Egypt has big dry port plans — where do they currently stand?

More dry ports incoming. The House Transport Committee last week approveda draft decision put forward by the cabinet to grant Medlog, the cargo subsidiary of Italy’s Mediterranean Shipping Company (MSC), the rights to to design, construct, operate, maintain, and finance the new Tenth of Ramadan dry port and logistics center. The greenlight pushes forward a project that has been in the making for close to two years.

Project details: The project will be carried out under a 30-year public-private partnership (PPP) contract. The 250-feddan dry port aims to serve the industrial area in Badr, Ain Sokhna, East Port Said, the New Capital, and the Tenth of Ramadan. Medlog inked a contract with the government to set up the dry port back in August 2023.

The timeline: The Transport Ministry launched a tender for the port in 2022 and MSC was awarded it in June 2023.

Hot on the heels of the Sixth of October dry port: The October Dry Port Company (ODP) is setting up the USD 60 mn Sixth of October dry port under the build-operate-transfer structure — ODP is a JV firm established as a special purpose vehicle in Egypt to implement the project. The company is 70% owned by El Sewedy Electric, while 20% is held by SLP for Logistic Properties and 10% by Schenker Egypt.

Already proving fruitful: While the port is still in its trial phase, it has already proved to be a success. The dry port has successfully served six nearby industrial zones, connecting them to the Alexandria Port. This has enhanced the competitiveness of locally-produced products for export through lowered transportation and storage costs, Secretary-General of the Chamber of Transport and Logistics Amr El Samadony told Enterprise.

Part of a bigger, more ambitious plan: Egypt wants to become a global trade and logistics hub through a package of multipurpose transport projects — this includes developing Egyptian seaports and connecting them to production and distribution areas via rail, river, and road networks. The country wants to create integrated logistical hubs that connect ports to one another and establish dry ports and logistics areas that will enhance existing infrastructure by providing storage, distribution, and clearance locations.

Put it in numbers: The Transport Ministry wants to set up a total of 25 dry ports and logistic zones across the country, which will feed into an even bigger plan of creating seven logistical corridors supporting Egyptian trade. This includes 10 dry ports and 15 logistic zones across various areas — including Sixth of October, Tenth of Ramadan, Sadat City, New Damietta, New Fayoum, Beni Suef.

This will mean more storage capacity: The expansion plan for dry ports aims to increase storage space — a significant area of return on investment for the project, said El Samadony. At the same time, this expanded storage space reduces costs for factories by allowing goods to be transported in bulk to storage at dry ports and then to customs offices to complete all procedures for export so that they can be immediately sent to ships at Egyptian ports. This significantly lowers transport costs associated with multiple shipping and handling transfers and reduces the pressure on seaports and different wharfs, freeing up the transit trade.

More room for private sector involvement: This plan for port development is progressing but faces some hurdles which will open the door for the private sector to play a more significant role, a source in the port sector told Enterprise. They noted that the progress made in port and infrastructure development, wharf expansion, and other related projects has made the sector more attractive for investment.

Case in point: Last year, ADQ-owned AD Ports inked a 30-year concession agreement to develop and operate a container terminal at Safaga Port.

The bigger picture: More dry ports will help the country establish integrated industrial and logistics zones to serve the private sector.

A lower budget for port development: The Transport Ministry’s Public Authority for Land and Dry Ports’ investment budget for the current fiscal year is 54% lower than that of the year before, with EGP 263.2 mn allocated for investment.

An asset as local freight rates increase: El Samadony mentioned that the importance of dry ports will soon become obvious in light of the increase in local freight costs, which have risen by 15-18% and are expected to rise further if diesel prices increase.

What’s next? The Transport Ministry is expected to have tendered off ten dry ports by 2025 — the government will soon launch a tender for companies hoping to manage and operate the Shaq El Tebaan dry port.