Global Ports Holding has been awarded Dubrovnik Gruz Port tender…
Global Ports Holding (“GPH”) had submitted the pre-qualification application for the Dubrovnik Gruz Port tender through its Croatian subsidiary, Dubrovnik International Cruise Port Investment d.o.o.(DICPI), in partnership with French based BOUYGUES BATIMENT INTERNATIONAL (BBI) in December 2014 through a consortium, where GPH had 75% and BBI has 25% stake; and on February 02, 2015, GPH had announced that its pre-qualification application was the only one to be approved for the tender. As the single pre-qualified bidder, GPH, together with its partner, submitted its bid for the tender to Dubrovnik Port Authority on September 11, 2015; and is now pleased to announce that it has been awarded the Dubrovnik Gruz Port tender. The closing is subject to a number of procedural conditions precedent, including the signing of the Concession Agreement.
The Dubrovnik Gruz Port project comprises the construction and 40 year operating rights of a cruise terminal, shopping center, multi-storey parking lot, and a garage in the city of Dubrovnik, one of the most prominent tourist destinations in the Mediterranean. In addition to taking over the cruise operations and erecting a new cruise terminal; GPH will build and operate a shopping center in the concession area as well as a number of commercial spaces inside the terminal building and generate revenues from commercial, shopping and business premises. The total surface area subject to the concession is 28,000m2, with corresponding total length at 845m. The construction is expected to start in 2016, end by the end of 2018; and the construction cost is expected to be c.Eur60mn. GPH is considering to finance up to 70% of investment works through a consortium of development and commercial banks.
Dubrovnik Gruz Port is located c.3km away from the Old Town, which is a UNESCO World Heritage Site and a popular tourist destination in the southern Croatia. Considered as a Marquee Port (a must-see port), the Gruz Port is the 10th largest in the world and 3rd largest in the Mediterranean in terms of cruise transit passengers, with an annual passenger number of c.1 million. Furthermore, the ongoing efforts to increase capacity of Cilipi (Dubrovnik) Airport, along with the planned direct highway connection to Dubrovnik should support the increase in the number of cruise passengers.
Dubrovnik region is one of the most outstanding tourist destinations in the Mediterranean, hosting in excess of 5m overnight stays annually, in addition to cruise passengers and daily tourists and has a relatively underdeveloped retail market, representing a considerable upside potential in the retail business. GPH aims to capitalize on the underpenetrated retail market in Dubrovnik and lack of direct competition, through the shopping mall with c.15,000m2 leasable area, which will be built in the concession area. Saygin Narin, the CEO of GPH pointed out “Through Gruz Port, we are intending to form a similar business model to that of Ege Ports on a larger scale by integrating cruise / shopping complex. We are aiming to achieve a higher per Pax rental income at the Gruz Port, compared to Ege Ports’ Eur5.5 per Pax. The Gruz Port is located in the city center, and will cater to tourists and cruise passengers visiting the city, as well as locals. Our goal is to create a new attraction center in Dubrovnik other than Old Town, while reducing the congestion of Old Town.”
The Gruz Port is an important port in Europe, not only in transit passengers, but also in higher revenue turnaround calls, which have been increasing exponentially for the last few years. Accordingly, the new terminal building to be constructed will have the capacity to accommodate 5,000 turnaround passengers at once, as well as baggage storage facility. The Gruz Port is estimated to generate c.Eur10mn by 2018, contributing to GPH’s consolidated financials.
Commenting on the tender, Arpak Demircan-the Deputy CEO stated; “Addition of the Gruz Port to the portfolio will further boost our leading position in the Mediterranean Cruise Port Market. Through the ports that we are currently operating and have signed binding agreements for, we expect our total passenger number to reach c.5mn by 2015 year-end, which corresponds to a notable c.19% market share in the Mediterranean”.