x12,5 Fertilizers 1,5 mio 52 000 m2 Berth D2 Oil/Bulk DW 80 000 270x46x13 Berth D4 Food bulk DW 60 000 200x32x13 Berth D5 Containers/ GC/ro-ro DW 80 000 230x46x13 Containers/ GC/ro-ro 3,2 mio 112 000 m2 Bulk 2,3 mio 170 000 m2 Liquid bulk 12,5 mio 130 000 m2 Containers 5,0 mio 95 000 m2 325 m quaywall 13,5 m 805 m quaywall 13,5 m D 3/4 212 m quaywall 13,5 m 980 m quaywall 13,5 m Food bulk 2,0 mio 15 300 m2 Poti NG look: berths & terminals

11. Poti NG: pros and cons of the proposed layout ProsCons Suggests minimum possible terminals/berth construction for a given cargo base Subject to expansion to the non-available areas Keeps minimal internal basin areaRequires rehabilitation of the breakwater to allow 16 m dredging within Focuses deep-water dredging next to port entrance, thus minimizing the cost Seemingly tight on land available for terminals to reach required capacities, will require a deeper study and further prioritization/optimization of terminals borders and available land. Wherever possible allows for overlaps of the vessels on adjacent berths Some old berths may be out of operations due to navigational or operational constraints (lack of storage space) Utilizes available basin and berths layout to the maximum possible Calls for major investments commitment Keeps old harbor for coastal trade, not wasting money on its rehab as no storage space available anyway Has certain extra reserves of old berths to assist neighboring terminals or to handle some opportunity cargo Utilizes all land available (main bottleneck) Keeps open bulk handling away of residential areas Utilizes ICT resources for container terminal Significant investments are required

12. Poti NG: how much could it cost? Liquid bulkBulkBulk food GC+roro +cont Cont.IdleGEO navy Total Berth #D1D2D3D4D5D6D0D3/4 Berth length, m300 280250280185270 Est. quaywall, mio USD (60 000 USD/r.m.) 1,2 (piles) 18 16,815,016,811,116,2113,1 Est. reclamation, mio m3 00,810,900000 Est. reclamation, mio USD (8 USD/m3) 06,5 (0,8 mio m3) 7,2 (0,9 mio m3) 0000013,7 Est. dredging volume, mio m3 1,5 (-16m) 2,5 (-13,5 m) Est. dredging, mio USD (8 USD/m3) 12,02032,0 Breakwater extension, mio USD (85 000 USD/r.m.) 73,1 (860 m total) 73,1 Approach channel, mio USD (8 USD/m3) 11,2 (1,4 mio m3: 160 m wide with 2x42 ms slopes ) 11,2 Est. total for marine infrastructure, mio USD 243,1 Total new quay wall: 2165 m. Total dredging: 3,7 mio m3. Total reclamation: 1,7 mio cu.ms. Is it feasible?

13. While catering for: 1. Bigger ships 2. Bigger/on-dock CY. 3. Good productivity 4. Blocktrain container service Something more realistic is required

14. Realistic approach: berth 12 and ICT

15. 15 Construction starts in 2013; Construction to be completed: end of 2014; Planned length – 285 m; Construction starts in 2013; Construction to be completed: end of 2014; Planned length – 285 m; Poti: realistic approach #1 Reconstruction of berth 12 Planned depth – 13.4 m; 3 X LHC 550 LIEBHERR harbor cranes; Planned depth – 13.4 m; 3 X LHC 550 LIEBHERR harbor cranes;

16. 16 Construction starts in 2013; Construction to be completed: end of 2014; Planned length – 270 m; Planned depth – 12.5 m; 3xMHC Construction starts in 2013; Construction to be completed: end of 2014; Planned length – 270 m; Planned depth – 12.5 m; 3xMHC Poti: realistic approach #2 Reconstruction of berth 12

17. 17 Poti: nautical considerations

18. 18 Poti: nautical considerations

19. 19 ICT parameters ● Distance – 1,7 km ● Available square - 10 ha; ● Expansion in 2013 – 9 ha; ● Bonded road ● Public road; ● Rail link for full train; ● Direct access to hinterland ways; ● 100 ha of development area. ICT parameters ● Distance – 1,7 km ● Available square - 10 ha; ● Expansion in 2013 – 9 ha; ● Bonded road ● Public road; ● Rail link for full train; ● Direct access to hinterland ways; ● 100 ha of development area. Poti: realistic approach Expansion and connection of ICT

20. 20 To be completed in March 2014; Planned area – 10.37 ha; New rail line – 975m; Customs road – 1688.2 m Public road – 1700 m Parking Area – 5000 m² Full train handling To be completed in March 2014; Planned area – 10.37 ha; New rail line – 975m; Customs road – 1688.2 m Public road – 1700 m Parking Area – 5000 m² Full train handling Background 1. Poti had never had a proper container yard due to lack of storage space in the port 2. That led to the usage of the external off-docks with negative effect on traffic and safety 3. Now 12 ha of container yard will be added which is equal to the 40% of the whole existing port area (29.7 ha) 4. Equipped with modern machinery it will ensure safe and efficient operation 5. New bonded road for port transport, public road and rail connection will be built. Background 1. Poti had never had a proper container yard due to lack of storage space in the port 2. That led to the usage of the external off-docks with negative effect on traffic and safety 3. Now 12 ha of container yard will be added which is equal to the 40% of the whole existing port area (29.7 ha) 4. Equipped with modern machinery it will ensure safe and efficient operation 5. New bonded road for port transport, public road and rail connection will be built. Poti: realistic approach Expansion and connection of ICT

21. 21 Poti: realistic approach ICT and future berth compatibility

22. Realistic approach: new gate, berth 15, new cranes, reefer racks

23. Berth 14 Multipurpose terminal 23 ● Length – 253 m; ● Depth – 8.4 m; ● Storage area – 13 200 sq. m; ● Equipment – 2 LHM (100 ton each); ● Handling capacity – 250 000 TEU/year; ● Length – 253 m; ● Depth – 8.4 m; ● Storage area – 13 200 sq. m; ● Equipment – 2 LHM (100 ton each); ● Handling capacity – 250 000 TEU/year;

24. Berth 7 Container terminal 24 ● Berth 7; ● Length – 221 m; ● Depth – 8.2 m; ● Storage area – 16 300 sq. m; ● Equipment – 3 portal crane (40 ton each); ● Handling capacity – 200 000 TEU/year; ● Berth 7; ● Length – 221 m; ● Depth – 8.2 m; ● Storage area – 16 300 sq. m; ● Equipment – 3 portal crane (40 ton each); ● Handling capacity – 200 000 TEU/year;

25. Inland Container Terminal (ICT) 25 ● Total area – 8.97 ha; ● Car parking – 654 slots (15 500 sq.m); ● Stripping area – 240 TEU (12 900 sq.m); ● Empty storage – 1700 TEU (5 high, 18 880 sq.m); ● Full storage – 432 TEU (3 high, 15 630 sq.m); ● Total area – 8.97 ha; ● Car parking – 654 slots (15 500 sq.m); ● Stripping area – 240 TEU (12 900 sq.m); ● Empty storage – 1700 TEU (5 high, 18 880 sq.m); ● Full storage – 432 TEU (3 high, 15 630 sq.m);

26. Main points: 1.Complete overhaul of the old port requires enormous investments 2.Commercial reality does not support reasonable payback 3.Nevertheless, port’s key problems must be attended 4.Thus focused investments and improvements are required 5.All of above shall be based on the regional growth picture

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