Expanding the capacity of the Port of Beirut

The Port of Beirut has historically played a vital role in Lebanon’s economy, as a major cargo and transit hub. However, due to the civil war and political instability, this key position has weakened over time. The situation was compounded by the COVID-19 pandemic and a major explosion in 2020.

Photo courtesy of Royal HaskoningDHV

As part of a long-term development plan to transform the Port of Beirut into a transhipment hub, the Port Authority planned to expand Basin 4 in 2015. However, the work is on hold and the basin can currently only accommodate small vessels.

A consortium led by Boskalis and Van Oord are jointly preparing the dredging works needed to restore the navigable depth of Basin 4, funded by the Dutch government via Invest International. This would allow larger vessels to berth, reducing the costs of transporting cargo to Lebanon.

An extensive cost-benefit analysis of dredging plans

The consortium commissioned Royal HaskoningDHV to assess the economic benefits and costs of the proposed dredging works. The company carried out a cost-benefit analysis (CBA) to evaluate whether restoring the navigable depth of Basin 4 would provide enough value to make the project worthwhile.

In the analysis, Royal HaskoningDHV compared the proposed project to the current situation, where Basin 4 isn’t developed, and continues to accommodate smaller vessels only. Meanwhile, the project analysis examined the potential impact of berthing larger vessels.

The company recently delivered a comprehensive report, assessing the impacts of the project. This included a thorough sensitivity analysis, to support the consortium as they continue to make plans for Basin 4 and other areas of the port.

The cost-benefit analysis also incorporated an extensive market investigation. This involved estimating transport costs for each alternative, accounting for transportation time, charter costs, fuel costs and port costs. Royal HaskoningDHV also compared likely costs at different volumes, using traffic forecasts for the port.

Ultimately, the analysis found that the benefits of dredging outweigh the investment costs, as the deeper berthing capacity will encourage higher traffic and make it easier for Lebanon to move more large shipments through its main port.