{"id":584784,"date":"2023-04-05T00:00:00","date_gmt":"2023-04-05T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/govt-wants-the-private-sector-to-get-in-on-developing-egypts-river-transport\/"},"modified":"2023-04-05T00:00:00","modified_gmt":"2023-04-05T00:00:00","slug":"govt-wants-the-private-sector-to-get-in-on-developing-egypts-river-transport","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/govt-wants-the-private-sector-to-get-in-on-developing-egypts-river-transport\/","title":{"rendered":"Gov\u2019t wants the private sector to get in on developing Egypt\u2019s river transport"},"content":{"rendered":"

<\/span>The government is once again prioritizing the development of Egypt\u2019s river transport infrastructure \u2014 and it wants the private sector on board<\/span>, with Transport Minister Kamel El Wazir <\/span>showcasing last month<\/a><\/span> the projects on which the ministry is planning to work in partnership with our community. The ministry created a <\/span>comprehensive strategy<\/a><\/span> detailing the different areas in river transport it\u2019s looking to develop, including building a network of river ports, expanding the use of waterways to transport cargo and individuals, and setting up a digital river information services database to guide and manage inland transport. This plan comes as legislative amendments on river transport have come into effect and the executive regulations for the amendments are set to be issued soon. <\/span><\/p>\n

REFRESHER-<\/span> Last year, the River Transport Act, which aims to attract more investment into the<\/span> country\u2019s inland waterways, was <\/span>signed into law<\/a><\/span> after <\/span>receiving approval<\/a><\/span> from the House of Representatives. The new law will simplify the process of approval for river transport projects and is widely expected to draw private sector investment interest.<\/span><\/p>\n

What does the Transport Ministry envision for the development of the network?<\/span> The<\/span> ministry\u2019s plan entails creating a network of river ports for the movement of cargo and containers; providing passenger and cargo transport services along the Nile, with ports spread across all governorates; constructing new canal navigation locks that meet modern engineering standards to increase the capacity of the lock system; and clearing, dredging, and maintaining navigational channels to ensure a safe navigation path to facilitate navigation for Nile cruises, tourist ships, and commercial traffic. <\/span><\/p>\n

A lay of the (proverbial) land:<\/span> Egypt\u2019s river transport network consists of four primary<\/span> waterways \u2014 Cairo-Damietta, Cairo-Alexandria, Cairo-Aswan, and Cairo-Wadi Halfa. Altogether, the four waterways span 1,770 km. Additionally, there are several secondary waterways in the country\u2019s overall river transport network, which together span another 1.7k km. The majority of the network (3,136 km) can be used for inland water transport, but a smaller proportion (2,192 km) is classified as first-class navigable waterways. This classification is based on the width and depth of the waterway, how far above water level bridges are, and the dimensions of navigation locks.<\/span><\/p>\n

There currently exist a handful of river shipping players, but these do not operate at their<\/span> full capacity<\/span> as a result of the dearth of river-based cargo transport in Egypt. The most recent River Transport Authority data indicates that around 500 mn tons of goods circulate via the country\u2019s river network each year, comprising only 0.8% of the total transport of goods. Land-based transport accounts for the lion\u2019s share (95.7%) of cargo movement, followed by railways, which account for 3.5% of total cargo movement. The data also indicates that the most important goods transported via waterways are petroleum products, cement, limestone, coal, and phosphates. <\/span><\/p>\n

The River Act is widely expected to be a turning point for the development of Egypt\u2019s<\/span> river transport sector<\/span>, and will resolve investor issues in river transport to make the sector primed for private sector investments, Atter Hannoura, the director of the Finance Ministry's PPP unit, told Enterprise. There are no fresh projects that have been offered to private sector players as of yet, with the government currently working on the executive regulations to the River Act, Hannoura told us. <\/span><\/p>\n

There are projects in the pipeline:<\/span> The ministry\u2019s PPP unit has projects it is planning to pitch<\/span> to investors when the regulatory framework for the sector is complete, including a project for a river bus and three river ports in Upper Egypt catering to industrial players, Hannoura said. Another potential project that will be open for the private sector will connect the Damietta Port with the Nile, with the connection geared towards retail and industrial activity, an official source who requested to remain anonymous told Enterprise. <\/span><\/p>\n

The first PPP project to go through since the River Act was passed:<\/span> The government has<\/span> tapped Gharably Integrated Engineering Company (GIEC) and 3A International for a planned line between Aswan and Sudan, our source tells us. There are additional projects that will be announced soon to develop the Athar El Nabi station in Upper Egypt and the Al Maleh lock in Alexandria, the source said. <\/span><\/p>\n

More private sector players are keen to get in on the sector \u2014 but have some sticking points<\/span> that need to be addressed:<\/span> Several players in the sector Enterprise spoke with indicated that the government needs to provide more incentives, including slashing fees and operating costs. Nile Taxi Chairman Magdi Ghali, for one, pointed to what he said are prohibitively high licensing fees for river boats, which have increased to EGP 10k per boat, from a previous EGP 300-400. These high costs affect the sector\u2019s allure to private sector investments, particularly when it comes to passenger transport, which is not as lucrative as cargo transport. Ghali also stressed that these fees need to be reassessed in light of the current macroeconomic environment, which has already put players in the sector under financial strain due to the devaluation of the EGP and accelerating inflation. <\/span><\/p>\n

Addressing these issues can clear the way to unlock the development of a sector with<\/span> massive potential:<\/span> Investing in river infrastructure, including docks and ports, is a costly endeavor, which makes this sector ripe for PPP projects, advisor to the National Nile Company for River Transport Ahmed El Shamy tells Enterprise. Modernizing and developing river transport could have a significant positive impact on industries and for the economy as a whole, as river transport is a cheap method to move goods, which could help companies cut costs and, by extension, reduce prices for consumers, El Shamy said. The government is hoping to raise riverways\u2019 share of cargo movements to 10% within 15 years, El Shamy said, which is an ambitious but attainable goal if we double down on upgrading the sector\u2019s infrastructure and modify waterways to deepen riverbeds and address other traffic chokeholds.<\/span><\/p>\n

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