Egypt has made a move to restructure the governance of the river transport industry in an effort to diversify its modes of transportation with the goal of advancing its long-dormant intentions to harness the Nile River for the mobility of goods and passengers.
Authorities anticipate that the decision will open up the industry to private investment, which has remained largely untapped despite its competitive advantages.
“Only a negligible amount of commercial goods [in Egypt] — approximately 5% — travel by means other than roads,” analyst Kevin Graham said.
IIn an effort to start to change this, Egyptian President Abdel Fattah al-Sisi ratified the River Transport Act (RTA) last month. This law aims to converge river transport rules and consolidate the formerly fragmented sector’s governance under the authority of the River Transport Authority (RTA).
The RTA will now have more authority, be in charge of issuing licenses and permits, and be able to form businesses, including joint ventures, to develop, operate, and maintain ports, berths, locks, and navigation routes.
“With the recent ratification of the new law, the potential for river transport to be a real contributor to the movement of goods in Egypt actually exists. The law is expected to streamline bureaucracy around river transport projects and to reduce barriers to private sector investment in river transport infrastructure,” Graham noted.
One of the industries the government highlighted as a contender to accommodate a larger private involvement is river transport in the state ownership policy document created this year.
United Arab Emirates has so far showed the most interest in participating in this race, and since February, representatives from the transport ministries of both countries and Abu Dhabi Ports have met on a number of occasions to explore joint ventures in the industry.
According to various press releases, these projects—all of which are still in the negotiation stage—include a line to transport cargo from the city of Minya to Alexandria and Damietta, a second line to transport granite from southern Egypt to the north, a passenger transport project in Greater Cairo, and the construction of fuel and maintenance stations.
A memorandum of understanding was also signed in March by Abu Dhabi Ports Group and Egypt to work together on three projects, including the construction and operation of a port in Minya, the management and operation of storage facilities in Damietta, and the outfitting, management, and operation of passenger lines in Cairo.
Cairo still has quite a journey ahead. “Despite its cost efficiency and environmental benefits, it will take a number of years before river transport is a significant aspect of Egypt’s wider transport and logistics infrastructure,” he noted.
“[And] while news of interest from large international investors gives reason for optimism, thus far most potential investments reportedly under discussion are focused on passenger transport rather than the transport of commercial goods where the greatest economic benefits are,” Graham added.
In the past, watercourse and navigational impediments have been the main hindrances to the development of the river industry, according to a report by the Federation of Egyptian Industries. These include the presence of choke points like as locks and bridges throughout the route as well as limited, inconsistent, and occasionally insufficient water levels. The Organization for Economic Cooperation and Development underlined the necessity of enhancing local capacity and river infrastructure in a report from 2014 as well.
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