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A RIVER RUNS THROUGH IT
The Nile snakes its way through Egypt from Aswan to the Mediterranean
Sea. For centuries, the river served as a major conduit for transport.
Yet today, less than one percent of inland cargo traffic is shipped
by river. But with the country’s cities and highways choked
by traffic, the river’s potential for cost-effective intermodal
shipping is becoming increasingly clear.
BY GEOFFREY CRAIG
Four decades of neglect have left an indelible mark on the nation’s
once-vibrant river transport system. River ports have deteriorated
or closed, channels have clogged up, and the vessels left in operation
are old and obsolete. The Nile, as a cargo transport route, has
ceased to exist, says Hisham El-Dib, a maritime attorney. “What
we have on the river are small boats carrying timber, not full cargo
carriage. We don’t see that here on the Nile [anymore].”
In the 1960s, the Nile carried about 20 percent of Egypt’s
inland transport, estimates Hamdy Barghout, business development
director at EgyTrans, one of the country’s largest freight
shippers. Today, river transport accounts for less than one percent
of the trade volume. By contrast, railways and roads carry 3.5 and
95 percent of total cargo, respectively.
Barghout explains that Egypt’s river transport infrastructure
has deteriorated over the past 40 years due to the construction
of the Aswan High Dam – which led to a drop in water levels
and created choke points along its length. With the government unwilling
to invest in dredging and upgrading port facilities, shippers opted
instead for the growing network of highways that has given rise
to commercial trucking fleets. Entire industrial complexes, such
as Sixth of October City and Tenth of Ramadan City, were built without
any rail or river connections. River ports were abandoned; barges
sold for scrap.
Wading in troubled waters
The potential for increasing Nile transport is enormous, but so
are the challenges. The river has 1,770 kilometers of navigable
waterway, yet no public ports or dry docks. Furthermore, the 42
cargo ports on inland waterways, most of which are very basic, are
privately owned by factories and have no rail or road connections.
One of the biggest impediments to navigation is water depth. For
960 kilometers from Aswan to Cairo the Nile is wide and deep, allowing
barges to travel with little hindrance. The problems begin just
north of Cairo, where the Nile divides into smaller branches that
flow through the Delta to the Mediterranean Sea. Shippers complain
about the river’s neglected condition, particularly on the
segments from Cairo to Alexandria and from Cairo to Damietta. “There
are rocks, sometimes dead animals and lots of [debris]” obstructing
the route, says Fathalla Mohamed Abdel Aziz, vice president of National
Shipping & Investment, an Alexandria-based shipper. “You
need a clean passage for transport.”
A series of locks have been constructed on these two segments to
regulate water depth and allow ships to pass sections that would
otherwise be too shallow. Ships must pass seven locks on the westerly
route from Cairo to Alexandria, which uses the Nubariya Canal, a
shipping and irrigation canal that intersects the Nile’s Rosetta
branch near Kafr Bulein. The naturally formed eastern route from
Cairo to Damietta has three locks.
Mechanical difficulties can delay a ship’s journey. “The
locks are lots of trouble to pass,” says Abdel Aziz. “Normally,
in each lock there are two entrances, but most of the time one of
them is under repair or broken.”
Shippers also complain about the lack of navigational aids, beacons
and lanterns, which restricts travel on the Nile to the daylight
hours. “At night, you put your ropes on a tree or something,”
explains Abdel Aziz. “There are no docks to berth for repair
or to make storage for cargo.”
As a result of these obstacles, the trip between Alexandria and
Cairo can take up to three days. The 1,900-kilometer stretch between
Cairo and Aswan can take nearly three weeks.
And it can be a lonely trip. The government has a virtual monopoly
on Nile logistics through the state-owned River Transport Company.
Most private freight operators prefer to operate land transport
from Egyptian seaports. Only shipments too large to fit on trucks
are transported by barge. “I prefer to work on the sea, and
will work on the river only when I don’t have enough work
on the sea,” Abdel Aziz says.
Flood of potential
There are signs that the tide is changing. Policymakers seeking
solutions to the dramatic increase in road traffic, accidents and
pollution that have accompanied the increased reliance on land transport
are reassessing the role of the Nile. River transport, it has been
recognized, is a cost effective, safe and environment-friendly alternative
to trucking.
According to a recent United Nations Development Program (UNDP)
study on Egypt’s transportation sector, river barges require
30 percent less fuel than trucks to haul the same payload. Less
fuel translates into cleaner operation and cheaper costs. The study
determined that hauling 1,000 tons one kilometer costs LE 0.05 by
river, compared to LE 0.07 and LE 0.14 for railways and trucks,
respectively.
The cost advantage is amplified when transporting large payloads,
which can be loaded on a single barge rather than a small fleet
of 40-ton trucks. “[The river] is suitable to transport [cargoes
of] untraditional weights and dimensions,” says Karim Aboul
Kheir, chairman of the River Transport Authority (RTA), a branch
of the Ministry of Transport. “For example, if the [cargo]
weight is 400 tons you can’t move it by truck; you have to
move it by barge. You can put 400 tons on one barge and move it.”
For this reason, the Nile is ideally suited for transporting bulk
cargo from Upper Egypt to Cairo such as phosphate, clay, petroleum
and construction materials, he says. Other common cargoes include
coal, fertilizer, grain and timber.
And given the condition of the nation’s roads – some
with potholes able to swallow fully-laden trucks – the river
is better suited for the transport of high-value, non-perishable
goods. “You can transport [fragile] goods because boats have
a low mechanical effect compared to trucks,” says Ghada Hamouda,
a transportation consultant. “Trucks move around a lot –
much more than barges. But it’s a trade-off because the trip
is longer.”
The Nile has the potential to serve a number of basic shipping models.
Goods can be moved from one river port to another, or from river
ports to seaports, truck depots or rail terminals. “With the
river, you can distribute goods to certain points, and then move
them onto the highways from there,” explains El Dib. “So
the river makes the whole [shipping] process easier.”
At present, however, no intermodal facilities exist on the Nile.
A July 2007 study, “Maritime Transport and Related Logistics
Services in Egypt,” by economists Ahmed Ghoneim and Omneia
Helmy, identified several obstacles to achieving river linkages
to road and rail networks.
One reason is that a standard legal framework for liability and
insurance of intermodal carriers does not exist in Egypt. “Liability
terms are still negotiated on a case-by-case basis in contracts
between various parties involved in the door-to-door trips. This
lack of standardization results in different interpretations of
contracts and creates legal problems associated with uncertainty,”
the study noted.
Another wrinkle is an outdated customs regulation that requires
that a separate letter of guarantee be issued if cargo is to change
modes. “This would lead to extra costs and extra loss of time.
This situation overrides the principal aim of intermodal transport,
which is to move goods to their destination on time, in good condition
and at as low a price as possible,” the study said.
An intermodal system requires a high-quality fleet of trucks. Yet,
the report describes Egypt’s fleet as suffering from “weak
maintenance, overloading, old age, high prices and inefficient services.”
Furthermore, local fleets are not made for container transport.
Instead, shippers use modified flatbed trucks, which the report
calls an “unsafe and inefficient method.”
Sinking money into the river
Currently, less than one percent of all goods transported in Egypt
go by river. The Ministry of Transport has set a goal of increasing
river transport’s share to 10 percent by 2012. That target
may seem overly ambitious, but RTA officials insist private investors
seeking cost-effective transport solutions are ready to invest.
But El Dib argues that the private sector will not likely get involved
until the government makes the necessary repairs to the river. “The
private sector won’t have to do anything with the infrastructure
of the navigational channel itself,” he says. “You cannot
go there and start dredging yourself. It’s an obligation of
the government. The government has to do something first and then
the private sector can start building the ports that need to be
operated.”
Fortunately, it is significantly cheaper to develop the infrastructure
of river transport than road networks. According to one Ministry
of Transport estimate, the cost of developing 1,500 kilometers of
waterway would be around LE 840 million, whereas a road of similar
length would cost LE 3 billion.
In 2002, the Ministry of Transport allocated LE 750 million for
river transport development projects under a five-year plan. Most
of this has gone into improving the river’s infrastructure
by dredging channels, building and repairing locks and ports, and
placing navigational aids on the river. Nearly 90 percent of these
projects have already been completed, according to Aboul Kheir,
while others are under construction or planned for a future date.
With infrastructure improvements under its belt, the RTA is now
preparing to provide land for investors to build and manage a network
of river ports. Calls for tender will be held for nine ports in
February 2008: Qena, Sohag, Assiut, Minya, Tebbin, Qalioubiya, Daqahliya
and two near Alexandria. “They will be large ports, big enough
for four or five barges to dock at the same time,” according
to Aboul Kheir.
Upstream battle
An earlier attempt, however, to build and operate a river port
has been mired in politics and litigation. The government awarded
a contract in 2000 to a private operator to develop and manage Athar
Al Nabi port in Maadi, about 10 kilometers south of downtown Cairo.
The port was established in the 1960s, but ceased operations after
the construction of the Aswan High Dam, which resulted in a three-meter
drop in the water level that left its moorings high and dry.
When Dutch consulting firm Gem Consultants conducted a study in
the late 1990s on ways to improve Egypt’s river navigation,
it recommended that Athar Al Nabi be re-established as a river port.
The study indicated that it was an ideal location to construct a
container terminal to serve Cairo.
With the river, you can distribute goods to certain
points, and then move them onto the highways from there
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An international tender was held and EgyTrans was selected from
22 finalists to build and operate Athar Al Nabi port, according
to EgyTrans’ Barghout. A 20-year BOT concession agreement
was signed between the company and the Ministry of Transport in
July 2000.
EgyTrans, an integrated cargo carrier, sought the contract because
it recognized the worldwide trend towards containerization, explains
Barghout. This would be the first container port on the Nile, and
its location would make it a contender for a slice of the capital’s
growing volume of container shipments. About 65 percent of incoming
container cargo passes through Cairo, and 80 percent of outbound
cargo, he points out.
The port’s size – about 57,000 square meters on a narrow
estuary – was relatively small, Barghout admits, but its capacity
could increase significantly if the space were managed properly.
But development plans ground to a halt as a standoff ensued with
a group of produce vendors who in the years since Athar Al Nabi
had ceased to operate as a river port had turned the unused docks
into a fruit and vegetable market. Attempts to remove the unlicensed
vendors from the earmarked land failed.
EgyTrans recognizes that the situation is a delicate one. “It
is a social issue because the government couldn’t move the
people from the port there,” says Barghout. “They gave
them several timetables, but unfortunately the people have been
staying there for 30 years so they don’t want to move.”
The matter was never resolved even after bringing it to the attention
of several high-ranking officials, including the prime minister,
he says. Therefore, it was brought before an arbitration panel to
decide. Both sides have presented their arguments, and a decision
is expected by mid-October.
Aboul Kheir says the RTA “respects the contract” with
EgyTrans, but the government must first handle the situation with
the produce vendors. “We have to move the people. But we can’t
move them without getting jobs for them. You have to find a suitable
place for them.”
In the meantime, he says, the RTA has not included Athar Al Nabi
port in its river port network scheme as it awaits the result of
the arbitration. But this leaves a gaping hole in the plan. Without
a port in Cairo, there is unlikely to be any significant increase
in river transport.
Investment trickles in
While the Athar Al Nabi port remains at a logjam, Aboul Kheir highlights
the RTA’s accomplishments thus far. On the Cairo to Damietta
route, dredging has deepened the river to 2.3 meters and new locks
at Zefta and Delta have been built to replace the existing weirs
and locks that date back to the 1930s. The projects were completed
at a cost of approximately LE 260 million.
On the Cairo to Alexandria route, the RTA recently issued contracts
for upgrading two locks. The Maleh lock is being elongated by Orascom
Construction Industries to extend into the Mediterranean at a cost
of LE 90 million. Arab Contractors, meanwhile, is building a three-gate
lock 100 kilometers upstream beside the existing one on the Nubariya
Canal at a cost of LE 322 million. Work on the two locks is expected
to be completed within three years.
The new locks are necessary to accommodate container ships, which
are much bigger than the river barges currently in use. Each will
be able to accommodate vessels up to 11 meters in width and 100
meters in length – large enough for the 1,000-ton barges the
RTA hopes will one day transport goods up and down the river.
On the Cairo to Aswan route, where water depth is less of a problem,
over 70 percent of the river channel has been cleared of obstacles
at a cost of LE 116 million. The Dutch have provided LE 8 million
in grants to install lighthouses, beacons and buoys to make this
section of the river navigable 24 hours a day. Nearly 200 fixed
lighthouses and 400 floating buoys are already in place between
Cairo and Assiut, and work has now moved to the Assiut to Aswan
stretch.
A similar project in the Delta has positioned nearly 300 lighthouses
and 16 buoys on the Alexandria to Cairo route. Despite the new navigational
aids, the ban on traveling at night has not yet been lifted. “Lanterns
and batteries are being stolen from sections of the Nile Delta,”
Aboul Kheir explains. “We’re discussing this problem
with the police.”
With the river route showing signs of improvement, the government
is hoping to encourage private shippers to build barge fleets. EgyTrans
had asked Arab Contractors to build a container ship for the Nile,
but after the Athar Al Nabi meltdown, it was called off. So far,
no other companies have stepped up to the plate, though some have
expressed interest in acquiring the fleet of the River Transport
Company, if it is privatized.
Freight companies that have until now worked exclusively on Egypt’s
sea or highways are now carefully studying the Nile waterway. Investors
see opportunities in barge building, port management and logistics
– but are waiting for the government to put the infrastructure
in place. The potential is there, they agree, but changes must be
visible first.
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