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Hamburg Expects Court to Approve Dredging After Years of Delay

July 14 (Bloomberg) -- Hamburg expects a court to clear the path for dredging the navigation channel in the river Elbe in September, allowing for a rise in cargo volumes at Europe’s second-biggest container port after years of delay.

The city believes it will overcome a lawsuit from environmental groups NABU and BUND at hearings at Germany’s highest administrative court in Leipzig starting July 15, Hamburg city Economy Minister Frank Horch said in an interview.

“The European Commission has already approved the adjustment of the navigation channel following a diligent examination of the project,” Horch said. “That makes us hopeful that the court acknowledges these very extensive and precise considerations of all environmental standards.”

Hamburg, located about 130 kilometers (81 miles) upstream from the North Sea, says deepening and widening the channel is necessary because ultra-large vessels can’t leave and enter its port fully loaded and face tide restrictions. The global fleet of container ships that can carry 14,000 standard boxes or more is forecast to triple by the end of 2016 with the biggest carrying more than 18,000, according to the June Global Port Tracker report.

Hamburger Hafen & Logistik AG, the handler of three in four containers at the port, currently needs extra staff and equipment to deal with peak traffic. Dredging would provide more time to handle containers and increase ship utilization, HHLA said on June 19. Volumes may rise, while HHLA may increase terminal prices, Christian Cohrs, an analyst at M.M. Warburg, said in a July 4 note.

Medieval Times

Hamburg, once a member of the Hanseatic League, has repeatedly adjusted the Elbe’s passage since medieval times. The planning for the current project, which calls for a deepening of the navigation channel by about 1 meter as well as a widening in some sections to allow large vessels to pass each other, started in 2007.

The plans have been held up for about five years amid environmental and safety concerns before a court blocked the start of the dredging in 2012, adding to the risk that cargo is diverted to deeper competing harbors such as Rotterdam.

“This dredging project would have a lasting effect, as I am convinced that the growth of vessels sizes has come to an end,” said Horch.

About two-thirds of containers handled in Hamburg are carried by ships with a draft deeper than 12.5 meters, according to the UVHH association of port businesses.

The court has scheduled six hearings from July 15 to July 24 with an option for three more in the last week of July, according to spokeswoman Ina Oertel. That’s about twice as many days as normally allotted, she said.

This may indicate the court is “willing to bring the dispute to a happy end rather than transferring it to the European Court of Justice -- which would imply another delay,” said M.M. Warburg’s Cohrs. He added the outcome still “seems uncertain.”

Horch expects a verdict within six to eight weeks after the last hearing. Following a positive result, Hamburg could start some of the dredging, while other works would need to tendered on a European basis, a process of another four to six months, he said. The dredging would need about two years to complete. HHLA said it expects to see the first positive effects a year after the start of the dredging.

A dredging can provide “a relief, but no remedy,” Cohrs said. In contrast to Wilhelmshaven and Rotterdam, ultra-large vessels remain dependent on the tide when entering or leaving Hamburg fully loaded, which is a clear competitive disadvantage, he said. To make up for it, Hamburg must maintain its superior positioning for inland train and truck connections and its link to the Kiel Canal, The world’s busiest artificial waterway, the analyst said.

To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net

To contact the editors responsible for this story: Angela Cullen at acullen8@bloomberg.net Kim McLaughlin, Robert Valpuesta

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