At present, for example, Melilla Port imports around 800,000 tonnes of cargo annually, of which 90% originates in mainland Spain. Around 60 of this is then sent across the border into Morocco, but without having to pay onerous import taxes faced by European countries. This effective free zone status is to be undermined as from 2010 thanks to a free trade agreement signed between Morocco and the European Union.

José Luis Almazén, Melilla port director, acknowledges that, from that moment, few companies in Europe currently making use of Melilla to ship goods to Morocco would continue to do so. Given that the greater part of the cargo currently being handled in the enclave would henceforth be shipped direct to Moroccan ports, Melilla clearly has to seek alternatives.

Consultant Arup has therefore been appointed to undertake a feasibility study based around a project to reclaim 510,000 sq m of land from the sea, of which 400,000 sq m would be developed for container handling. The port authority has already committed itself to investment of €70m ($101.8m) towards the construction of the 2,600 metre outer breakwater, but the balance of the €300m ($436.1m) total cost will have to be met by private sector investors, who will be offered concession periods of up to 35 years in which to recover this.

At present, it is not clear whether one or up to possibly three separate concessions will be offered. This is because the reclaimed area will have individual quays of 500 metres, 900 metres and 1,030 metres respectively. Available draught will vary between 14 metres and 18 metres, although could be dredged up to 20 metres should this be viewed as being commercially advantageous. Overall capacity at the site will be 1.2m teu, a considerable upgrade over today’s more modest throughput of 22,000 teu.

Significantly, some of the new area will be made available for industry looking to relocate from the surrounding city into the port itself. Priority will be given to those industries considered “at risk” once tariff barriers between the EU and Morocco disappear in 2010. Two of these will be the Endesa power station and the Shell production plant.

A third objective of the master plan is to attract new industry to the port, which will make it possible for it to export goods directly into the EU without having to pay duty or without there being any capacity problems within the port itself.

With the Arup study expected to show that a financial case for the new land to be reclaimed can be made, tenders for the work are expected to be issued later this year, with work itself expected to begin at the end of the year. Should everything go according to plan, this will be completed within three years, allowing the first concessionaires to commence operations in 2012.

Potentially, throughput levels at the port could soon rival those of Spanish Mediterranean ports such as Málaga, where transhipment container traffic has replaced a former hydro-carbon-based traffic business. However, Almazán also believes that Melilla, which is a scant 50 miles from the Algerian border, could also attract significant amounts of containers for its neighbour, where many ports lack either deep draught or quayside gantry cranes.

The case of Ceuta is somewhat distinct from that of Melilla. Situated just 15km from Tangiers and just across the Straits of Gibraltar from Algeciras, it would also like to develop its container business to hub status. It is already Spain’s second largest passenger port, with substantial ro-ro connections to the mainland. More intriguingly, it is the Mediterranean’s third largest bunkering port, which gives it considerable pulling power.

The port authority has already completed an initial westward expansion project, consisting of 152,000 sq m wrestled back from the sea. In all, 60,000 sq m is to be awarded as a concession and the rest of the land used for warehousing, container stacking and logistics activities.

A second phase will see this area expanded to 480,000 sq m, capable of handling up to 8m tonnes of traffic per annum. A 655-metre quay with alongside water depth of 20 metres could prove highly tempting for movers and shakers in the container handling industry.

Crucially, while Algeciras is currently adding major new container handling capacity through infill work, no budgetary allocation for the additional expansion at Ceuta has yet been forthcoming. Effectively, the authorities appear to be waiting to see how much new traffic Hanjin attracts to its new Isla Verde transhipment hub. Furthermore, Spanish authorities are clearly very worried indeed by developments at Tanger-Med, which could potentially strip from Algeciras much of its existing traffic.