Manila, Philippines (4E) – Manila-based port operator ICTSI announced Friday that it has pulled out its cargohandling business in Syria because of the civil war in the Arab country. ICTSI cited force majeure as the reason for the pullout.
“The Syrian civil war is escalating, exposing everyone, both combatants and civilians, to increasing threats of death and destruction every day,” ICTSI said in a press release.
The global port operator, through its subsidiary Tartous International Container Terminal (TICT), handles containerized shipments at the Port of Tartous. It already pulled out its Filipino employees from the port.
The pullout will cost ICTSI $1.2 million in terms of write-off of the TICT contract and assets. But it will save $4 million yearly in terms of port fees and cash operating expenses from the termination of the contract and write-off.
Since 2011, ICTSI had been operating under an extremely difficult environment in Syria. Economic and business conditions in Syria have been volatile as a result of trade sanctions by the European Union and the United States, and the closing for trade of the Syrian-Iraqi border.
The Port of Tartous in the Mediterranean coast of Syria should have been the transit point for transshipment trade to and from Iraq.
The current crisis negatively impacted volume growth and forecasts. At the time ICTSI submitted its bid to provide container service at the said port in 2005, Syria’s container market was growing and on track as projected. However, volumes started to plummet by four percent in 2010, and 14 percent by end 2011.
“The drop has set the Syrian container market back five to six years at 2006-2007 levels,” ICTSI said.
TICT has also encountered policy setbacks from the Syrian government. There were delays in government’s deliverables under the contract. TICT and Tartous Port General Company, the local partner of ICTSI, signed an Investment agreement in March 2007 for the operation and development of the container terminal.