No. TRANSPORT PLANNING AUTHORITY MINISTRY OF TRANSPORT THE ARAB REPUBLIC OF

THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN IN THE ARAB REPUBLIC OF EGYPT

FINAL REPORT

Volume 2

Main Text

AUGUST 2008

JAPAN INTERNATIONAL COOPERATION AGENCY

NIPPON KOEI CO., LTD. KATAHIRA & ENGINEERS INTERNATIONAL

EGO JR 08-003

TRANSPORT PLANNING AUTHORITY MINISTRY OF TRANSPORT THE ARAB REPUBLIC OF EGYPT

THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN IN THE ARAB REPUBLIC OF EGYPT

FINAL REPORT

Volume 2

Main Text

AUGUST 2008

JAPAN INTERNATIONAL COOPERATION AGENCY

NIPPON KOEI CO., LTD. KATAHIRA & ENGINEERS INTERNATIONAL

Exchange Rate: US$ 1.00 = LE 5.71 (As of June 2007)

PREFACE

In response to the request form the Government of the Arab Republic of Egypt, the Government of Japan decided to conduct the “Study on Multimodal Transport and Logistics System of the Eastern Mediterranean Region and Master Plan in the Arab Republic of Egypt“, and entrusted it to the Japan International Cooperation Agency (JICA).

JICA selected and dispatched a study team headed by Mr. Akihisa Kojima of Nippon Koei from November 2006 to December 2007. In addition, JICA held the support meetings headed by Professor Toshinori Nemoto of Hitotsubashi University to provide advises to the Study Team during the course of the Study in Japan.

The Study Team conducted field surveys, and conducted discussions, data analysis and project formation together with the officials concerned of the Transport Planning Authority and the Ministry of Transport as well as other officials. Upon retuning to Japan, the Study Team prepared this final report.

I hope that this report will contribute to development in the Arab Republic of Egypt, and to the enhancement of friendly relationship between our two countries.

Finally, I wish to express my sincere appreciation to the officials concerned of the Government of the Arab Republic of Egypt for their close cooperation extended to the Study Team.

August 2008

Seiichi Nagatsuka Vice President Japan International Cooperation Agency

August 2008

Mr. Seiichi Nagatsuka Vice President Japan International Cooperation Agency

Letter of Transmittal

Dear Sir,

We are pleased to submit herewith the Final Report of the “Study on Multimodal Transport and Logistics System of the Eastern Mediterranean Region and Master Plan in the Arab Republic of Egypt.”

The report compiles all the results of the Study and reflects the advices of the authorities concerned of the Government of Japan and your agency as well as the comments made by the counterpart organization i.e. the Transport Planning Authority, the Ministry of Transport and other authorities concerned in the Arab Republic of Egypt.

The report presents the present and future conditions of the freight logistics for export and import. It presents the overall plan for the further logistics development of all the multimodal modal and logistics system: including forwarding activities, custom clearance and procedure activities. For the newly suggested projects, more than twenty projects are proposed in addition to the projects that have been already planned by the Government of Egypt.

We wish to take this opportunity to express our sincere gratitude to your agency and the Ministry of Foreign Affairs. We also wish to express our deep gratitude to the Transport Planning Agency and the Ministry of Transport as well as other Government Agencies concerned in the Arab Republic of Egypt for the cooperation and assistance extended to us during the Study. We hope this report will contribute to the development of the Arab Republic of Egypt.

Very truly yours,

Ken Nishino Team Leader, Study on Multimodal Transport and Logistics System of the Eastern Mediterranean Region and Master Plan in the Arab Republic of Egypt

Location Map

Holistic Approach to Logistics Enhancement ‡ Egypt Is Rising Again ‡ Egypt Is Losing Occasion Not to Lose the Emerging CHANCE ‡ Yet It Is Not Too Late

Widening Access Channel for tw o-w ay

T International o/ Fr Container Terminal om River Port

EU

Future Expansion KGL Container Terminal (planned) Container Terminal (Gov.)

Development of Alexandria Port ‹ Promotion of Strategic Sea Port Development Development of Port Source: Google Earth Issues Source: Google Earth ‹ Realization of Logistics System on Inland Transport Issues „ Lack of Container Handling Equipment „ Large Maintenance Dredging Volume „ Lack of Container Yard ‹ Enhancement of Logistics Industry „ Limited Channel Capacity „ Insufficient Water Depth ‹ Establishment of Governmental Body related to Logistics Development of Logistics Center at Port (East)

A le x A g ri cu l tu re Source: Google Earth R o a d

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6

1 - (

n ) C o t Construction of New Burg El Alab Construction of i n air to Belonging s e n

Industrial Area: 800ha Railw ay Authority g o- a r New Burg El Arab p U A Relocation x ( lex E

Direct Access Line Direct Access Line h t D r e Development of e s B e r New River Port t Access Channel l Existing na R Factories Development of io r it te o d Container dd a ad a (Free Zone Area) A w o Dekheila Port ak R Terminal

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i M n il (Future y ard) io d at r a m a m la Y s I Warehouses and factories ec ew - R N o r ir Phase 2 fo a C Container Terminal Industrial Area: 500ha AICT Dekheila Development of Belonging (Plan) Logistics Center to Army at 10th of Ramadan Development of Existing Plan of Construction of (Industrial Area: 3,500ha) Port Said Port (West) Port Said Port (East) -Sue Source: Google Earth Empty Direct Access Line z De Issues sert Army Area Road Area „ Insufficient Water Depth Development of „ Insufficient Area of Container Development of Logistics Center Yard Source: Google Earth New Freight Link Issues at 6th of October „ Heavy Congestion at Entry „ Limited Area of Container Yard (Industrial Area: 2,550ha) Gate „ Insufficient Length of Breakwater

Regional (Under Construction/Planning)

Example of Logistics Center Example of Modern (Bremen Logistics Centre) Necessary Programs to Develop Railcar Double Stacking Logistics Industry T o / F ‡Forwarding/Trucking Industry r o m Service Enhancement

G u l f ‡Human Resource Development

a n d ‡Legal Framework Improvement

A s i a ‡Financial Incentive n

Necessity of Modal Shift C o to Alleviate Traffic Congestion Development of Logistics Center u To Upper n to Enhance Export/Import Promotion t r Egypt i Source: www.freefoto.com e Source: www.big-bremen.de s Damietta Port P34 Access Channel Upgrade Project SP2 Study of Numerical Simulation for Sedimentation Prevention

Port Said Port (West) R10 Burg El-Arab Access Line P35 Container Yard Expansion Project Construction Project Port Said Port (East) L3 Logistics Center Development Project SP3 Master Plan Supplemental Study SP4 Study on Bunkering Service Station

R13 Railway Improvement Project (Ferdan - Port Said Port East)

R12 10th of Ramadan Direct Access Line Construction Project ( - 10th of Ramadan) New Burg El Alab

L2 Logistics Center Development Project (10th of Ramadan)

Alexandria Port SR1 New Freight Link Study (10th of Ramadan P27 Container Yard Expansion Project (AICT) – Helwan, Marazip Bridge) P28 Gantry Cranes Renewal and Additional RTG Installation Project (Government) P29 Container Yard Pavement Upgrade Project (Government)

Dekheila Port P30 Container Terminal Consolidation Project P31 Additional Container Yard Construction Project P32 Additional Breakwater Construction Project P33 Conveyor System Installation Project

R11 Sadat City Access Line Construction Project

W13 New River Port Construction Project Legend Railway Project

R9 6th of October Direct Access Line Railway Study Construction Project River Port Project L1 Logistics Center Development Project (6th of October) Logistics Center Project Note: Project written by bold face indicates urgent project.

Project Location Map

THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT

The Study on Multimodal Transport and Logistics System of the Eastern Mediterranean Region and Master Plan in the Arab Republic of Egypt Final Report

Table of Contents

Preface Letter of Transmittal Location Map Holistic Approach to Logistics Enhancement Project Location Map

Chapter 1 Introduction...... 1-1 1.1 Outline of the JICA Study ...... 1-1 1.1.1 Background...... 1-1 1.1.2 Objectives of the JICA Study...... 1-2 1.1.3 Study Area ...... 1-2 1.1.4 Data for Quantitative Analysis...... 1-2 1.1.5 Overall Schedule of the JICA Study...... 1-4 1.2 Organization and Participants of the JICA Study...... 1-6 1.2.1 Organization of the JICA Study ...... 1-6 1.2.2 Participants of the JICA Study...... 1-6 1.2.3 Japanese Side ...... 1-8 1.3 Major Events...... 1-10 1.3.1 Report Submission ...... 1-10 1.3.2 Seminars ...... 1-10 1.3.3 Workshops ...... 1-11 1.3.4 Participation of Other Seminar ...... 1-11

Chapter 2 Role of Logistics in Egypt and Improvement Needs ...... 2-1 2.1 Industrial Development and Logistics...... 2-1 2.1.1 Global Economy and Role of Logistics...... 2-1 2.1.2 Needs for a Logistics System Improvement Strategy in Egypt...... 2-2 2.1.3 Current Logistics Issues in Egypt...... 2-3 2.2 Individual Role of Ports in Egypt ...... 2-8 2.3 Problems of the Region ...... 2-9

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Chapter 3 Demand Forecast for Export and Import Freight...... 3-1 3.1 Industrial Development in Egypt ...... 3-1 3.1.1 Strategy of Industry Development ...... 3-1 3.1.2 Current Industrial Areas in Egypt...... 3-3 3.1.3 Future Vision of Industrial Structure...... 3-10 3.2 Socio-economic Framework...... 3-13 3.2.1 Population...... 3-13 3.2.2 Industrial Structure...... 3-14 3.2.3 Gross Domestic Product (GDP)...... 3-16 3.3 Freight Demand Forecast for Export and Import...... 3-18 3.3.1 Current Freight Flows and Volumes between Egypt and the World...... 3-19 3.3.2 Current Freight Flows and Volumes in Egypt...... 3-24 3.3.3 Future Freight Flows and Volumes for Export and Import in Egypt...... 3-35 3.3.4 Road Capacity and Transport Demand of Major Roads in 2022 ...... 3-43 3.3.5 Line Capacity and Transport Demand of Major Railway Lines in 2022...... 3-46 3.3.6 Inland Waterway Capacity and Transport Demand in 2022 ...... 3-52 3.3.7 Freight Handling Capacity of Logistics Center...... 3-53 3.3.8 Impact of Fuel Subsidy Reduction...... 3-55

Chapter 4 Logistics-related Facilities and Operation: Land Transport ...... 4-1 4.1 Introduction ...... 4-1 4.1.1 Current Trend of Different Transport Modes Sharing ...... 4-1 4.1.2 Logistics Stakeholders...... 4-2 4.1.3 Governmental Organization Related to Logistics ...... 4-3 4.2 Road System...... 4-5 4.2.1 Truck Operators ...... 4-5 4.2.2 Major Freight Routes and Current Facilities...... 4-8 4.2.3 Operation Performance and Efficiency ...... 4-17 4.2.4 Ongoing Road Projects...... 4-19 4.3 Railway System ...... 4-20 4.3.1 Major Freight Routes and Current Facilities...... 4-20 4.3.2 Operation Performance and Efficiency ...... 4-28 4.3.3 Ongoing Railway Projects ...... 4-30 4.4 Inland Waterway Transport System ...... 4-31 4.4.1 Major Freight Waterways and Current Facilities ...... 4-31 4.4.2 Operation Performance and Efficiency ...... 4-38

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4.4.3 Ongoing Projects...... 4-38 4.5 Dry Ports ...... 4-40 4.5.1 Dry Ports in Egypt...... 4-40 4.5.2 Operation Performance and Efficiency ...... 4-47 4.6 Logistics Issues...... 4-49 4.6.1 Issues related to the Road System...... 4-49 4.6.2 Issues related to the Railway System ...... 4-50 4.6.3 Issues related to the IWT System...... 4-51 4.6.4 Issues on Dry Port ...... 4-52 4.7 Countermeasures and Recommendations...... 4-54 4.7.1 Development of Logistics Centers ...... 4-54 4.7.2 Development of Railway and IWT Logistics System ...... 4-65 4.7.3 Recommended Project List...... 4-72

Chapter 5 Port-related Logistics System...... 5-1 5.1 Sea Transport...... 5-1 5.1.1 World Sea Transport Trends...... 5-1 5.1.2 Operation and Performance Efficiency ...... 5-2 5.1.3 Logistics Issues ...... 5-9 5.2 Sea Ports in Egypt...... 5-12 5.2.1 Port Management and Operation in Egypt...... 5-12 5.2.2 Current Facilities...... 5-15 5.2.3 Operation Performance and Efficiency ...... 5-16 5.2.4 Logistics Issues ...... 5-27 5.2.5 Container Handling Cost and Productivity...... 5-33 5.2.6 Existing Development Plans for Future...... 5-37 5.3 Conclusions and Recommendations ...... 5-39 5.3.1 Port Management and Operation in Egypt...... 5-39 5.3.2 Sea Ports in Egypt ...... 5-39 5.3.3 Recommended Project List...... 5-48

Chapter 6 Customs Clearance System ...... 6-1 6.1 Introduction ...... 6-1 6.2 Current System and Facilities...... 6-1 6.2.1 Function of Customs ...... 6-1 6.2.2 Procedures of International Trade and Logistics Flows...... 6-2 6.2.3 Existing Problems in Customs Clearance in Egypt...... 6-4

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6.2.4 Apparent Problems...... 6-5 6.3 Policy Efforts of Customs Authority...... 6-7 6.3.1 Recent Activities by Egyptian Customs Authority...... 6-7 6.3.2 General Assessment...... 6-8 6.4 Operation Performance and Efficiencies...... 6-12 6.4.1 Efficiency Indicator for Egyptian Import Procedure...... 6-12 6.4.2 Efficiency Indicator for Egyptian Export Procedure...... 6-13 6.4.3 Recent Improvement in Egypt ...... 6-13 6.5 Steps to Improve Customs Clearance Procedures in Egypt...... 6-14 6.5.1 Basic Improvement ...... 6-14 6.5.2 Large Scale Improvement...... 6-14 6.5.3 Single Window System...... 6-15 6.6 Conclusion and Recommendation ...... 6-16 6.6.1 General Conclusion...... 6-16 6.6.2 Recommendations ...... 6-17

Chapter 7 Freight Forwarding Industry...... 7-1 7.1 Industry Structure of Freight Forwarding Industry...... 7-1 7.1.1 Characteristics of Freight Forwarding Industry ...... 7-1 7.1.2 Profiles of Major Forwarding Companies ...... 7-7 7.2 Environment of Freight Forwarding Industry...... 7-11 7.2.1 Current Logistics Policy and Regulations ...... 7-11 7.2.2 Egyptian International Freight Forwarding Association (EIFFA)...... 7-16 7.2.3 Institutions for Logistics Related Courses ...... 7-18 7.3 Freight Forwarding Industry Related Issues...... 7-25 7.3.1 Issues for Freight Forwarders ...... 7-25 7.3.2 Issues on Logistics Policies, Regulations and Logistics Related Training Courses ...... 7-29 7.3.3 Issues on Logistics Infrastructure...... 7-33 7.4 Countermeasures/Recommendations ...... 7-37 7.4.1 Countermeasures...... 7-37 7.4.2 Policy Enforcement ...... 7-40 7.4.3 Recommended Project List...... 7-42

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Chapter 8 Private Sector Role in Egypt’s Inter-modal Logistics System...... 8-1 8.1 Privatization Process in Egypt ...... 8-1 8.1.1 Role of Private Sector...... 8-1 8.1.2 PPP Existing Laws and Regulations...... 8-3 8.1.3 Financial Policies ...... 8-3 8.1.4 Actual Performance in Private Sector Participation...... 8-4 8.1.5 Assessment of PPP Performance...... 8-6 8.2 Private Sector Participation in Infrastructure Projects ...... 8-8 8.2.1 The Need for PPP...... 8-8 8.2.2 Objectives of Introducing PPP...... 8-8 8.2.3 PPP Structure ...... 8-9 8.3 Railway Logistics Projects and Private Sector Finance ...... 8-12 8.3.1 Basic Concept ...... 8-12 8.3.2 National Railways and Private Sector ...... 8-13 8.3.3 ENR between BOT and PPP...... 8-13 8.3.4 Foreign Experience of Private Role in Railways ...... 8-14 8.4 Freight Railway Network under PPP Scheme ...... 8-17 8.4.1 Conceptual Network...... 8-17 8.4.2 Proposed PPP Scheme ...... 8-17 8.5 Logistics Center (LC) Development under BOT Scheme...... 8-24 8.5.1 Legislative Issues ...... 8-24 8.5.2 Vision of Inland and Dry Ports Authority (IDPA)...... 8-25 8.5.3 Functions of LC ...... 8-26 8.5.4 6th of October LC ...... 8-27 8.5.5 Financial Issues...... 8-28 8.5.6 Possible Private Sector Participation (BOT/PPP Scheme) ...... 8-30

Chapter 9 Logistics Development Strategy in Egypt...... 9-1 9.1 Approaches to Strategy Formulation...... 9-1 9.1.1 Vision...... 9-1 9.1.2 Mission ...... 9-1 9.1.3 Strategies ...... 9-2 9.2 Strategy for Development of Logistics Infrastructure...... 9-5 9.2.1 Strategy 1: Securing International Hub Port Function ...... 9-5 9.2.2 Strategy 2: Strengthening Port Facilities for Export/Import Freight ...... 9-6

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9.3 Strategy 3: Facilitate Economic Transport Routes and Modes between Port and Factory...... 9-8 9.3.1 Inland Freight Corridor 1: Alexandria Port – Cairo ...... 9-8 9.3.2 Inland Freight Corridor 2: Damietta Port - 10th of Ramadan/Cairo ...... 9-12 9.3.3 Inland Freight Corridor 3: Port Said Port (West) - 10th of Ramadan/Cairo ...... 9-15 9.3.4 Inland Freight Corridor 4: Port Said Port (East) - 10th of Ramadan/Cairo/6th of October ...... 9-17 9.3.5 Inland Freight Corridor 5: Sokhna Port - 10th of Ramadan/Cairo/6th of October ...... 9-19 9.3.6 Inland Freight Corridor 6: – Port...... 9-21 9.3.7 Inland Freight Corridor 7: – Cairo...... 9-21 9.4 Development of Supporting Measures of Supply Chain Management (SMC)...... 9-24 9.4.1 Strategy 4: Speed-up Custom Clearance and Export/Import Procedure...... 9-24 9.4.2 Strategy 5: Enhancement of Software Aspects: Establishment of Nation-wide Electronic Data Interchange (EDI) System...... 9-25 9.4.3 Strategy 6: Rationalization of Logistics Flow - Construction of Logistics Center/ Dry Port...... 9-26 9.4.4 Strategy 7: Enhancement of Forwarding Industry...... 9-30 9.5 Strategy for Human Resource Development ...... 9-32 9.5.1 Strategy 8: Legal and Institutional Arrangement ...... 9-32 9.5.2 Strategy 9: Provision of More Training Opportunities ...... 9-33 9.6 Promotion Policy for Logistics Center/Freight Services of Railway and Inland Waterway...... 9-36 9.7 Social and Environmental Consideration ...... 9-40 9.7.1 Legal Process on Social and Environmental Consideration in Egypt ...... 9-40 9.7.2 Social and Environmental Consideration of the Master Plan Components ...... 9-41 9.7.3 Assessment on CO2 Emission by Modal Shift of Freight Transportation ...... 9-43

Chapter 10 Priority Projects and Implementation Program ...... 10-1 10.1 Approach to Formulate Implementation Program ...... 10-1 10.2 Identification of Logistics Projects and Programs/Studies ...... 10-1 10.2.1 Preparation of Initial Project and Program/Study List ...... 10-1 10.2.2 Preparation of Logistics Project and Program/Study List...... 10-2 10.3 Evaluation of Logistics Project and Program/Study List ...... 10-17 10.3.1 Evaluation Criteria ...... 10-17 10.3.2 Assessment of Projects and Programs/Studies...... 10-20

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10.4 Implementation Schedule ...... 10-23 10.4.1 Confirmation of Budget Envelope for Transport Sector...... 10-23 10.4.2 Implementation Schedule ...... 10-23

Chapter 11 Conclusions and Recommendations ...... 11-1

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Appendices

Appendix-1 Interview Surveys Appendix-2 Industrial Development Appendix-3 Methodology of Freight Demand Forecast Appendix-4 Sea Port Appendix-5 Public Private Partnership (PPP) Appendix-6 Project Profile

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List of Tables

Table 1.2.1 Steering Committee Members...... 1-7 Table 1.2.2 Egyptian Counterpart Team Members ...... 1-8 Table 1.2.3 Academic Advisor and JICA Members...... 1-9 Table 1.2.4 JICA Study Team Members...... 1-9 Table 1.3.1 Report Submission...... 1-10 Table 2.1.1 Summary of Preferences in Logistics ...... 2-4 Table 3.1.1 Planned Estimated Growth Rates in the Industrial Sector ...... 3-2 Table 3.1.2 Export Target...... 3-2 Table 3.1.3 Category of Industrial Zones...... 3-3 Table 3.1.4 Area of Developed Industrial Zone ...... 3-6 Table 3.1.5 Public Free Zones and Special Economic Industrial Zones ...... 3-7 Table 3.1.6 Industrial Zones in New Urban Communities...... 3-7 Table 3.1.7 Industrial Zones in Governorates...... 3-8 Table 3.1.8 Factories in New Urban Communities in 2006 ...... 3-9 Table 3.1.9 Major Industry and Product by Governorate...... 3-10 Table 3.1.10 Annual Agricultural Production Quantities to be transported from Toshka...... 3-11 Table 3.1.11 Forecast of Production in the Four Major Industrial Zones ...... 3-12 Table 3.2.1 Population of Egypt: Actual and Forecast...... 3-13 Table 3.2.2 Employment and Sector Share by Governorate in 2005...... 3-15 Table 3.2.3 List of Governorates with Higher Growth of Manufacturing Sector...... 3-16 Table 3.2.4 GDP: Actual Performance in the Past...... 3-16 Table 3.3.1 All OD Matrices Prepared in the JICA Study...... 3-18 Table 3.3.2 List of Top 10 Countries of Export and Import Volumes in 2005 ...... 3-20 Table 3.3.3 List of Top 10 Countries of Export and Import Container Volumes in 2005 ...... 3-21 Table 3.3.4 List of Top 10 Countries of Transhipment Container Volumes via Egypt in 2005 ...... 3-22 Table 3.3.5 Sub-Region Classification...... 3-23 Table 3.3.6 Handled Local Cargo(*) at Egyptian Ports in 2005...... 3-24 Table 3.3.7 Top 9 Cargos(*1) at Egyptian Ports in 2005 ...... 3-25 Table 3.3.8 Relation between the Handling Types and the Commodity Types in 2005...... 3-26 Table 3.3.9 Export and Import Volumes by Major Port and Commodity Type in 2005 ...... 3-27 Table 3.3.10 Export and Import Volumes by Transport Mode in 2005...... 3-27 Table 3.3.11 Export and Import Volumes(*) in 2022 by Commodity Type...... 3-35 Table 3.3.12 Growth Trend of the Cargo Volume in 4 Major Ports: 2004 - 2006 ...... 3-36 Table 3.3.13 Future Growth of Local Cargo Volume by 4 Major Ports...... 3-36 Table 3.3.14 Modal Share along Alexandria Port and Upper Egypt in 2005 ...... 3-37 Table 3.3.15 Adjustment of Modal Share along the Damietta Branch in 2022...... 3-37 Table 3.3.16 Local Cargo Handling Volume(*) by Transport Mode in 2022 and the Modal Share ...... 3-38 Table 3.3.17 Estimation of Export and Import Container Volumes in 2022 ...... 3-42 Table 3.3.18 Variables and Their Estimated Values...... 3-44 Table 3.3.19 Capacity Analysis of the Major Road ...... 3-44 Table 3.3.20 Line Capacity and Transport Demand of Railway by Section ...... 3-47 Table 3.3.21 Alternative Cases of Railway Network...... 3-49 Table 3.3.22 Total Transport Cost by Case in 2022...... 3-51 Table 3.3.23 Capacity and Transport Demand of Inland Waterway in 2022...... 3-52 Table 3.3.24 Dimensions of Logistics Centers near Metropolitan Tokyo, Japan ...... 3-54 Table 3.3.25 Distance between Cairo and Major Ports...... 3-55

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Table 4.1.1 Mode Share of Freight Transport in Egypt...... 4-2 Table 4.1.2 Major Stakeholders and Members in the Logistics System ...... 4-3 Table 4.2.1 Numbers of Trucks Belonging to Each Cooperative Society...... 4-7 Table 4.2.2 Average Daily Traffic (ADT) on Main Road Network...... 4-10 Table 4.2.3 ADT of Major Arterial Highways...... 4-10 Table 4.2.4 Length and Ratio of Roads by Locations under GARBLT ...... 4-12 Table 4.2.5 List of Toll Roads in Egypt ...... 4-12 Table 4.2.6 Programs of CREATS...... 4-14 Table 4.2.7 Distances among Major Cities...... 4-15 Table 4.2.8 Total Number of Registered Heavy Vehicles in Year 2006...... 4-17 Table 4.2.9 Truck Fleet of the Maritime and Land Transport Holding Company ...... 4-18 Table 4.2.10 Volume of Freight Handled by Trucks (2002)...... 4-18 Table 4.2.11 Type of Services at International Border Crossings...... 4-18 Table 4.2.12 Import & Export Freight Volumes at El-Saloum Port...... 4-19 Table 4.3.1 Major Railway Freight Flows to Major Ports by Commodity...... 4-23 Table 4.3.2 Time of Loading and Unloading Containers to Trains at Major Ports...... 4-25 Table 4.3.3 Example of Actual Travel Time of Freight Train (May 2007) ...... 4-27 Table 4.3.4 Port to Port Routes (May 2007)...... 4-27 Table 4.3.5 Number of Locomotives (September 2006)...... 4-28 Table 4.3.6 Characteristics of Freight Wagons (October 2006)...... 4-28 Table 4.4.1 Classification of Inland Waterways ...... 4-31 Table 4.4.2 Major River Ports in Egypt ...... 4-34 Table 4.4.3 Number of Barges Operating in the River (2006)...... 4-35 Table 4.4.4 Summary of Waterway Conditions...... 4-36 Table 4.5.1 List of Dry Ports in Egypt ...... 4-41 Table 4.5.2 Recommended Improvements for 10th of Ramadan Dry Port Users ...... 4-48 Table 4.6.1 Dry Port Facilities and Services ...... 4-53 Table 4.7.1 Major advantages of 6th of October and 10th of Ramadan as Location of LC...... 4-56 Table 4.7.2 Governorates with Dry Port Plans ...... 4-60 Table 4.7.3 Proposed Function of Logistics Centers ...... 4-61 Table 4.7.4 Logistics Center Evolution...... 4-61 Table 4.7.5 New Sections and Access Links of the Freight Railway...... 4-66 Table 4.7.6 Summary of Recommended Projects & Programs/Studies ...... 4-72 Table 5.1.1 Major Alliances and Independent Carriers...... 5-3 Table 5.1.2 Container Volume Handled by Major Four Operators...... 5-4 Table 5.1.3 Container Volume of the Major Ports in the East Mediterranean...... 5-5 Table 5.1.4 LSCL of Egypt ...... 5-6 Table 5.1.5 Number of Vessels passing through the Canal (2004 – 2006) ...... 5-8 Table 5.1.6 Cargo Volume through (2004 – 2006) ...... 5-8 Table 5.1.7 Main Shipping Lines calling at Egyptian Ports (as of 2006)...... 5-9 Table 5.1.8 Dimensions of Emma Maersk ...... 5-10 Table 5.1.9 Containerization Ratio in Egyptian Ports (2006)...... 5-10 Table 5.2.1 Container Terminal Operators in Egypt ...... 5-14 Table 5.2.2 Port Facilities at Egyptian Container Terminals ...... 5-15 Table 5.2.3 Required Berth Depth and Length by Ship Size...... 5-16 Table 5.2.4 Container Handling Volume and Transhipment Rate in Each Major Port (2006)...... 5-17 Table 5.2.5 Cargo Handling Volume in Each Major Port (2006) ...... 5-17 Table 5.2.6 Distances between Safaga Port and Neighboring Ports ...... 5-26 Table 5.2.7 Comparison of Tariff System between International Standard and System applied at Egyptian Government Terminals...... 5-33 Table 5.2.8 Comparison of Total Charges at Each Egyptian Container Terminal ...... 5-35 Table 5.2.9 Summary of Container Handling Productivity and Quayside Handling Capacity at Each Terminal ...... 5-36

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Table 5.2.10 Summary of Future Development Plans for Ports...... 5-38 Table 5.3.1 Share of Container Handling Volume (Export and Import) ...... 5-40 Table 5.3.2 Preliminary Estimate of Future Terminal Capacity ...... 5-40 Table 5.3.3 Summary of Required Functions and Actions at Each Port ...... 5-48 Table 6.2.1 Trade Facilitation Indicators...... 6-4 Table 6.3.1 Trading Across Borders in Egypt (1) ...... 6-10 Table 6.3.2 Trading Across Borders in Egypt (2) ...... 6-11 Table 7.1.1 Future Plan of Freight Forwarders...... 7-5 Table 7.1.2 Main Comments/Suggestions for the Government...... 7-6 Table 7.1.3 Some Local Major Freight Forwarders (1)...... 7-7 Table 7.1.4 Some Local Major Freight Forwarders (2)...... 7-8 Table 7.1.5 Some Main Foreign Freight Forwarders...... 7-10 Table 7.2.1 Logistics related Authorities within Ministry of Transport (1)...... 7-11 Table 7.2.2 Logistics related Authorities within Ministry of Transport (2)...... 7-12 Table 7.2.3 Notification of Loads Permitted on the Road Network Instructions ...... 7-14 Table 7.2.4 Some Main Training Courses Conducted by EIFFA ...... 7-17 Table 7.2.5 Some Main Courses Conducted by AASTMT ...... 7-19 Table 7.2.6 Training Staffs and Training Equipment at PTI...... 7-22 Table 7.2.7 Training Courses Provided by PTI ...... 7-23 Table 7.2.8 Outline of Training Courses Provided by PTI...... 7-23 Table 7.2.9 Outline of Dual Training Program Scheme...... 7-24 Table 7.3.1 Merits on Introduction of EDI...... 7-27 Table 7.3.2 Current Regulations for Freight Forwarders & Trucking Companies ...... 7-30 Table 7.3.3 Main Issues on Infrastructure for Freight Forwarder...... 7-33 Table 7.3.4 The List of Truck Terminals in Japan ...... 7-35 Table 7.4.1 Proposed Regulations on Freight Forwarder and Trucking Company...... 7-40 Table 8.1.1 BOT Projects under Ministry of Transport – Maritime Sector...... 8-5 Table 8.1.2 BOT/PPP Projects under Ministry of Transport - Road Sector ...... 8-5 Table 8.2.1 A Simplified Comparison between Different PPP Options...... 8-10 Table 8.2.2 Risk Allocation...... 8-11 Table 8.5.1 Major Logistics Centers in ESCAP Region ...... 8-27 Table 9.3.1 Alexandria Port – Industrial Zones (6th of October, 10th of Ramadan) Corridor...... 9-11 Table 9.3.2 Inland Freight Corridor 2: Damietta Port - 10th of Ramadan/Cairo...... 9-14 Table 9.3.3 Port Said Port (West) ~ 10th of Ramadan and Cairo Corridor ...... 9-16 Table 9.3.4 Port Said Port (East) ~ 10th of Ramadan Corridor ...... 9-18 Table 9.3.5 Sokhna Port - 10th of Ramadan, Cairo, and 6th of October Corridor...... 9-20 Table 9.4.1 Qualifications for Forwarding Industry Staff: Japan’s Case ...... 9-31 Table 9.7.1 Estimated CO2 Emission Decrease by Modal Shift from Truck to Railway ...... 9-44 Table 10.2.1 Status Classification...... 10-2 Table 10.2.2 Ongoing/Committed Projects (1/2)...... 10-3 Table 10.2.3 Ongoing/Committed Projects (2/2)...... 10-4 Table 10.2.4 Planned/New Projects (1/2)...... 10-8 Table 10.2.5 Planned/New Projects (2/2)...... 10-9 Table 10.2.6 Planned/New Programs/Studies ...... 10-10 Table 10.3.1 Indicators for Project Prioritization ...... 10-19 Table 10.3.2 Indicators for Program/Study Prioritization...... 10-19 Table 10.3.3 Assessment of Planned/New Projects in Order of Total Score (1/2) ...... 10-20 Table 10.3.4 Assessment of Planned/New Projects in Order of Total Score (2/2) ...... 10-21 Table 10.3.5 Assessment of Planned/New Programs/Studies in Order of Total Score...... 10-22 Table 10.4.1 Implementation Schedule (1/2) ...... 10-24 Table 10.4.2 Implementation Schedule (2/2) ...... 10-25

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List of Figures

Figure 1.1.1 Work Flow of the JICA Study ...... 1-5 Figure 1.2.1 Organization of the JICA Study...... 1-6 Figure 2.1.1 Traffic Flows and the 50 Largest Container Ports ...... 2-1 Figure 2.2.1 Roles of Ports in Egypt ...... 2-8 Figure 2.3.1 Role of Logistics Center ...... 2-10 Figure 3.1.1 Industrial Zones in Egypt...... 3-5 Figure 3.1.2 Area of Developed Industrial Zones...... 3-6 Figure 3.1.3 Area and Production of Major Industrial Zones...... 3-12 Figure 3.2.1 Number of Employees by Governorate in 2004...... 3-14 Figure 3.2.2 GDP Growth Rate: Actual Performance and Two Future Scenarios...... 3-17 Figure 3.3.1 Export and Import Volumes (Unit: Thousand Ton) ...... 3-19 Figure 3.3.2 Export and Import Container Volumes (Unit: Thousand TEU)...... 3-21 Figure 3.3.3 Transhipment Container Volumes (Unit: Thousand TEU) ...... 3-22 Figure 3.3.4 Transhipment Container Volumes by Sub-Region...... 3-23 Figure 3.3.5 Cement Export Flow in 2005 (Truck)...... 3-29 Figure 3.3.6 Gaseous Hydrocarbon Export & Import Flow in 2005 (Truck) ...... 3-29 Figure 3.3.7 Phosphates Export Flow in 2005...... 3-30 Figure 3.3.8 Wheat Import Flow in 2005 ...... 3-31 Figure 3.3.9 Maize Import Flow in 2005 (Truck) ...... 3-31 Figure 3.3.10 Other Basic Chemicals Import Flow in 2005 (Truck)...... 3-32 Figure 3.3.11 Current Traffic Volume by Truck...... 3-33 Figure 3.3.12 Current Traffic Volume by Railway...... 3-34 Figure 3.3.13 Current Traffic Volume by Inland Waterway ...... 3-34 Figure 3.3.14 Future Volume Flow on the Spider Network...... 3-39 Figure 3.3.15 Future Traffic Volume by Truck in 2022...... 3-40 Figure 3.3.16 Future Traffic Volume by Railway in 2022...... 3-41 Figure 3.3.17 Future Traffic Volume by Inland Waterway in 2022...... 3-41 Figure 3.3.18 Annual Average Daily Traffic in 2006...... 3-43 Figure 3.3.19 Comparison of Retail Gasoline Price...... 3-55 Figure 3.3.20 Change of Break Even Distance according to the Subsidy Reduction ...... 3-56 Figure 4.1.1 Share of Freight Transport Modes in Japan...... 4-1 Figure 4.1.2 Principal Related Inland Transport Logistic Organizations ...... 4-4 Figure 4.2.1 Classification of Truck Operators...... 4-5 Figure 4.2.2 Organization Chart of the Holding Company for Maritime and Land Transport ...... 4-6 Figure 4.2.3 Major Arterial Highways around Cairo ...... 4-8 Figure 4.2.4 New Bypass and Kafr Al-Zayat Bridge along Cairo-Alexandria Agricultural Highway ...... 4-9 Figure 4.2.5 The Ring Road Closing Plans ...... 4-11 Figure 4.2.6 General Concept of the Regional Ring Road ...... 4-11 Figure 4.2.7 Share of Heavy Trucks to Total Traffic...... 4-15 Figure 4.3.1 Railway Network in Egypt...... 4-20 Figure 4.3.2 General Layout of ENR Network Showing Double and Single Tracks...... 4-21 Figure 4.3.3 Freight Railway of Egypt Showing Main Freight Lines...... 4-24 Figure 4.3.4 Railway Network Showing Major Port-to-Port Routes for Containers ...... 4-25 Figure 4.3.5 Delay Experienced by Containers via Railway ...... 4-26 Figure 4.3.6 Railway Port-to-Port Container Volumes...... 4-29 Figure 4.3.7 Volume of Freight Transported by Railway (1990-2005) ...... 4-29 Figure 4.4.1 RTA Waterways in ...... 4-32 Figure 4.4.2 RTA Waterways in Upper Egypt...... 4-32 Figure 4.4.3 Plan of River Port Locations ...... 4-33

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Figure 4.4.4 IWT and Locations of Planned Ports...... 4-37 Figure 4.4.5 Historical Trend of Volume of Freight Transported by IWT (1998-2006)...... 4-38 Figure 4.5.1 Locations of Operating Dry Ports...... 4-41 Figure 4.5.2 Annual Volume of Container Throughput at SOSDI Dry Port...... 4-43 Figure 4.5.3 Number of Containers Handled at SOSDI Dry Port according to the Port of Origin...... 4-44 Figure 4.5.4 Annual Volume of Containers at 6th of October Dry Port ...... 4-46 Figure 4.6.1 Dry Port Concept...... 4-52 Figure 4.7.1 Movement of Trucks between Freight Terminals ...... 4-58 Figure 4.7.2 Container Volume for Export and Import per Governorate (2022)...... 4-59 Figure 4.7.3 Trucks and Containers Flow at the Logistics Center ...... 4-62 Figure 4.7.4 Dry Port Layout That Can Be a Part of a Logistics Center or a Stand Alone Facility...... 4-63 Figure 4.7.5 Value-Added Logistics (VAL) Services of a Logistics Center in a Port Area ...... 4-65 Figure 4.7.6 Recommended New Sections and Access Links for Freight Railway Network...... 4-66 Figure 4.7.7 Access Link to 6th of October Industrial Area ...... 4-68 Figure 4.7.8 Location of Proposed River Ports for Construction...... 4-70 Figure 4.7.9 Location of Athar El-Nabi River Port...... 4-71 Figure 4.7.10 Location of El-Tebeen River Port...... 4-71 Figure 5.1.1 Trend in World Sea Transport...... 5-1 Figure 5.1.2 Comparison of Container Cargo Flows between Europe, North America and East between 1998 and 2005...... 5-2 Figure 5.1.3 Concept of Hub and Spoke...... 5-2 Figure 5.1.4 Container Terminals Operated by Major Four Operators...... 5-3 Figure 5.1.5 Major Ports and Shipping Routes in Eastern Mediterranean Area ...... 5-4 Figure 5.1.6 Number of Vessels Passing through Suez Canal by Vessel Type (Monthly) ...... 5-7 Figure 5.1.7 Progress of Container Vessels ...... 5-9 Figure 5.2.1 Egyptian Port Locations...... 5-12 Figure 5.2.2 Structure of Administration of Main Container Ports in Egypt...... 5-12 Figure 5.2.3 Organization Chart of Maritime Transport Sector...... 5-13 Figure 5.2.4 General Layout of Alexandria Port...... 5-18 Figure 5.2.5 General Layout of Dekheila Port...... 5-20 Figure 5.2.6 General Layout of Damietta Port...... 5-21 Figure 5.2.7 General Layout of Port Said Port (West) ...... 5-22 Figure 5.2.8 Port Said Port (East) ...... 5-23 Figure 5.2.9 General Layout of Sokhna Port ...... 5-25 Figure 5.2.10 Location Map of Safaga Port...... 5-26 Figure 5.2.11 Government Terminal and AICT Dekheila ...... 5-28 Figure 5.2.12 KGL Terminal (planned)...... 5-30 Figure 5.2.13 Port Said West Container Terminal...... 5-31 Figure 5.2.14 Diagram of “CY/CY” System (International System)...... 5-34 Figure 5.2.15 Diagram of “CY/FO” System at Egyptian Government Container Terminals...... 5-34 Figure 5.2.16 Relation between Quayside and Yard Handling Capacities ...... 5-37 Figure 5.3.1 Alexandria International Container Terminal...... 5-41 Figure 5.3.2 Government Terminal and AICT Dekheila ...... 5-42 Figure 5.3.3 Damietta Port Rehabilitation Plan ...... 5-43 Figure 5.3.4 Port Said West Container Terminal...... 5-44 Figure 5.3.5 Master Plan of Port Said Port (East)...... 5-46 Figure 6.2.1 International Trade and Logistics ...... 6-3 Figure 6.2.2 Too Many Government Agencies ...... 6-6

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Figure 6.4.1 Efficiency Indicator for Egyptian Import Procedure ...... 6-12 Figure 6.4.2 Efficiency Indicator for Egyptian Export Procedure ...... 6-13 Figure 6.4.3 Average Time of Release in Export ...... 6-14 Figure 6.5.1 Model of Improved Customs Clearance ...... 6-15 Figure 6.5.2 Single Window System ...... 6-16 Figure 7.1.1 Customs Clearance Service...... 7-2 Figure 7.1.2 Equipment related to Logistics...... 7-3 Figure 7.1.3 ICT Application...... 7-4 Figure 7.1.4 Current Measures for Improving Logistics Business...... 7-5 Figure 7.3.1 The Conceptual Image of Logistics Strategy ...... 7-25 Figure 7.3.2 How Much the Company Emphasizes Training for Improving Skills of Employees...... 7-28 Figure 7.3.3 Partnership Forum on International Logistics Competitiveness in Japan ...... 7-30 Figure 7.3.4 The Qualification System for Logistics in Japan...... 7-31 Figure 7.3.5 Intention to Participating Qualification Systems...... 7-32 Figure 7.3.6 Freight Forwarder Related Infrastructure...... 33 Figure 7.3.7 Distribution of Truck Terminals in Japan...... 34 Figure 7.3.8 Customs and Port Related EDI Systems in Singapore...... 36 Figure 7.4.1 Image of Logistics Related Human Resource Training Courses ...... 38 Figure 7.4.2 Main Functions of Logistics Center...... 39 Figure 7.4.3 Example of RFID’s Pilot Project for Exportation...... 41 Figure 8.2.1 PPP Structure...... 8-10 Figure 8.4.1 Conceptual Freight-Railway Network ...... 8-17 Figure 9.1.1 Formulation of Logistics Master Plan...... 9-1 Figure 9.2.1 Planning Flows of Port Development ...... 9-6 Figure 9.2.2 Shift of Excessive Demand at Alexandria Port to Other Ports...... 9-7 Figure 9.2.3 Role Sharing among Main Ports...... 9-7 Figure 9.3.1 Planning Diagram for Inland Freight Corridor 1: Alexandria Port – Cairo ...... 9-8 Figure 9.3.2 Planning Diagram for Inland Freight Corridor 2: Damietta Port - 10th of Ramadan/Cairo...... 9-12 Figure 9.3.3 Planning Diagram for Inland Freight Corridor 3: Port Said Port (West) - 10th of Ramadan/Cairo...... 9-15 Figure 9.3.4 Planning Diagram for Port Said Port (East) – 10th of Ramadan Corridor ...... 9-17 Figure 9.3.5 Planning Diagram for Sokhna Port - 10th of Ramadan, Cairo, and 6th of October Corridor ...... 9-19 Figure 9.7.1 EIA System and Application Processing Flow...... 9-41 Figure 10.2.1 Framework for Identification of Logistics Projects & Programs/Studies ...... 10-1 Figure 10.2.2 Location Map of Ongoing/Committed Projects in ...... 10-5 Figure 10.2.3 Location Map of Ongoing/Committed Projects in Upper Egypt...... 10-6 Figure 10.2.4 Location Map of Planned/New Projects in Nile Delta...... 10-11 Figure 10.2.5 Location Map of Planned/New Projects for Upper Egypt ...... 10-12 Figure 10.2.6 Location Map of Planned/New Projects for Maritime Sector (Nile Delta)...... 10-13 Figure 10.2.7 Location Map of Planned/New Projects for Maritime Sector (Upper Egypt) ...... 10-13 Figure 10.2.8 Location Map of Planned/New Projects for Road and Railway Sectors (Nile Delta)...... 10-14 Figure 10.2.9 Location Map of Planned/New Projects for Road and Railway Sectors (Upper Egypt)...... 10-14 Figure 10.2.10 Location Map of Planned/New Projects for IWT Sector (Nile Delta)...... 10-15 Figure 10.2.11 Location Map of Planned/New Projects for IWT Sector (Upper Egypt) ...... 10-15 Figure 10.2.12 Location Map of Planned/New Projects for Dry Port and Logistics Center (Nile Delta) ...... 10-16

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Figure 10.2.13 Location Map of Planned/New Projects for Dry Port and Logistics Center (Upper Egypt)...... 10-16 Figure 10.4.1 Logistics Corridor...... 10-23

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Abbreviations

A/N : Arrival Notice AADT : Annual Average Daily Traffic AASTMT : Arab Academy of Science Technology & Maritime Transport ACCHC : Alexandria Container & Cargo Handling Company ACTF : Assistance for Customs and Trade Facilitation ADT : Average Daily Traffic AEI : Automatic Equipment Identification AGADIR : Agreement on the Establishment of a Free Trade Area between the Arab Mediterranean Countries AIAE : African Institute for Applied Economics AICT : Alexandria International Container Terminals APA : Alexandria Port Authority APL : American President Lines APMT : AP Mollar Terminals ASEAN : Association of Southeast Asian Nations AVI : Automatic Vehicle Identification AWB : Air Way Bill B/L : Bill of Lading BIMCO : Baltic and International Maritime Council BOO : Build-Own-Operate BOOT : Build-Own-Operate-Transfer BOT : Build-Operate-Transfer BRICs : Brazil, Russia, India and China CAPMAS : Central Agency for Public Mobilization and Statistics CBD : Central Business District CFS : Container Freight Station CGM : Compagnie Generale Maritime CHC : Container Handling Charge CKYH : COSCO, K Line, Yang Ming Line and Hanjin Shipping CMA : Compagnie Maritime d'Affretement COMESA : Common Market for East and South COSCO : China Ocean Shipping Company CPI : Consumer Price Index CPLP : Comprehensive Program of Logistics Policies CREATS : Cairo Regional Area Transportation Study CRM : Customer Relationship Management CY : Container Yard CY/CY : From container yard to container yard (one of freight system) CY/FO : From container yard to the quay (one of freight system) D/O : Delivery Order D/R : Dock Receipt DBFO : Design Build Finance Operate DF/R : Draft Final Report DP : Dry Port DPA : Damietta Port Authority DPW : Dubai Port World

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DW : Dwell Time DWT : Dead Weight Tonnage E/D : Export Declaration E/L : Export License EAIS : Egyptian Automatic Identification System ECA : Egyptian Customs Authority ECES : Egyptian Center for Economic Studies ECOM : Electronic Commerce Promotion Council ECR : Efficient Consumer Response EDI : Electronic Data Interchange EEPC : Egyptian Export Promotion Center EIFFA : Egyptian International Freight Forwarding Association EMDB : Egyptian Maritime Data Bank ENC : Electronic Navigational Chart ENIT : Egyptian National Institute of Transport ENLP : Egyptian National Logistics Platform ENR : Egyptian National Railways EOJ : Embassy of Japan EOS : Electronic Order System ERP : Enterprise Resource Planning ESCAP : Economic and Social Development in Asia and the Pacific EU : European Union F/R : Final Report FCL : Full Container Load FDI : Foreign Direct Investment FIATA : International Federation of Freight Forwarders Association FO : Free Out FTA : Free Trade Area FTZ : Free Trade Zone GAFI : General Authority for Investment and Free Zones GARBLT : General Authority for Roads, Bridges and Land Transport GATT : General Agreement on Tariffs and Trade GCR : Greater Cairo Region GDP : Gross Domestic Product GIS : Geographic Information System GOE : Government of Egypt GOEIC : General Organization for Export and Import Control GOPP : General Organization for Physical Planning GPRS : General Packet Radio Service GPS : Global Positioning System GS : Ground Slots GTZ : German Agency for Technical Cooperation HC : Holding Company HPH : Hutchison Port Holdings HS : Harmonized Commodity Description and Coding System I/D : Import Declaration I/L : Import License I/P : Insurance Policy I/V : Invoice IATA : International Air Transport Association IC Tag : Integrated Circuit Tag

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IC/R : Inception Report ICD : Inland Clearance Depot ICT : Information and Communication Technology IDA : Industrial Development Authority IDPA : Inland and Dry Ports Authority IITL : Institute of International Transport & Logistics IMC : Industrial Modernization Center IMF : International Monetary Fund IMMTA : International Multimodal Transport Association ISO : International Standard Organization IT : Information Technology IT/R : Interim Report ITS : Intelligent Transport Systems ITT : Invitation to Tender IWT : Inland Waterway Transport JBIC : Japan Bank for International Cooperation JETRO : Japan External Trade Organization JICA : Japan International Cooperation Agency JILS : Japan Institute of Logistics Systems JIT : Just-In-Time JNR : Japan National Railways JR : Japan Railway JRS : Japan Railway Standards JTA : Japan Trucking Association KGL : Kuwait Gulf Link Ports International L/C : Letter of Credit LC : Logistic Center LCL : Less than Container Load LNG : Liquefied Natural Gas LOA : Length Over All LPDPA : Land Ports and Dry Ports Authority LSCI : Liner Shipping Connectivity Index M/M : Minutes of Meeting MCIT : Ministry of Communications and Information Technology MCT : Medcenter Container Terminal MEA : Metropolitan Expressway Authority METI : Ministry of Economy, Trade and Industry Japan MHUUC : Ministry of Housing Utilities and Urban Communities MIS : Management Information System MISC : Malaysia International Shipping Corporation MITI : Ministry of International Trade and Industry MLIT : Ministry of Land, Infrastructure and Transport Japan MOE : Ministry of Education MOF : Ministry of Finance MOI : Ministry of Investment MOT : Ministry of Transport MSC : Mediterranean Shipping Company MVA : Manufacturing Value Added NORAD : Norwegian Agency for Development Cooperation

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NSA : Norwegian Shipping Academy NTB : Non Tariff Barriers NVOCC : Non Vessel Operating Common Carrier NYK : Nippon Yusen Kaisha OCDI : Overseas Coastal Area Development Institute of Japan OD : Origin-Destination ODA : Official Development Assistance OECD : Organization for Economic Cooperation and Development OHSAS : Occupational Health and Safety Assessment System P.S.C.C.H. Co. : Port Said Containers & Cargo Handling Company P/L : Packing List PAFTA : Pan Arab Free Trade Area PCSU : Privatization Coordination Support Unit PCU : Passenger Car Unit PFI : Private Finance Initiative PIL : Pacific International Lines POP : P&O Ports PPI : Port Performance Indicators PPI : Private Participation in Infrastructure PPP : Public Private Partnership PQ : Pre-Qualification PR/R : Progress Report PSPA : PTI : Port Training Institute QIZ : Qualifying Industrial Zones QR : Quick Response RDI : Radio Data Interchange RFID : Radio Frequency Identification Data RMG : Rail Mounted Gantry Crane RTA : River Transport Authority RTG : Rubber Tired Gantry Crane S/W : Scope of Works SC : Steering Committee SCCT : Suez Canal Container Terminal SCM : Supply Chain Management SMEs : Small & Medium Enterprises SOSDI : 6th of October Storage & Distribution Co. SAE SPDC : Sokhna Port Development Company SPV : Special Purpose Vehicle SUMED : Suez-Mediterranean Pipeline TEU : Twenty Foot Equivalent Unit THC : Terminal Handling Charge TIFA : Egypt-USA Trade and Investment Framework Agreement TPA : Transport Planning Authority TSS : Technical Secondary School UAE : United Arab Emirates UASC : United Arab Shipping Co. UHF : Ultra High Frequency UK : United Kingdom UN : United Nations

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UNCITRAL : United Nations Commission on International Trade Law UNCTAD : United Nations Conference on Trade and Development UNDP : United Nations Development Programme USA : United States of America USAID : United States Agency for International Development USD : United States Dollar USTR : United States Trade Representative V/C : Transport Volume / Capacity Ratio VAL : Value-added Logistics VAN : Value Added Network VEH : Vehicle VOC : Vehicle Operating Cost W/B : Weigh Bill WCO : World Customs Organization WDI : World Development Indicators WEO : World Economic Outlook WG : Working Group WTO : World Trade Organization XML : Extensive Make-up Language ZAL : Zona de Actividades Logísticas

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Chapter 1 Introduction

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Chapter 1 Introduction

1.1 Outline of the JICA Study 1.1.1 Background In Egypt, industry and trade are the major factors determining the social and economic development of the nation, and their promotion is a focal task for the nation. The Government of Egypt clearly sets the basic national strategy to promote its industries by strengthening trade linkages with the EU and other regions in the world, and revised a “Egypt-EU Cooperation Agreement” many times during the period 1978 ~ 2001. Egypt has replaced it with a new “Egypt-EU Partnership Agreement” in 2001 (effective in 2004), seeking more valid assurance of market access to the large EU market. This policy also targets to raise the status of the Egyptian economy in the surrounding countries in the Eastern Mediterranean region and the African region. This process reflects a deep involvement of the Egyptian economy in the international free market. Egyptian products face severe competition in quality on the international market, and the exports of the materials/products are also ruthlessly assessed in terms of price competitiveness and timely delivery in the market. Egypt also has to procure industrial materials from foreign companies wherever they are located in the world, at the best timing for the production. Therefore the total lead-time, i.e., the period of time that it takes for goods to be delivered from the time of order, should be short and a delivery should be punctual. What is more, cost is crucial determinant in selecting trade partners. In this expanding globalization process, there is now a common awareness that an international logistics system of freight is a key factor for companies to obtain a comparative advantage in international trade. However, the existing transport development plans in Egypt have been drawn up independently by mode: maritime, road, railway, and inland waterway, resulting in insufficient intermodal connectivity and low efficiency of the system as a whole for the logistics of export/import freight. Comprehensive and intermodal solutions to optimize the logistics flows had not been built into the transport plans themselves. Furthermore, all those studies (except for inland waterways) were conducted more than ten (10) years ago, and are now so out-dated that their analytical frameworks are hardly applicable to today’s dynamically developing industries. Thus, Egypt needs to urgently prepare a comprehensive logistics development plan to fulfill current logistics needs and to reflect the change in freight traffic volume taking place now and in the future. Under this background, the Government of Egypt requested the Government of Japan to formulate a development strategy for a multimodal transport and logistics system. It includes a wide-range of fields such as transport system logistics, improvements to inter-modal facilities, and the role of public administration. This also includes highlighting potential opportunities for public-private partnerships (PPP). In response to the request, the Government of Japan decided to carry out “The Study on Multimodal Transport and Logistics System of the Eastern Mediterranean Region in the Arab Republic of Egypt” (hereinafter referred to as “the JICA Study”), and entrusted its execution to

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the Japan International Cooperation Agency (JICA), the official agency responsible for the implementation of technical cooperation programs by the Government of Japan. After conducting two preparatory studies, JICA appointed a joint venture of Nippon Koei (NK) and Katahira & Engineers International (KEI) as the JICA Study Team for the JICA Study. The JICA Study Team commenced the JICA Study in Egypt in November 2006.

1.1.2 Objectives of the JICA Study Objectives of the JICA Study are twofold, which are:

(1) Superior Objective To formulate a logistics development master plan in order to promote Egyptian export and import industries and foreign direct investment in Egypt, and consequently contribute to raising the standard of living of Egyptian people.

(2) Objectives - To disseminate the concept of logistics in Egypt, and to set logistics as one of the fundamental strategies to be fulfilled in transport development policies and industrial development policies, - To propose a master plan for multimodal transportation and logistics systems for Egypt, covering plans/projects concerned with public administration development for logistics planning, multimodal logistics system development, infrastructure development and its operation/maintenance, logistics industry promotion, legislative system, and customs clearance system, and - To propose the order of priority for proposed plans/projects of the multimodal transport and logistics systems in consideration of their effects on export-industry promotion and foreign direct investment. The analytical focus therefore falls on the flows of export/import freight in/around Egypt, and the JICA Study does not have a focal attention on the general domestic freight flows that are irrelevant to foreign trade. Transport sectors that the JICA Study covers are maritime, railway, road, and inland waterway sectors, and the aviation sector and the pipe line are out of the scope of the JICA Study. 1.1.3 Study Area The study area includes the whole of Egypt (including the Coast and its hinterlands), and other countries around the Eastern Mediterranean Sea, for the collection of necessary maritime data only. 1.1.4 Data for Quantitative Analysis The JICA Study is designed to prepare a logistics master plan with a focus on the export/import industries. The JICA Study Team collected all the useful data to estimate the present and future OD data, and all the demand forecast works had been conducted within a framework of the data successfully collected, such as CAPMAS, Egyptian Maritime Data

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Bank (EMDB) and the reports of previously conducted studies. In spite of great efforts in creating these databases, they are not necessarily useful for the specific purpose of the JICA Study to identify the pattern of domestic flows (origins and destinations) by export/import commodity and their volumes. Most comprehensive study in this field entitled “The study on the Transportation System and the National Road Transportation Master Plan” (JICA, 1993) is too old and outdated to reflect current dynamic economic development in Egypt, and had not distinguished the export/import freights from domestic freights. Even a current study entitled “A Study on the Development of the Master Plan for Freight Organization at National Level” (TPA, 2005) focused on the domestic freight alone. Date that the JICA Study Team utilized, are explained below:

(1) Export and import volumes by commodity type There were two available data for the export and import volumes in Egypt: 1) Statistical Yearbook 2005, Egyptian maritime Data Bank (EMDB), and 2) a time series data (1997 – 2006) obtained from Central Agency of Public Mobilisation and Statistics (CAPMAS). The export and import volumes at each port in 2005 were only available in the data of EMDB while the time series data was only available in the data of CAPMAS. The export and import volumes of both data were not necessarily consistent with each other. Therefore, the data of EMDB was used for the base data of the current export and import volumes (2005) at each port, while the data of CAPMAS was used for the trend analysis of each commodity type. (2) Export and import volumes by handling type The export and import volumes at each port for the past three years were obtained in the website of Maritime Transport Sector. The data were utilized to understand the present port situation and to analyze the containerization ratio in the logistics issues. (3) Export and import volumes by commodity type by transport mode by origin and destination in accordance with the zoning system consisted of 30 zones covering Egypt’s region and 12 zones for ports and borders (total 42 zones) Regarding railway and inland waterway, the freight movement data were obtained from Egypt National Railways (ENR) and River Transport Authority (RTA), respectively. For freight movement by truck, there was no available data that could identify the origins of exported commodities and destinations of imported commodities. However, production and consumption data by commodity type in each zone were obtained from “A Study on the Development of the Master Plan for Freight Organization at National Level (Technical Consultation Bureau, June 2005)”. They were OD matrices for internal freight movement in Egypt. The obtained production data included not only volume for export but also that for domestic consumption, while the obtained consumption data included not only volume for import but also that from domestic production. Therefore, it was necessary to separate the domestic freight movement and the freight movement related to export/import. The JICA Study Team conducted a supplementary data collection by means of interview survey in the course of the JICA Study. This supplementary survey would contribute to

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clarify the features and deficiencies of current logistics systems; however, it was also apparent that answers from each manufacturing company are suffering from the deficiency in quality/accuracy because private manufacturing companies are not in favor of information disclosures. For these reasons, the projects proposed in this master plan require further re-assessment in scale determination and its quantitative impacts of the proposed projects; however, this first study for logistics development (the JICA Study) surely identifies the necessary projects and priority of each project which is backed up by substantial analysis and discussion based on the newly acquired data and information. Further data compilation and re-assessment of the logistics patterns and volume are useful in the near future.

1.1.5 Overall Schedule of the JICA Study The JICA Study was commenced in the middle of November 2006. The JICA Study Team produced and submitted the Inception Report to the Transport Planning Authority (TPA), Ministry of Transport in November 2006. The JICA Study had been conducted since that time in accordance with the workflow illustrated in Figure 1.1.1. In February 2007, the JICA Study Team produced and submitted the Interim Report, which deals with the outcome of the JICA Study from November 2006 to February 2007. In April 2007, the JICA Study Team, additionally, submitted the Modified Interim Report, which contains the preliminary findings of the interview surveys. On the basis of the results of the interview surveys and logistics issues, the JICA Study Team focused on the supplemental data collection and formulation of logistics development strategy. In August 2007, the JICA Study Team prepared the Progress Report, which deals with effective countermeasures to current logistics bottlenecks and the progress of the development strategy. In November 2007, the JICA Study Team prepared the Draft Final Report, which contains the “Formulation of Multimodal Transport and Logistics Development Plan”. A multimodal logistics strategy and master plan are presented with various recommendations on necessary facilities, legislation arrangement programs, human resource development plans, as well as implementation programs. In February 2008, the JICA Study Team, additionally, submitted the Revised Draft Final Report, which reflects comments from the Steering Committee.

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Report/ Year/ Study Item Workshop/ Month Seminar

Task1: Preparatory Work [1-1] Collection of Relevant Data/information -2006- [1-2] Establishment of Study Policy

November Preparation of Inception Report

IC/R Submission and Discussion of Inception Report Seminar December Task2: Data Collection and Evaluation of Current Situation of Logistics and Logistics Related Infrastructure - 2007 - [2-1] Review of Existing Development Plans and Prior Plans January [2-2] Study of the Donors’ Cooperation in Logistics [2-3] Survey and Analysis of Current Condition of Logistics [2-4] Analysis of Bottleneck on Logistics

February Submission and Discussion of Interim Report IT/R

March

Submission of Modified Interim Report Workshop April

Task3: Formulation of Future Logistics Growth Scenarios [3-1] Zoning and projection of Socio-economic Framework May [3-2] Forecasting Future Freight Traffic Generation/attraction [3-3] Projection of Future Logistics Routes and Modes June [3-4] Analysis of Bottleneck on Logistics [3-5] Comparison of Countermeasures to Bottlenecks [3-6] Setting up Future Logistics Growth Scenario July PR/R Submission and Discussion of Progress Report August Workshop

Task4: Formulation of Multimodal Transport and Logistics Development Plan September [4-1] Setting up Principle and Objectives of Logistics Development Plan [4-2] Formulation of Strategic Logistics Development Plan [4-3] Recommendation of Logistics Related Infrastructure Development Plan and Selection of the Priority Projects October

November Submission and Discussion of Draft Final Report DF/R Seminar - 2008 - January

February Submission of Revised Draft Final Report Revised DF/R March April May June July

August Submission of Final Report F/R

Source: JICA Study Team Figure 1.1.1 Work Flow of the JICA Study

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1.2 Organization and Participants of the JICA Study 1.2.1 Organization of the JICA Study The JICA Study was carried out by the JICA Study Team in collaboration with the Egyptian Counterpart Team nominated by the Transport Planning Authority. The Steering Committee was set up for the entire duration of the JICA Study to discuss each report. The organization of the JICA Study is illustrated in Figure 1.2.1.

Ministry of Transport, Advisor JICA Transport Planning Authority

Steering Committee

Study Executing Body

JICA Study Team Counterpart Team

Source: JICA Study Team Figure 1.2.1 Organization of the JICA Study

1.2.2 Participants of the JICA Study The members of Egyptian side who participated in the JICA Study are listed below: (1) Steering Committee The Egyptian side has formulated a Steering Committee to supervise the JICA Study. The Steering Committee is composed of twelve (12) members from the Egyptian authorities, universities and companies chaired by the Vice Chairman, TPA as shown in Table 1.2.1. The Steering Committee meeting was held at the time of each report submission. Each discussion was compiled as “Minutes of Meeting”.

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Table 1.2.1 Steering Committee Members No Role Name Position 1 Chairman Eng. Hassan Selim Vice Chairman, TPA 2 Member Mr. Galal Abuel Fotouh Chairman, Customs Authority 3 Member Dr. Ismail Mubarak Expert, Marine Transportation 4 Member Prof. Dr. Mohamed Aly Ibrahim Head of Department of International Transport and Logistics, Arab Academy 5 Member Prof. Dr. Omar Abdel Hamid Professor of International Transportation, Faculty Salman of Commerce, Helwan University 6 Member Ms. Fatma Mohamed Hassan Head of the Central Department for Technical Affairs, TPA 7 Member Ms. Azza Ahmed Ghanem Head of the Central Department for Economic Affairs, TPA 8 Member Ms. Nehad Mohamed Badra General Manager of Ports Affairs, Maritime Transport Sector 9 Member Mr. Mohamed Hatem Ezzat General Manager, Holding Company for Maritime and Land Transport 10 Member Dr. Nabil Abdel Fattah Sehsah Transport Consultant 11 Member Mr. Unsi Fahim Advisor, Ministry of Transport 12 Coordinator Mr. Alaa Moustafa Kamel Director, Technical Office, Ministry of Transport

(2) Counterpart Team The Egyptian Counterpart Team was organized by governmental officers from fields related to logistics as shown in Table 1.2.2. Weekly meetings were held to discuss study methods and the participation in actual study works by the JICA Study Team and the Egyptian Counterpart Team. In addition, a pairing system was adopted to promote further work collaborations between the JICA Study Team and the Egyptian Counterpart Team (mainly TPA staff). A pairing system (where one member of the JICA Study Team and one counterpart always work together) was introduced from April 2007. The pairing system functioned well for executing data collection and specific task/analysis in depth, and in promoting technology transfer.

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Table 1.2.2 Egyptian Counterpart Team Members No Name Position 1 Eng. Hassan Selim Vice Chairman, TPA 2 Ms. Azza Ahmed Ghanem Director of Economic Affairs, TPA 3 Eng. Amr Foud Mahmoud Douarah Planning General Manager, TPA 4 Eng. Samy Samouil Morkous Chief Engineer, TPA 5 Mr. Ayman Ahmed Abd El-Tawab Rezk Economic Affairs Expert, TPA 6 Mr. Ahmed El-Sayed Saleh Attah Allah Statistics Affairs Expert, TPA 7 Eng. Mona Mohamed Kotb Senior IT, TPA 8 Mr. Ali Ibrahim Mohamed Senior IT, TPA 9 Mr. Mohamed Abdel-Sabour El-Ghandor Senior Economist, TPA 10 Mr. Amged Abdel Alim Senior IT, TPA Land Transport Planning General Manager, 11 Eng. Abd El-Fattah Enany GARBLT Merchandise Transport Advisor, Commercial 12 Eng. Ashraf El-Sebaei Dept, ENR 13 Mr. Samir Ahmed Hgameis Maritime Transport Sector 14 Mr. Kamal Al Bandari Maritime Transport Sector Inspection General Manager, Land Ports and Dry 15 General Abdel El-Rahman El-Feky Ports Authority 16 Mr. Osama Mouhamed Abd El-Menieem General Manager, GOEIC General Manager, Holding Co. for Maritime & 17 Mr. M Hatem E. Abou Mostafa Land Transport 18 General. Adel El-Kady Port Police Dept, Ministry of Interior

1.2.3 Japanese Side (1) JICA The JICA Study was supervised by the JICA Egypt Office and supported by an academic advisor and the JICA staff as shown in Table 1.2.3.

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Table 1.2.3 Academic Advisor and JICA Members No Name Position 1 Dr. Toshinori NEMOTO (advisor) Professor, Graduate School, of Commerce and Management, Hitotsubashi University 2 Mr. Katsuhiko OZAWA Resident Representative, JICA Egypt Office 3 Mr. Masakatsu KOMORI Deputy Resident Representative, JICA Egypt Office 4 Mr. Kenshiro TANAKA Assistant Resident Representative, JICA Egypt Office 5 Mr. Osamu TANAKA Assistant Resident Representative, JICA Egypt Office 6 Dr. Ashraf M. El-Abd Project Officer, JICA Egypt Office 7 Mr. Hideo MIYAMOTO (up to March 2007) Group Director, JICA Head quarters 8 Mr. Tomiaki ITO (from April 2007) Group Director, JICA Head quarters 9 Mr. Chikahiro MASUDA (up to October Team Director, JICA Head quarters 2007) 10 Mr. Tomoyuki NAITO (from October 2007) Team Director, JICA Head quarters 11 Mr. Nobuhiro KAWATANI (up to June 2007) Project Coordinator, JICA Head quarters 12 Mr. Makoto KANAGAWA (from July 2007) Project Coordinator, JICA Head quarters

(2) JICA Study Team The JICA Study was conducted by the JICA Study Team, organized by JICA, which is composed of thirteen members as shown in Table 1.2.4. Table 1.2.4 JICA Study Team Members No Name Position 1 Mr. Akihisa KOJIMA (up to May 2008) Team Leader/Intermodal Logistics Plan 2 Mr. Ken NISHINO (from June 2008) 3 Mr. Takeharu KOBA Demand Forecast/ Transport Plan 4 Mr. Nobuyuki IINUMA Logistics Infrastructure Plan (Sea Transport & Port) 5 Dr. Ahmed El Hakim Logistics Infrastructure Plan (Inland Transport) 6 Mr. Satoru NISHINO (up to March 2007) Administration & Operation Plan 7 Mr. Hiydeya SAKURAI (from April 2007) (Sea Transport & Port) 8 Dr. Nashreen G. Sinarimbo Administration & Operation Plan (Inland Transport) 9 Dr. Lim Pou Soon Forwarding Industry Plan 10 Mr. Teruo KAWAMURA Logistics Laws & Customs 11 Dr. Asaichi MIYAKAWA Logistics Industry Promotion/Policy 12 Dr. Hani Abdel Halim Privatization & PPP 13 Dr. Yoji TAKAHASHI Logistics System 14 Mr. Koichi ARAKAWA Logistics Survey/ Demand Analysis/ Administrator

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1.3 Major Events 1.3.1 Report Submission Reports were submitted in accordance with the following schedule:

Table 1.3.1 Report Submission No. Report Timing of Submission 1. Inception Report November 2006 2. Interim Report February 2007 3. Modified Interim Report April 2007 4. Progress Report August 2007 5. Draft Final Report November 2007 6 Revised Draft Final Report February 2008 7. Final Report August 2008

1.3.2 Seminars The JICA Study Team held the first seminar at the Egyptian National Institute of Transport (ENIT, City, Cairo) on 10 December 2006. The main purposes were as follows: - To raise public awareness on the necessity of logistics improvement, - To promote further communication among logistics related government offices, private companies, and the JICA Study Team, and - To develop the opportunity to co-work on logistics improvement in Egypt. At the beginning of the seminar, a video of a TV program was shown to explain supply chain management (SCM), identify common logistics issues (such as “time” being the crucial element in most cases), and the requirements to cope with the customers’ needs. This highlights that the “just-in-time” delivery system is the most important element in SCM. This concise and clear-cut TV program was followed by four (4) presentations: the first one providing a detailed explanation of typical logistics flow and necessary facilities/equipment, and the second one clarifying the flow and necessary procedures of modern custom clearance, which in many cases are the most serious obstacles in international logistics. Both drew attention to bottleneck issues in actual international logistics systems. Photo of the First Seminar Thirdly, Sokhna Port was presented as a very successful pioneering example of a logistics agency in Egypt in terms of efficiency in cargo handling. Lastly, an outline of the JICA Study was explained together with the study schedule and a request for further support and cooperation for the JICA Study Team.

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The seminar was attended by approximately 100 people including governmental officers and logistics-related businessmen. The question and answer session promoted the role of Egyptian logistics in export/import and industrial development, and highlighted the weak points of the current situation in Egypt. The second seminar was held at the time of the submission of Draft Final Report on 25 November 2007, and overall recommendations of the JICA Study were explained in detail.

1.3.3 Workshops The first workshop was held on 3 May 2007. The compiled findings of the “Interview Survey” were presented in the workshop to the Transport Planning Authority, Ministry of Transport, Steering Committee members, and logistics-related government officials and businessmen. Afterwards, the modern trend of logistics systems was explained with emphasis on SCM and its supporting equipment and devices. Lastly, the JICA Study Team presented the “Study Approach to the Formulation of Logistics Master Plan in Egypt” based on the contents of the previous two presentations, aimed at catching up to the level of the international logistics industry so as to support an export/import industry of Egypt. The JICA Study Team held the second workshop on 29 August 2007. Based on the contents of the Progress Report, the logistics development strategy plan was presented to logistics-related government officials, businessmen and academics (approximately 60 participants) in the workshop. In addition, the focal points of maritime and inland logistics development were explained. In the question and answer sessions, the approach of the JICA Study, location of the logistics center, and funding source were discussed between the JICA Study Team and the participants. 1.3.4 Participation of Other Seminar In response to request from the Arab Academy for Science and Technology and Maritime Transport (AASTMT), the JICA Study Team participated in a seminar on the “Legal Aspects of Electronic Business” during 7-10 July 2007. The seminar was organized by AASTMT and Leaders Training & Consultancy, which is a Bahrain-based training and consultancy organization serving the entire region. The objectives of the seminar were to develop the use of electronic business and to understand the concept of e-commerce for logistics-related businessmen not only in Egypt but also in Middle Eastern countries. The JICA Study Team presented the following two titles: - E-trade and International Logistics, and - Case Studies of Radio Frequency Identification (RFID) Application for Safe and Efficient International Logistics. The seminar was a great opportunity to share knowledge between Middle Eastern countries and Japan on logistics field.

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Chapter 2 Role of Logistics in Egypt and Improvement Needs

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Chapter 2 Role of Logistics in Egypt and Improvement Needs

2.1 Industrial Development and Logistics 2.1.1 Global Economy and Role of Logistics These days, we live in an era of the global economy, where the rise of technology has developed a business environment where products and services are marketed all over the world and partnerships and economic alliances are developed throughout the world. This global focus has already become essential for successful business today. In this global economy, manufacturing companies design production flows within the framework of an international logistics network. Figure 2.1.1 shows major container flows of sea routes. Regardless of national boundaries, they try to procure any inputs in the exact quantity/volume required, at the cheapest price, and with the delivery timing they want. Any difference in actual quantity, price and delivery timing from those specified in their order causes an additional cost for the manufacturing companies, and moves them away from the profit-maximizing equilibrium point. In the worst case it results in a financial loss. In addition, any inputs need to be delivered in a condition, which is the same as the original quality without any deterioration and/or damage. On the other hand, manufacturers are also facing the same requests from the consumers both in domestic and foreign markets. They have to deliver their products to the market, in the best quality condition, at the cheapest price and the best timing, as expected by the consumers and/or wholesalers/retailers.

Tacoma Los Angeles Hampton Roads Oakl an d New York/New Jersey Long Beach Charleston

Jeddah Dubai San Juan Sa la la h Nhava Sheva

Colombo

Less than 2 million TEU 2 to 4 million TEU 4 to 7 million TEU

7 to 10 million TEU Melbourne

More than 10 million TEU

Source: Rodrigue, Jean, Hofsa University of New York Figure 2.1.1 Traffic Flows and the 50 Largest Container Ports

In any case, the shorter the lead-time is the higher the user’s satisfaction is since the manufacturer can make their operation plan more punctual and flexible to reflect the sales performance. It also helps to reduce material stock volumes prior to production activities. So, shorter lead-time is an indispensable factor for manufacturers to get a new market and/or a higher market share, but if they fail to accomplish these requirements they could lose their

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market. This business model can be defined by the maxim: “Be competitive, or fade out of the market”, and has become more prevalent in many countries, accompanying progress/spread of regional economic integration. Bilateral free trade agreements and trade liberalization agreements are also further accelerating the progress of globalization. Under this economic globalization, an international/domestic logistics system together with an information network system has become essential, and improvement in its efficiency shall be explored without end. Only after continuous improvement of this global scale logistics system can Egypt develop its export industries and gain new market or larger market share in today’s severely competitive business world, where the supply chain management (SCM) of the company is functioning effectively. What is more, the consigners are always exploring new international freight routes with a keen interest to secure the shortest lead time. In responding to these needs, the Panama Canal will be widened (completion in 2014 planned) and it is sure that this project will contribute to attract the freight flows from South-east or East Asia to Europe via this canal. As for the land transportation, the Siberia railway has activated its activities of its freight transportation. At present, a share of this railway contribution is limited small: however, in a very long term, this railway route as well as the Panama Canal can have an potential impact to change its competitive status and the current patterns of freight transportation patterns. In preparing the national logistics improvement plan for the export/import industry even if it is a conceptual plan as this JICA Study is, this kind of world-wide trends of infrastructure development for freight are well reflected in planning process not to be left behind the trend. We are now living in such a competitive world. 2.1.2 Needs for a Logistics System Improvement Strategy in Egypt Egypt is now in the dynamic global economy, and is facing competition in terms of “price”, “speed” and “quality” of the logistics service. This trend is expected to progress further, and it is expected that Egypt will be further involved in a spiral of more inter-dependent and cooperative relationships with, and of fiercer competition with, other countries. This prospect is self-evident because the basic structure of Egyptian external trade is characterized by: 1) Major export commodities consist of goods of primary industries, and 2) Imports are characterized by intermediate goods for manufacturing industries. The horizontal division of work is being spread around the world, the production plants for imported items are fragmented into several areas regardless of national boundaries, and each plant is functioning and synchronizing with others, all of which depend on the support of a robust international logistics network. So, an efficient logistics system is required to respond immediately to the demands of both the international and domestic markets. Furthermore, the Government of Egypt has an export industry promotion policy as an engine for driving the national economy, targeting the EU market under the “Egypt - EU Partnership

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Agreement” scheme that has become effective in 2004. It is a basic requirement for an export promotion country to align all the policy efforts so as to have a logistics system organized to gain the wider markets and to maximize profit. Therefore, both an improvement of the international logistics system in Egypt and an establishment of industrial promotion policy are indispensable tasks. In Egypt, the promotion of export/import industry is the top priority national policy, and the applied policy measure is to induce an influx of direct foreign investment into the industrial zones. Therefore, “improvement of the logistics system” is set on how the logistics system can be made sufficiently attractive for foreign investors to operate in Egypt and to effectively promote the export industry led by the direct foreign investors. In other words, the task of the government is to facilitate the necessary logistics infrastructures and/or systems to effectively shorten the transportation time from the port to the sites of production plants. Some of these government tasks can involve the private sector. This should also function for the benefit of domestic trade companies. Core criteria of the logistics efficiency are: 1) Cheap, 2) Quick and punctual, and 3) No damage during transportation. However, these vary in degree by the type of goods. Fresh agricultural products for export, for example, require special devices/packages to keep them fresh without any damage. On the other hand, in cases of agricultural products that are processed for export, such special treatment is not necessary, and the cost for transportation is low. As well as the treatment in transportation, packaging and handling measures to reduce the damages from vibration during transportation are also indispensable for preventing the losses. It is noteworthy that general consumer goods require the highest quality of services in all criteria. A summary of preferences in logistics needs are shown in Table 2.1.1. In addition, proper transportation modes can be specified by type of goods and a priority preference in service quality. Truck is the best for “consumer goods” and “fresh agri-products”, while an inland waterway is suited for “bulk goods”. 2.1.3 Current Logistics Issues in Egypt The JICA Study Team conducted site inspections at the nodes of the logistics network. Preliminary findings cover a wide range of issues. Egyptian authorities have made every effort to smoothen the logistics flows, however, some issues are outside their responsibility and their efforts have not resulted in actual improvements. Major issues in determining the efficiency of the total logistics system of Egypt are listed below. Those issues were identified by means of the “Interview Survey” that was conducted during the period between January and February 2007.

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Table 2.1.1 Summary of Preferences in Logistics

Sensitivity Degree of Preference

Cost Speed Punctuality Quality Items (=time) of Delivery (=safety) Agri-products High 1) export as it is (fresh) sensitivity High High High

2) for processing use High sensitivity Low Medium Low Bulk goods High (coal, cement, stones, sands, etc) sensitivity Low Medium Low Precious machinery/parts Low sensitivity High High High Ordinary machinery/ manufacturing products Medium Medium Medium Medium Consumer goods Medium High High High Note: “High sensitivity”, “Medium” and “Low sensitivity” indicate relative order of the preference compared with the “Ordinary machinery/manufacturing goods” that the shippers/receivers prefer. Source: JICA Study Team

Issue 1: Lack of essential infrastructure and facilities In case of Alexandria Port, its hinterland is narrow and there is insufficient land for warehouses and storage space. Besides that, neither wide bonded zones nor warehouses (i.e. zone and/or warehouse where customs clearance of the imported cargo is suspended for a temporary storage, processing, exhibition) are available near the port. The other alternative counter-measure is a dry port located away from the port and near the mega consumption area such as Cairo, but none of dry port companies even in 6th of October and 10th of Ramadan, have been authorized yet as an official dry port. These insufficient facilities include the capacity of the cargo handling at the port. In case where the storage/cargo handling space in the ports is insufficient, cargo is transported to the inland container depot and/or distribution center. However, the facilities for transhipment in the ports are not so well connected with railway or inland waterway (Alexandria Port and Damietta Port). As this case illustrates, sufficient inter-modal facilities (such as re-loading facilities) can contribute to solving the congestion level of cargo handling in the port. At present in Egypt, all the imported cargo is transported from the port to the production plants by individually arranged trucks, and a regular line-haul service by truck or railway is not available in Egypt. A line-haul service is defined as a regular transport service by means of truck on the assigned route on a planned time schedule between the designated origin (terminal at port) and the designated terminal near the destination (for instance, factory and terminal near the mega consumption area). The advantages of this service are the easy arrangement of transportation regardless of the volume of cargo and that punctuality of the transportation services can be also guaranteed. All of what the cargo owners/recipients have

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT to do is to pick-up the cargo at the terminal by a medium or small truck. Total cost of the transportation is usually lower than order-made pick-up and delivery services. A regular line-haul service system requires a truck terminal or distribution center both at the port and the area close to the final destination. In some cases, the truck terminal and distribution center is integrated into a logistics park (including truck terminal, distribution center, inter-modal terminal, bonded warehouse, custom office etc). Lack of these distribution facilities has led to the unavailability of a regular line-haul transport service.

Issues 2: Potential economic routes to be explored The majority share of cargo from Asian countries is re-routed in Italy, Spain and other ports of the European countries, and a small share of Asian cargo is unloaded at Sokhna Port and transported into the hinterland by land transportation services. The latter route is apparently cheaper than the route via Suez Canal and European countries, and the necessary travel time can be drastically shortened. If the final destination of the cargo is Egypt, the utilization of this route (Sokhna Port to hinterland) should be fully utilized, and the necessary infrastructure and facilities should be provided according to the volume of transportation demand. As for the imported products from Europe, the major gate is currently Alexandria Port and transport is mainly by truck to Cairo and its adjacent areas. However, the Desert Road (Alexandria – Cairo) is expected to become congested in the future and the cargo handling capacity at Alexandria Port is physically limited in regard to the drastically increasing demand of transportation. Another new transportation mode and route should be explored. Re-activation of railway and inland waterway can be envisaged. The potential logistics route can be proposed and explored to save logistics time and cost. For instance, Sokhna Port could offer new logistics route for the cargo from the Asian countries to the final destination in Egypt. That route is: Logistics route (Asia ~ Sokhna Port ~ Cairo ~ 6th of October). Cargo from Asian counties goes through Suez Canal and arrives at Alexandria Port via European seaports on the Mediterranean Sea. However, the travel distance can be shortened by going on the new route of Sokhna Port ~ (railway, truck) ~ Cairo ~ 6th of October. At the Sokhna Port, rail transportation services are available several times a day, and re-loading of cargo to the railway can be executed smoothly. In addition, time and transportation cost can also be saved for some cargo from Asian countries to the industrial estates in 10th of Ramadan. These new routes might turn out to be more attractive for cargo to Cairo, 6th of October and 10th of Ramadan if a distribution center/truck terminal was established around Cairo, a pivotal city of the three destinations. Distribution center (in conjunction with truck terminals) attached to each industrial center and/or industrial area, can also contribute to save logistics cost and time by assuring a more frequent trucking service between the industrial estate and the port. A distribution center near Cairo could offer a new paradigm to improve the logistics flows into/from Cairo since a truck ban prohibits any large truck from going into the metropolitan

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Issue 3: Lack of dual logistics routes/modes for risk reduction A dual system is necessary as a risk reduction measure especially when the road traffic suffers from heavy traffic congestion or when the road traffic is interrupted by accident or other reasons. Though the cost might be higher and necessary time of logistics flows longer than those of the normal transportation mode, an assured availability of alternative logistics modes and routes can guarantee continuous production activities and secure reliability for users. At present for industrial logistics, there is no guaranteed effective substitutive transportation mode for Damietta Port and Alexandria Port except road transport. Inland waterway and railway are available at both ports, but their connectivity with shipping services is not in good condition. What is worse, the railway operation is not punctual to a planned time schedule and has experienced accidents. The water depth of the canal is not sufficient for container transportation and it has lock-gate problems. Thus, neither the current railway nor inland waterway is suitable for logistics use, especially for time- and delivery punctuality-sensitive cargo at these ports. As far as Port Said Port (West) is concerned, two transportation modes i.e. road and railway, are available. However, current railway access to the existing industrial zones is not convenient because direct access line to the industrial zones such as 10th of Ramadan and 6th of October is not available, and the frequency of freight train operation is very limited. Therefore, railway does not play a significant role to form a close transport linkage with the industrial zones around Cairo. This is a serious logistics defect for national industrial development. Sokhna Port has facilities and the most favorable transportation conditions, with both rail and truck services. Issue 4: Complicated procedures for export/import This can apply to both the port and cross-boarder transportation. The issue covers customs clearance (bill of lading, invoice, packing list, insurance), quarantine etc., and the problem lies in the complicated documentation and registration requirements. Some of the documents must be written in by hand, and require a long time to prepare. So, the language problem keeps non-Arabic speaking people away from custom clearance and export/import procedure. What is worse, advanced registration (prior to the date of entry) is not allowed, resulting in a late start to the procedures process. In addition, the shippers have to visit many officials in different offices. And in settling tariff rate disputes, a round trip between Alexandria Port and Cairo is sometimes required. As for cross border road transportation, the same kind of registration has to be executed at both sides of the border, and the driver wastes a lot of time while the truck is not permitted to go into the neighboring country with its cargo and in some cases re-loading of the cargo is required.

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As of December 2006, the Alexandria Port Authority has introduced a single window system of customs procedure making use of a computerized network system. Careful observation of the actual performance will be required since this kind of new system may not function because of the inadequate experience of the staff.

Issue 5: Lack of information network for system integration Many port authorities are already in the process of computerizing all the customs procedures at the port, or have plans to facilitate a computer system. However, this system is not well connected with many other related offices such as quarantine, forwarders, truck companies, railway, inland waterway, shippers and/or receivers. An information network makes all the personnel concerned aware of the actual location of cargo and allows them to take necessary actions to optimize the timing of service provision, and an insufficient network cannot accomplish this objective. In coping with these issues, some supporting measures for small and financially vulnerable companies were explored in the JICA Study. Issue 6: Further promotion measure for private sector participation Some development plans for infrastructure and/or facilities have not been implemented because of difficulties in project financing and the operation capability. Sokhna Port is a pioneering case of private sector participation (strictly speaking it is a Build-Operation-Transfer scheme), and there are no other successful cases of the project financing schemes with private participation. However, it is necessary to have private participation to make a breakthrough in the present slow progress of the logistics infrastructure development, and new ways of promoting this should be explored. Some new device to attract the private sector shall be explored more in the JICA Study. Private sector participation is especially useful for the management aspects of logistics facilities, which require special operation skills, know-how and experience. It is not practical to establish new logistics facilities and management without professional personnel.

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2.2 Individual Role of Ports in Egypt Port Said Port (West and East), Damietta Port, Alexandria Port and Sokhna Port are major international ports in Egypt. Though Damietta Port and Port Said Port (West and East) have routes connecting with the Middle East and Asia, the linkage between these two ports and Cairo is not good except the road transportation because of the poor and time-consuming network of railway. Alexandria Port and Sokhna Port have closer relationships with Cairo because of good highway networks, compared with other ports. However, poor quality of railway is also true for these ports. Taking into consideration the distance to Cairo from Damietta Port and Port Said Port, they should be developed as twin hub ports in the Mediterranean Sea Region under the condition that they would share their own compatible roles cooperatively. It is that the Government of Egypt would clearly define the individual future roles for these two ports and make the related port authorities accept the national vision (Figure 2.2.1). Alexandria could have established a strong linkage with many foreign ports in the Mediterranean Sea, and this port in a long run can be the biggest regional hub port in Egypt.

International Hub Port + Industrial Estate Global Enterprises

Regional Hub Port

International Port (not hub port)

Source: JICA Study Team Figure 2.2.1 Roles of Ports in Egypt

Although these ports have ambitious port development plans, these plans are not coordinated with each other and are sometimes incompatible. According to the port development plans, each port authority intends to develop its own port as the biggest port in Egypt without considering the role and plans of the other ports. It is necessary for the Government of Egypt to allot a suitable role to each port depending upon each port’s geographical, industrial and economical role. A comprehensive plan in which each port has its own specific and advantageous role is indispensable for Egypt to be at the forefront of international competition to establish hub ports in the Mediterranean Sea Region. Disintegration of plans of the ports would lead to a misallocation of national budget over a duplicated and over-assessed function of ports. Establishment of new Port Coordination Board or a function strengthening of

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existing governmental organization should have this definite role in Egyptian port development planning. Sokhna Port can be expected to be a major gateway for cargo transportation from/to Middle East and Asian countries as well as African countries. If large trunk line ships can stop in this port, the reduction of transportation costs and travel times can be expected to improve the competitive power of Egyptian products in Asian and East African countries.

2.3 Problems of the Greater Cairo Region Traffic congestion and environmental problems in Greater Cairo Region (GCR) is getting more serious. At the same time, because of the truck ban, the freight transportation in/around GCR has been suffering from a long waiting time and inefficient operation. This is especially true for trucks of imported consumer goods since any truck can not go into the center of GCR for delivery to wholesalers and/or retailers. Furthermore, because of the lack of parking facilities, loading/unloading activities are usually carried out on the street resulting in severe congestion, deterioration of the pedestrian environment and difficulty to access certain routes. Usually in this case, the distribution center storage all the freights from the ports temporary, and in an off-time of truck ban, small trucks commence the delivery of temporary stored goods after sorting, labeling, and re-packing. However, this kind of logistics system is not available in Egypt. This current situation is completely opposite to the situation that the modern logistics system seeks for, where the Just-In-Time (JIT) concept is required as the basic business model for the purpose to meet the users’ request and not to miss the business chance in making the profit and to minimize the total time of delivery. To cope with these urban problems, it is advisable to develop a Distribution Center in the outskirts of GCR. Physically the distribution center should be located at a site where pick-up/delivery trucks (between distribution center and shops in the center of GCR) as well as line-haul trucks (between distribution center and ports) can easily access to the highway and railway networks, river port and airport as shown in Figures 2.3.1.

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Incomplete Ring road without Logistics Center Logistics Facilities

City City

Complete Ring road with Logistics Center

Logistics Center

City City

Logistics Logistics Logistics Center Center Center24

Source: JICA Study Team Figure 2.3.1 Role of Logistics Center

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Chapter 3 Demand Forecast for Export and Import Freight

3.1 Industrial Development in Egypt 3.1.1 Strategy of Industry Development The Ministry of Foreign Trade and Industry and the Ministry of Investment have their own policies, on the basis of their mandate, for industry and investment development. However, there does not appear to be an integrated comprehensive national policy. There is no industrial development plan with due attention to necessary logistics issues for logistics improvement. The JICA Study Team understands that the Ministry of Foreign Trade and Industry is currently preparing a national strategy for industrial development, and the JICA Study Team hope that there has been collaboration related to logistics in establishing a new industrial strategy, especially in selecting appropriate locations for industrial zones. This section describes three items; (1) industrial development strategy, (2) export development strategy, and (3) target industrial sectors for export promotion. (1) Industrial Development Strategy a) Industrial Development of Egypt Establishment of the Industrial Development Authority (IDA) IDA was established under the Ministry of Foreign Trade and Industry in November 2005. IDA has a mandate to end long-standing obstacles to new industrial investment in Egypt. IDA is also responsible for facilitating the acquisition of land, with the necessary utilities, at feasible prices and for Greenfield projects1. The Industrial Development Strategy The Ministry of Foreign Trade and Industry released a policy paper entitled “The Industrial Development Strategy” (hereinafter “the Strategy”). The Strategy emphasizes three key issues to develop the Egyptian industry, i.e. industrial production through export development and FDI attraction, industrial productivity through a set of policies/programs, and an industrial structure ranging from resource-based and low-tech activities to medium-and high-tech industries. b) Target of Industrial Development Strategy In order to stimulate Egyptian industry and the economy further, growth and investment targets are planned for the industrial sector (2005-2025) as shown in Table 3.3.1. Real growth rates in industrial production are planned to exceed real GDP growth rates by 0-3 % after 2009.

1 The guarantees and exemptions of Law No. 8 Year 1997 for Greenfield projects are described below: • A project may be wholly owned by foreigners, • Guarantees against nationalization and expropriation of the project, • Output of the project is not subject to price control, • Projects are allowed to repatriate their capital and profits, • Foreign experts salaries are exempt from income tax if their stay in Egypt is for less than one year, and • Imported capital assets and construction materials required to establish an approved project are subject to a unified import duty rate of 5%. 3-1

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Considering the creation of new job opportunities for the labor force, around 7-8 % of the real growth rate in industrial production can be assumed as a national target for the industrial sector. It could be estimated that the industrial production value would be increased in accordance with the growth rates.

Table 3.1.1 Planned Estimated Growth Rates in the Industrial Sector Year 2005 2006 2007 2008 2009 2010 2011 2015 2020 2025 Real Growth Rate in Industrial Production 3.3 4.0 5.0 5.5 6.0 6.0 7.0 8.0 9.0 9.0 (%) Premium Over Real -1.7 -1.5 -1.0 -0.5 0.0 0.0 0.1 2.0 3.0 3.0 GDP Growth (%) Nominal Industrial 92.0 101.0 111.0 122.0 134.0 147.0 162.0 241.0 413.0 728.0 Production (billion LE) Share of Industry in 17.1 16.8 16.6 16.6 16.6 16.6 16.7 17.7 19.7 22.6 GDP (%) Nominal Investments in the Industrial Sector 12.0 16.0 22.0 27.0 32.0 35.0 45.0 77.0 130.0 229.0 (billion LE) Industry Share in Total Investment in the NA 14.0 15.9 17.4 18.9 18.9 22.3 26.9 29.5 33.8 Economy (%) Source: Ministry of Foreign Trade and Industry, Egypt’s Industrial Development Strategy-Industry

(2) Export Development Strategy The Strategy suggests that the objectives of targeting export are not only to increase the level of manufactured exports, but also to reinvigorate the technological structure of manufactured exports to increase the base of medium- and high-technology manufactured exports. As shown in Table 3.1.2, the Strategy is targeting the increase in the overall export proportion of the manufacturing sector in terms of the manufacturing value added (MVA) from 2005 through 2025. Table 3.1.2 Export Target Year 2005 2006 2007 2008 2009 2010 2011 2015 2020 2025 Manufactured export Propensity 20 20 22 22 24 24 26 30 34 40 (Exports, % of MVA) Manufactured Exports 18 20 24 27 32 35 42 72 140 291 (billion LE) Source; Ministry of Foreign Trade and Industry, Egypt’s Industrial Development strategy-Industry

(3) Targeting Industrial Sectors for Export Promotion The top three exports (excluding petroleum) of Egypt in 2005 are metal products (US$5,951 million), ordinary metals and manufactured (US$855 million), and vegetable products (US$736 million). Those three export sectors should be promoted in terms of export development and improving the knowledge-based of related technology, productivity and competitiveness with other countries. The Japan Desk of GAFI pointed out at the interview with the JICA Study Team that agro-products (in particular, fresh vegetables) and textile sectors should be promoted in terms of export and FDI attraction. The Strategy stated that traditionally the most important industrial sectors in terms of their

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value-added contribution through manufacturing are engineering and electrical machinery, food processing, chemical and pharmaceuticals, textiles and garments, building materials, furniture, paper and paperboard, and leather. It is proposed that the medium and high tech sectors be promoted as new fields for Egyptian manufacturing industries, but it does not mean discarding existing traditional sectors. The Strategy should focus furthermore on development of target sectors along with existing sectors. The JICA Study Team recognized that existing sectors and target sectors of exports include the following sectors respectively: Existing Sectors: - Engineering - Building Materials - Food Processing - Furniture - Chemicals & Pharmaceuticals - Paper & paperboard - Textiles & Garments - Leather

Target Sectors: - Engineering Machinery & Equipment - Life Sciences - Renewable Energy - Biotechnology - Labor-intensive Consumer Electronics - Ethnic Products - Automotive Components

3.1.2 Current Industrial Areas in Egypt (1) Locations of Industrial Zones a) Categories of Industrial Zone in Egypt According to IDA of Ministry of Foreign Trade and Industry, industrial zones in Egypt are divided into 4 categories as follows; Table 3.1.3 Category of Industrial Zones No. of Category Description Zone 1. Governorate 68 The zones belong to the governorate and were located on its land. They are Industrial Zones, controlled - till now - by the governorate however, in future will be controlled by IDA. Some of those zones are established by presidential or governmental decrees, but mainly they are established by the governorate decree. All of the 68 zones are operating and have production. 2. New-Urban 19 The zones belong to the Ministry of Housing, Utilities & Urban Communities Communities and were controlled by it until the establishment of IDA, industrial zones, which became responsible for controlling them. They are located in the new urban communities in addition to the other facilities placed in some cities (housing, education, health, etc). Note that IDA was established in November 2005. 3. Public Free 10 These areas belong to GAFI and under their supervision and control. Zones areas, Lands are given through GAFI; however, IDA approval is required for establishing an industrial project. 4. Special Economic 2 One is being developed in Suez and the other in Port Said but not yet in Industrial Zones , practice. Source: IDA

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT b) Locations of Industrial Zones Locations of industrial zones are shown in Figure 3.1.1. Major development areas for industrial zones are located along the River Nile (between Cairo and Qena Governorates), Alexandria desert road (between Cairo and Alexandria), and Cairo-Ismailia-Port Said road. The industrial zones in those areas and the major ports are mainly supported by the road network. c) Other Industrial Zones Heavy industry and mining zones are categorized as other industrial zones and their characteristics are summarized as follows: - These zones are located near to the areas of natural resources, - Established by Prime-Minister Decree, d) Future Development of Industrial Zones In order to forecast the future distribution of the industrial zones in Egypt, the JICA Study Team compared the areas of the major industrial zones in 2006 and 2022 as shown in Table 3.1.4 and Figure 3.1.2. The distribution of future industrial zones in the new urban communities and governorates could be clarified by taking the area used in each existing industrial zone as an indicator (See Appendix-2 for all the industrial zones of governorates and four major industrial zones in new urban communities). According to the previous mentioned table and figure, it is clear that the highly developed industrial zones are located in the Lower Egypt region (e.g. 10th of Ramadan, 6th of October and Burg el Arab), however most of the industrial zones which are located in Upper Egypt region (e.g. , , governorates) are small scale, newly established or unused yet. According to GAFI and IDA, the industrial zones in 10th of Ramadan and 6th of October have been almost saturated and El Sadat shall reach saturation soon. IDA has publicly announced new industrial development plans in 10th of Ramadan, 6th of October, Burg El Arab and El Sadat. The Government of Egypt is targeting the development of the Upper Egypt region by establishing new industrial zones, with incentives, and improving the infrastructure in its governorates. However, the magnitude of investment and development could be furthermore increased in the Lower Egypt region due to the already settled infrastructures and facilities in addition to the highly developed industrial establishments. From the logistics viewpoint, the JICA Study Team concluded that the focus should be on the two axes shown by dotted circles in Figure 3.1.1 that indicate the industrial zones along Alexandria Desert Road and Cairo-Ismailia-Port Said Road.

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Source: Worked out by JICA Study Team based on data from IDA Figure 3.1.1 Industrial Zones in Egypt

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Table 3.1.4 Area of Developed Industrial Zone Unit: ha Location 2022 Industrial Zone 2006 No (estimated) 1 10th of Ramadan, Sharkya Gov. 3,500 4,000 2 6th of October, Gov 2,550 3,750 3 Burg El Arab, Alexandria Gov. 800 1,380 4 Abu Rawash & its extensions, Giza Gov. 507 590 5 El Sadat, Menofia Gov. 500 1,050 6 Industrial Zone 31/4, Beni Suef Gov. 189 720 7 Safa Bany Ghaleb, Asyut Gov. 90 112 8 Bet Dawood, West of , Suhag Gov. 5 251 9 Industrial Zone 31/2, Beni Suef Gov. 0 900 Source: IDA

5,000 4,000 3,750 4,000 3,500 2006 2022

3,000 2,550 2,000 1,380 Area (ha) Area 800 1,050 720 900 1,000 590 507 500 189 251 90 112 5 0 0 123456789 Location No.

Source: IDA Figure 3.1.2 Area of Developed Industrial Zones

(2) Lists of Industrial Zones Tables 3.1.5, 3.1.6 and 3.1.7 show the names of public free zones, special economic industrial zones, industrial zones in new urban communities and industrial zones in governorates respectively. These tables were obtained from IDA. The numbers of each zone in Table 3.1.6 and Table 3.1.7 are indicated on Figure 3.1.1.

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Table 3.1.5 Public Free Zones and Special Economic Industrial Zones Industrial Zone Governorate Zone Name Cairo Nasr City Giza Media Production Alexandria Alexandria Menofia Shebin El Kom Suez Suez Public Free Zones Damietta Damietta Port Said Port Said East Port Ismailia Ismailia. Qena Qeft Cairo Badr Northern Suez gulf Economical Special Economic Suez Zone. Industrial Zones Port Said East Port Said Industrial Zone Source: Industrial Map information Center, IDA, May 2007

Table 3.1.6 Industrial Zones in New Urban Communities Governorate No. Communities Name Cairo 1 Badr 2 15th May 3 4 Al Shrouk Alexandria 5 Burg El-Arab Suez 6 Ataka, Ext. Damietta 7 Sharkia 8 Salehiyah 9 10th of Ramadan Kalyoubia 10 El- Menoufia 11 El-Sadat Behera 12 Nubariyah Giza 13 6th October Fayoum 14 New Fayoum Beni Suef 15 New Beni Suef Menia 16 New Menia Asyut 17 New Asyout Suhag 18 New Suhag Teba 19 New Teeba Source: Industrial Map information Center, IDA, May 2007

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Table 3.1.7 Industrial Zones in Governorates Industrial Zones in Industrial Zones in Governorate No. Governorate No. Governorates Governorates Cairo 1 South of Helwan Giza 40 Abou Roash , Ext 2 Thoura and Shak Al Beni Suef 41 Biad Al Arab Thouban 3 Al Katamia 42 Radi Koum Abou 4 Shak Al Thouban (seized) 43 Industrial zone 31/1 5 Al Roubiki 44 Industrial zone 31/2 Alexandria 6 Al Manshia Al Gadida 45 Industrial zone 31/3 7 Al Naseria 46 Industrial zone 31/4 8 Upper and lower Mirgham Fayoum 47 Koum Oushim 9 K.31;desert road 48 Kouta 10 Sepeko Menia 49 (Moutahra( east of River Nile 11 Al Agami; Upper Bitach Asyout 50 Al Awamer, Abnoub 12 Al Al Sanaia 51 Al Zahrabi; Abou Teig 13 Ohm Zagheou 52 Al Safa ; Bani Ghalib Port Said 14 C1 industrial zone 53 Sahiel Sielim 15 C6 industrial zone 54 Dashlout; Dairout 16 C8 industrial zone 55 Al Badari 17 C9 industrial zone Suhag 56 Al Kaother district 18 Western north of Bourtix 57 Al Ahaywa factory 19 Al Houd Al Samaki; Al 58 Biet Dawood; west of Girga Rasoua 20 C7 industrial zone 59 West of 21 C11 industrial zone Qena 60 (Al Kalahien, Kaft quarter Suez 22 Light industrial zone 61 Heo Dakahlia 23 Southwest of Gamasa 62 Al Shalalat ; Al Elaki valley 24 Industries Al Asafra Cluster New Valley 63 Al Kharga of small- scale Sharkia 25 Bilibis 64 Mout Kalyoubia 26 Al Shourok Matrouh 65 Matrouh road 26 km. southeast of Matrouh 27 Al Safa Industries Zone North Sinai 66 Baer Al Abd Kafr El-Sheikh 28 Baltiem 67 Al Masaeed 29 Motobus 68 El-Aresh Menoufia 30 Mubark,its Ext Behera 31 Al Natroun valley 32 Al Bousily desert 33 Edkou Ismailia 34 East of Al Kantra 35 First industrial zone 36 Technology valley 37 Second industrial zone 38 Abo Khalifa, Ext 39 Al Rayah -West Kantara Source: Industrial Map information Center, IDA, May 2007

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(3) Establishments of Industrial Zones in Selected New Urban Communities Table 3.1.8 shows that 10th of Ramadan, 6th of October, New Burg El-Arab and El-Obour have highly developed industrial zones and El-Obour, 6th of October, 10th of Ramadan, El-Sadat and Badr have many factories under construction. According to IDA and GAFI, the industrial zones of 10th of Ramadan, 6th of October, New Burg El-Arab and El-Obour have been saturated and El-Sadat also will be saturated soon. Many potential investors for those industrial zones are registering their names on waiting lists.

Table 3.1.8 Factories in New Urban Communities in 2006 Producing Factories Investment Annual City No. of Area (km2) Capital Stock Production Factories (million LE) (million LE) 10th of Ramadan 1,000 9.7 16,262 17,405 15th May 76 0.2 124 155 El-Sadat 263 3.8 2,785 1,029 6th of October 875 7.7 9,636 7,690 New Salehiyah 86 0.6 1,203 2,271 New Burg El-Arab 444 3,472.3 3,220 4,922 New Damietta 170 603.3 168 164 New Beni Suef 59 229.9 52 169 Badr 179 897.1 431 387 New Nubariyah 46 247.8 271 87 El-Obour 300 2,223.3 3,870 34,500 New Menia 6 13.1 5 8 New Cairo 20 169.2 47 15 Total 3,524 7,878 38,074 68,802

Factories Under-Construction Investment Annual City No. of Capital Stock Production Area (km2) Factories (million LE, (million LE, estimated) estimated) 10th of Ramadan 282 3,750.7 1,336 1,262 15th May 45 30 33 22 El-Sadat 212 2,660.1 2,757 6,902 6th of October 316 1,315.2 1,779 1,195 New Salehiyah 73 229.8 386 1,183 New Burg El-Arab 154 1,466.3 342 429 New Damietta 132 210.9 85 92 New Beni Suef 49 187 41 93 Badr 209 779.8 363 226 New Nubariyah 28 73.2 71 48 El-Obour 374 1,289.6 769 429 New Menia 25 39.6 32 19 New Cairo 2 3.6 1 1 Total 1,901 12,035.8 7,995 11,901 Source: IDA, Ministry of Foreign Trade and Industry

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(4) Major Existing Industries and Their Products at Governorate Level According to GAFI’s information, each governorate has the following established major industries and products:

Table 3.1.9 Major Industry and Product by Governorate No. Governorate Name Major Industry and Product 1 Menoufia & Asyout Pharmaceuticals and medical products. governorates 2 Suhag governorate Paint products and farm tractors. 3 El-Menia governorate Animal fodders, concentrates, organic fertilizers and concrete pipes. 4 Cement plants, vegetables and fruits preservation and dehydration. 5 El-Fayoum governorate Ceramics and sanitary wares – dehydration of field crops. 6 Petrochemicals and tire plants. 7 Menoufia governorate Household electrical appliances and paper products. 8 Chemical products, reinforced steel and spinning & weaving. 9 Kafr El-Sheikh governorate Liquid gases and cylinder filling. Source: GAFI

Products of selected industrial zones are shown in Appendix-2. 3.1.3 Future Vision of Industrial Structure (1) Allocation of Industrial Estates a) New Industrial Zones One of the major mandates of IDA is to create new industrial zones in Egypt. According to the new industrial development plan of IDA, 5,000ha of industrial zones are required for the next five years including 3,000ha of new industrial zones in the cities of Burg El-Arab (800ha), 10th of Ramadan (500ha), El-Sadat (500ha) and 6th of October (1,200ha). b) Industrial Zones in Governorates There are 68 industrial zones in 22 governorates. Since March 2007 IDA and governorates have been studying the sites of each industrial zone to determine if there is the necessary infrastructure and public services to attract investors and promote development of each industrial zone. Currently, many of the industrial zones are not yet equipped with fundamental infrastructures such as trunk road networks, water and wastewater treatment facilities. Such circumstances with insufficient utilities would be an obstacle to attracting investors for the industrial zone. Some of the industrial zones fully occupied but others are less utilized as shown in Appendix-2. Governorates are able to establish new industrial zones by decree but new establishments have been limited because the activities of IDA and the governorates have been concentrated on promoting the existing industrial zones.

c) Free Zones According to the interview with GAFI officials, the Government of Egypt is no

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longer interested in establishing new free zones because firstly; many investors are being attracted to the other industrial zones due to the recent economic environment reformed in Egypt, secondly; free zones would bring less benefits to Egypt than the other industrial zones due to the advantages guaranteed to investors. d) Heavy Industry and Mining Zones IDA is the authority responsible for developing heavy industry and mining zones. Cement factories have been established in the heavy industry and mining zones of the North Sinai area (1 cement factory), Suez (3), Cairo (2), Alexandria (1), Asyut (1), Beni Suef (1) and Qena (1). IDA does not appear to have any future development plans for heavy industry zones, so the development impacts of heavy industry zones on the future logistics in Egypt would be limited. e) Toshka Project The Toshka project, which is located in the western desert of High Dam Lake, is one of the mega projects of Egypt and the final completion of this project is scheduled in 2017. The project aims at transforming a desert in the region into an arable land in order to create 2.8 million new jobs and attract 16 million people to the new towns. The Toshka project is agriculture based and includes processing equipment. One of the major targets is to export agricultural products. The logistic system for export in terms of improvement of airports and road network was studied and reported on by TPA in 2003. The annual agricultural production quantities transferred from Toshka are shown in Table 3.1.10. Table 3.1.10 Annual Agricultural Production Quantities to be transported from Toshka (Unit: thousand ton) Consumption of Year Export Total Transported other governorates 2003 385.7 272.1 657.8 2008 642.8 453.4 1,096.3 2013 964.3 680.2 1,644.5 2017 1,285.7 906.9 2,192.6 Source: “Facing the transportation demands in the development project in South the Valley, Toshka region study”, Ministry of Transport, June 2003.

Estimation of quantities of agricultural production to be transported from the Toshka zone by various means of transportation is as follows: The annual quantities of the agriculture production transported from the Toshka zone, either to the different republic governorates or to be exported assumes that 15% of the agricultural production in special crops (vegetables, tomatoes, fruits, figs) will be transported in containers by air, which represents 6.7% of the Toshka zone total production and is distributed as follows; 75% to East of Owaynat airport and 25% to Aswan airport. Export of fruits has been started even though the quantities are limited.

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Exportation of fresh fruits and vegetables are planned through Aswan airport, but production and quantities for export are still only at the planning stage. Accordingly the logistics flow could not be clarified.

(2) Forecast of Production in Four Major Industrial Zones According to the production value in the industrial zones in 2005, four major industrial zones such as 10th of Ramadan, 6th of October, Burg El Arab and El Sadat have been selected for forecasting their industrial production in 2022. Based on the assumption that the production value per unit area will be the same by 2022 and that the new industrial zones in the four cities will be completely developed by 2022, the production in the four major industrial zones are estimated as shown in Table 3.1.13 and Figures 3.1.5. Productions of four industrial zones in 2022 are estimated to be 1.39 times more than 2005.

Table 3.1.11 Forecast of Production in the Four Major Industrial Zones (billion LE in 2005 prices) 2005 2022 Industrial Zone Area (ha) Production Area (ha) Production 10th of Ramadan 3,500 59.4 4,000 67.8 6th of October 2,550 34.5 3,750 50.8 El Sadat 500 11.6 1,050 24.4 Burg El Arab 800 10.1 1,380 17.4 Source: 2005 data obtained by IDA and 2022 data estimated by JICA Study Team

4,500 4,000 80.0 3,750 67.8 4,000 2006 3,500 70.0 59.4 2006 3,500 2022 60.0 3,000 50.8 2022 2,550 50.0 2,500 40.0 34.5 2,000 1,380 Area (ha) 30.0 24.4 1,500 1,050 L.E. billion 800 17.4 1,000 500 20.0 11.6 10.1 500 10.0 0 0.0 10th of 6th October El Sadat Burg El Arab 10th of 6th October El Sadat Burg El Arab Ramadan Ramadan Area Production Source: 2005 data obtained by IDA and 2022 data estimated by JICA Study Team Figure 3.1.3 Area and Production of Major Industrial Zones

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3.2 Socio-economic Framework 3.2.1 Population Population data reveals detail features such as population distribution, employment and sector structure. The Housing Census published detail information based on the Population and Housing Census 1996 and 2006 conducted by CAPMAS, which covers the whole country. The Census 2006 provides only the total figures by governorate and others are still in compilation process as of June 2007. Total populations in each Census year are presented in Table 3.2.1. The growth rate between the years 1986-1996 was 2.07 % and that of 1996-2006 is 2.04%, showing a slightly decreasing tendency, however it is still a high rate compared with the international average rate of less than 1.6% during 1970-2000 (US Census Bureau, International Data Base, August 2006).

Table 3.2.1 Population of Egypt: Actual and Forecast 1986 1996 2006 2022 Census Census Census (Forecast) Population (million) 90.8 (Optimistic) 48.3 59.3 72.6 86.0 (Conservative) Average Annual 1.41% (Optimistic) - 2.07% 2.04% Growth Rate (%) 1.07% (Conservative) Source: 1986, 1996, and 2006 Census CAPMAS, 2022 forecast: The Fifth Five-Year Plan for Socio-Economic Development (2002-2007) & First Year, Ministry of Planning (April 2002)

The future population perspective is presented in the twenty-year development plan (Ministry of Planning, April 2002), which provides the population forecast at 2022. It assumes that population growth rate at 2022 will be at 1.0% without any clear policy and reasoning, resulting in the annual average growth rate between 2006–2022 of 1.07% (conservative) and 1.41% (optimistic) up to 2022 with a remarkable reduction of population growth tendency. No amendment of future population figures has been published yet, as of June 2007. The two scenarios of “conservative” and “optimistic” set lower figures for population growth than actual figures since the 1986 Census. If the population growth rate is kept at the same level of 2.04% as it was in the 1990s and the early 2000s, the total population could be expected to reach at 100.3 million by 2022. Employment distribution by governorate is shown in Figure 3.2.1 together with sector composition. It apparently shows that the densely populated areas and the economic active areas spread along the River Nile and over the Delta area. Two corridors provide large employment opportunities: a) Cairo - Alexandria Corridor, and b) Cairo – Ismailia – Port Said Corridor. Since the management of the factories answered in the Interview Survey that they had selected their present locations because there was plenty of capable labor and favored living in an urban community, these corridors are considered to be the best locations to meet their demand and preference, suggesting that this tendency will continue in the future.

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1,000 workforces Primary Sector Secondary Sector Tershary Sector 2,500

2,000

1,500

1,000

500

0 Giza Alex. Suez Cairo Qena Menia Asyout Suhag Aswan Behera Sharkia Ismailia Fayoum Gharbia Matrouh Red Sea Dakahlia Port Said Damietta Menoufia Beni suef Beni Kalyoubia North Sinai North South Sinai South Kafr-El-Sheikh El-Wadi-El-Gidid

Source: CAPMAS Figure 3.2.1 Number of Employees by Governorate in 2004

3.2.2 Industrial Structure Sectoral share of each governorate and its GDP contribution are not published in Egypt. However, employment structure data by sector in 2004 and 2005 are available at the Central Agency for Public Mobilization and Statistics (CAPMAS) website. Such data reveals which governorates are leading the Egyptian economy. The brief analysis by the JICA Study Team reveals that the governorates located along the two economic corridors have higher contributions to GDP. These correspond with the locations of industrial estates. They are: First: Greater Cairo Region – Alexandria corridor, and Second: Greater Cairo Region – Ismailia – Port Said corridor. Table 3.2.2 lists all the governorates in order of sectoral share of the secondary sector. This roughly indicates how governorates contribute to the GDP since the secondary sector has the highest and increasing productivity among the three sectors and its large share indicates a dynamic and leading engine of GDP growth as a whole as well as in the number of employees. By considering the absolute size of this contribution as well as share, it is possible to gauge the magnitude of governorate’s contribution to the GDP. Agriculture is a traditionally labor absorptive sector and as it suffers from low labor productivity there can be disguised employment in the sector. The tertiary sector has a constant productivity, and thus it cannot grow rapidly in the short term. The secondary, especially manufacturing, sector alone can generate the power to accelerate economic growth.

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Table 3.2.2 Employment and Sector Share by Governorate in 2005 Employees (unit: 00) Share (unit: %) Code Governorate Primary Secondary Tertiary Total Primary Secondary Tertiary

2 Alex. 6 3,232 5,900 9,138 0% 35% 65% 4 Suez 17 397 769 1,183 1% 34% 65% 8 Kalyoubia 1,486 3,352 5,382 10,220 15% 33% 53% 5 Damietta 786 956 1,258 3,000 26% 32% 42% 1 Cairo 40 6,307 13,701 20,048 0% 31% 68% 14 Giza 1,382 3,975 8,160 13,517 10% 29% 60% 10 Gharbia 3,753 2,688 5,574 12,015 31% 22% 46% 13 Ismailia 406 459 1,343 2,208 18% 21% 61% 3 Port Said 266 291 902 1,459 18% 20% 62% 20 Qena 2,742 1,291 2,765 6,798 40% 19% 41% 18 Asyout 2,805 1,519 3,750 8,074 35% 19% 46% 6 Dakahlia 4,860 2,612 6,894 14,366 34% 18% 48% 16 Fayoum 2,846 1,116 2,291 6,253 46% 18% 37% 11 Menoufia 3,536 1,715 4,452 9,703 36% 18% 46% 7 Sharkia 5,450 2,244 6,475 14,169 38% 16% 46% 23 Red Sea 28 83 444 555 5% 15% 80% 21 Aswan 882 368 1,302 2,552 35% 14% 51% 9 Kafr-El-Sheikh 2,888 977 3,044 6,909 42% 14% 44% 26 North Sinai 121 97 483 701 17% 14% 69% 27 South Sinai 21 25 138 184 11% 14% 75% 19 Suhag 3,603 1,183 4,099 8,885 41% 13% 46% 17 Menia 7,038 1,355 3,496 11,889 59% 11% 29% 12 Behera 10,455 1,884 4,880 17,219 61% 11% 28% 15 Beni suef 3,820 774 2,618 7,212 53% 11% 36% 25 Matrouh 15 68 638 721 2% 9% 88% 24 El-Wadi-El-Gidid 126 48 403 577 22% 8% 70% 22 Luxor 159 67 659 885 18% 8% 74%

Egypt 59,722 39,182 91,462 193,182 31% 20% 47%

Note: Code is the identical number of governorate used in CAPMAS. Source: CAPMAS on the web, June 2007

A high share of the secondary sector is apparent in Alexandria, Suez, Kalyoubia, Damietta, and Cairo, where the governorates’ secondary sectors account for more than 30% of the employment of each governorate, and these are followed by Giza, Gharbia, Ismailia, and Port Said. An employment shift from agriculture/service sector to manufacturing suggests a high potential for economic growth in the future because of the high productivity of manufacturing. Those governorates are listed in Table 3.2.3 based on the data of 2004 and 2005. They are similar to the governorates listed in Table 3.2.2, suggesting higher contribution to GDP. Location of current and planned industrial estates is another determinant factor of future economic growth by the governorate.

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Table 3.2.3 List of Governorates with Higher Growth of Manufacturing Sector Category Governorates Remarks Higher Expansion of Damietta (7%), Port Said (6%), more than 3% per year Secondary Sector Kalyoubia (5%), Kafr-El-Sheikh (3%), Steady Expansion of Cairo (2%), Alexandria (1%), Dakalia more than 0% Secondary Sector (1%), Behera (1%), Giza (1%), Note: Other governorates also show higher sectoral rate of secondary sector, and those are Red Sea (6%), North Sinai (1%), and South Sinai (7%). However, their economic scale by governorate is small, less than 100,000 employees as a whole. So, they are omitted from this table. Source: Statistical Yearbook 2005, Central Agency for Public Mobilization and Statistics (CAPMAS), and CAPMAS web, June 2007.

3.2.3 Gross Domestic Product (GDP) Formal growth rate figures of gross domestic product (GDP) are shown in Table 3.2.4. It shows that the Egyptian economy had shifted from a stage where the economy was stagnating to a more dynamic development stage after 2003/04, showing an accelerating growth rate year by year; up to 6.9% in 2005/06. This reflects an expansion in the export and manufacturing industries that has been induced by influx of foreign direct investment (FDI) and trade promotion policies supported by the Ministry of Industry, and Ministry of Investment. Table 3.2.4 GDP: Actual Performance in the Past 2001 Items 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 -2006 Real GDP at Market 320 355 366 381 399 426 - Price (LE billion) Real GDP Growth 3.4 3.2 3.1 4.2 4.6 6.9 3.5% Rate (%) Source: Ministry of Planning, CAPMAS and calculation of Ministry of foreign Trade & Industry

The future GDP Growth rate was forecast by the Ministry of Economic Development (previous Ministry of Planning) in drafting the Sixth-Five years Plan for Socio-economic Development (2008-2012). This growth scenario sets an annual average growth rate of 9.3% (primary sector: 5.3%, Secondary sector: 12.5%, and Tertiary sector: 8.0% annually, in 2006 constant prices). These rates are much higher than the actual performance i.e. 3.5% during the period of 2000-2006 (2001/2002 current price) as a whole. The latest single year growth rate of 6.9% for 2005/06 indicates a higher rate than that of the average figure for the period, and shows the accelerated trend that is boosted by the manufacturing sector, mainly manufacturing exports as shown in the growth rate by sector. However, an average growth rate of 9.3% is extraordinary high compared with the previous years (4.6% and 6.9% in 2004/05, and 2005/06 respectively). This suggests the need to set a more realistic scenario. The JICA Study Team adopts a second scenario where the growth rate is 6.9%, being same as that in 2005/06 for the whole period of 2007-2012. This allows for the trend to an accelerated growth rate; almost two times higher than average of 3.5% between 2000/01-2005/06, and about three-quarters of the planned figure in the growth scenario.

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Comparison of the two scenarios is shown in Figure 3.2.2 together with the growth trend between 2000/01-2005/06.

Min. of Eco. Dev. Scenario 10.0% 9.0% 8.0% JICA Study Team's Scenario 7.0% 6.0% 5.0% 4.0% 3.0% Actual performance Forecast 2.0% 1.0% 0.0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: Ministry of Economic Development and JICA Study Team Figure 3.2.2 GDP Growth Rate: Actual Performance and Two Future Scenarios

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3.3 Freight Demand Forecast for Export and Import To achieve a modern logistics system along with the development of export and import industries, it is essential to understand the international trade conditions not only in the Eastern Mediterranean Region but also in the world. In addition, it is essential to have knowledge of freight flows from origin to destination within Egypt in order to identify main freight corridors, bottlenecks and locations of required future logistics facilities in the transportation network. Generally, international trade is discussed based on export and import values (monetary terms) as indicators representing the economic performance of a country. On the other hand, export and import volumes in terms of tons, TEU, or quantity are significant indicators for examining logistics issues. Most of the export and import commodities are transported from/to foreign countries via Egyptian ports by sea transport. Less than 1% of the total export and import volumes in 2005, according to the CAPMAS database, were transported by air via airports or land transport via international borders. Considering the circumstances, the current export and import volumes are mainly handled at the major Egyptian ports2. Since the “Statistical Book 2005” issued by the Egyptian Maritime Data Bank provided sufficient and detailed data/information to analyze export and import volumes, by commodity type and by country, it was used for basic data together with the results of the interview surveys. This section describes the results of analysis for current and future freight flows and volumes, while the method of the future freight demand forecast is described in Appendix-3. All the OD matrices estimated in the JICA Study reaches 144 (54 + 54 + 36) cases. Appendix-3 contains some OD tables, and all OD matrices are stored in the digital form (CD-ROM) attached to the supplementary document of the JICA Study Team. That is entitled “The Demand Assignment System for Export and Import Freight Volume” and was submitted to the Transport Planning Authority for the use in the future. Table 3.3.1 All OD Matrices Prepared in the JICA Study Commodity Case Transport Modes Total Remarks Types Present 3 54

(Truck+ Railway+ Future (1) Inland Waterways) 54 18 Types Future (2) Rail Development Case. 2 36 Inland waterway OD is (Truck+ Railway) same as Future (1) Source: JICA Study Team

2 The major Egyptian ports include Alexandria Port, Dekheila Port, Damietta Port, Port Said Port (West), Port Said Port （East), El- Port, Suez Port, Adabiya Port, Sokhna Port, Safaga Port and Nowaiba Port. 3-18

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3.3.1 Current Freight Flows and Volumes between Egypt and the World (1) Current Export and Import Flows and Volumes between Egypt and the World By categorizing the countries into ten regions consisting of Arab Countries, Eastern Europe, Western Europe, Asia, Africa, North America, Central America, South America, Oceania and other countries in accordance with the region classification by CAPMAS shown in Appendix-3, the export and import volumes between Egypt and the regions in the world are illustrated in Figure 3.3.1. Table 3.3.2 shows the top 10 countries by export and import volumes in 2005. The export and import volumes were 31.6 million ton and 44.7 million ton in 2005, respectively. In terms of export, Egypt was strongly related to Western Europe and Arab countries. In the region, Spain, Italy, Saudi Arabia and Syria show higher export volumes, of which the main commodities are cement, gaseous hydrocarbon and manufacturing goods. Since the United States is included in the top 10 countries for both export and import, it is an important trade partner for Egypt. Of all regions, in terms of import, Eastern Europe shows the strongest relationship with Egypt. The main commodity is wheat. Russia, Ukraine and Turkey are identified as the main trade partners in Eastern Europe. China was ranked 14 for import and 16 for export in 2005. Considering Figure 3.3.1 and Table 3.3.2, Egypt is mainly connected with Western Europe and Arab countries for export, while various countries and regions are the trading partners of Egypt for import. By promoting export industries, Egypt is expected to strengthen the relationship with current export countries and to explore other countries as new markets.

Eastern Eastern Western Western Europe Europe North Am erica 1 North America 0 Europe 7 Europe , ,3 2 0 0 0 0 0 0 0 0 5 8 , , 3,900 1 3,100 1 4 1 ,700 8, 8 Asia 300 Asia ,700 4,300 Arab Arab 0.03 Central America 300 Central America Countries Countries 900 800 0 .3 0 0 0 1, 0.08 ,6 600 Africa 0 6 Africa 5 .4 0 South America 0 South America 0

Others Oceania Others Oceania

Unit: thousand ton Unit: thousand ton Export Import Source: Worked out by JICA Study Team based on Statistical Book 2005, Egyptian Maritime Data Bank Figure 3.3.1 Export and Import Volumes (Unit: Thousand Ton)

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Table 3.3.2 List of Top 10 Countries of Export and Import Volumes in 2005 (Unit: thousand ton) Export Import Rank Country Name 1,000 ton % Country Name 1,000 ton % 1 Spain 3,761 12 United States 6,707 15 2 Italy 3,053 10 Russia 4,617 10 3 Turkey 1,932 6 Brazil 3,641 8 4 Saudi Arabia 1,797 6 Ukraine 3,318 7 5 Syria 1,725 5 Argentina 2,906 7 6 United States 1,348 4 Italy 1,644 4 7 Sudan 1,239 4 Canada 1,540 3 8 Jordan 997 3 Australia 1,494 3 9 Yemen 897 3 Belgium 1,136 3 10 Lebanon 805 3 Turkey 1,131 3 - Others 14,074 44 Others 16,554 37 Total 31,627 100 Total 44,688 100 Source: Statistical Book 2005, Egyptian Maritime Data Bank

(2) Current Export and Import Container Flows and Volumes between Egypt and the World General cargo and dry/liquid bulk cargo are generally handled at each port adjacent to production or consumption area of the hinterland. Container cargo is comparatively easy to change from the one port to another in accordance with intentions or requests of shippers or shipping companies. Container movement between Egypt and the world provides information about the allotment of containers among the Egyptian ports. Figure 3.3.2 illustrates the export and import container volumes between Egypt and the regions. Table 3.3.3 shows the top 10 countries for export and import container volumes in 2005. Main origin and destination were Western Europe and Asia. Italy and China were the major export and import partners for container cargoes in Western Europe and Asia, respectively. The container movement between Egypt and China was more active than bulk cargoes. Alexandria & Dekheila Ports handled 90% of the container cargoes exported/imported to/from Italy. This state can be explained by the proximity of Alexandria & Dekheila Ports to Italy and that they are calling ports for the weekly shipping service between Italy and China (using 7 vessels with a round-trip of 49 days). On the other hand, Sokhna Port handled 60% of the container cargoes exported/imported to/from China. Since Sokhna Port is the sole port with modern handling facilities in Red Sea, it is expected to handle more container cargoes from/to China and the other Asian countries.

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Eastern Eastern Western Western North America Europe North America Europe Europe Europe 1 22 97 2 9 216 3 188 5 5 40 Asia 52 Asia 128 48 Arab Arab Central America 0.89 Countries Central America 0.26 Countries 17 7 3 21 2 4 Africa 2 Africa South America South America 2

Others Oceania Others Oceania

Unit: thousand TEU Unit: thousand TEU Export Import Note: The major Egyptian ports for container cargoes includes Alexandria Port, Dekheila Port, Damietta Port, Port Said Port (West), Port Said Port (East) and Sokhna Port. Source: Worked out by JICA Study Team based on Statistical Book 2005, Egyptian Maritime Data Bank Figure 3.3.2 Export and Import Container Volumes (Unit: Thousand TEU)

Table 3.3.3 List of Top 10 Countries of Export and Import Container Volumes in 2005 (Unit: TEU) Export Import Ran k Country Name TEU % Country Name TEU % 1 China 89,303 15 Italy 81,954 14 2 Italy 57,209 10 China 70,099 12 3 Belgium 38,529 6 Belgium 48,442 8 4 United States 36,413 6 United States 45,280 8 5 Singapore 26,713 4 Turkey 26,580 4 6 Turkey 26,512 4 Germany 23,150 4 7 United Kingdom 25,609 4 Spain 22,328 4 8 Saudi Arabia 24,274 4 India 18,312 3 9 Syria 23,595 4 South Korea 17,275 3 10 Spain 20,217 3 Brazil 15,729 3 - Others 298,435 50 Others 230,156 38 Total 664,675 100 Total 597,320 100 Source: Statistical Book 2005, Egyptian Maritime Data Bank

(3) Current Transhipment Container Flows and Volumes via Egyptian Ports The geographic location of Egypt makes the transhipment containers a profitable business for terminal operators, although it has little impact to export and import industries and the national economy. The inbound and outbound transhipment container volumes at major Egyptian ports were 2.4 million TEU in 2005, of which 97% was handled at Port Said, Port East & West and Damietta Port. As shown in Figure 3.3.3, substantial transhipment volumes are observed between Egypt and Asia. The Egyptian ports play the role and function as hub ports among Arab, European, and Asian countries. On the other hand, the Egyptian ports 3-21

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handle few transhipment containers from/to North, Central & South America. Table 3.3.4 shows the top 10 countries for transhipment container volumes in 2005. Turkey was high ranking with both inbound and outbound volumes, as were some of the Asian and European countries.

Eastern Eastern Western Europe Western Europe North America North America Europe 2 504 Europe 1 3 8 9 4 1 5 422 4 8

2 2 18 Asia 3 Asia

Arab Arab 0.56 22 Central America 0 2 Central America 8 Countries 45 Countries 5 0.99 90 51 0. 0. 0 0.5 .46 Africa 1 Africa 0 South America South America 0 Oceania Others Oceania Others

Unit: thousand TEU Unit: thousand TEU Inbound Outbound Source: Worked out by JICA Study Team based on Statistical Book 2005, Egyptian Maritime Data Bank Figure 3.3.3 Transhipment Container Volumes (Unit: Thousand TEU)

Table 3.3.4 List of Top 10 Countries of Transhipment Container Volumes via Egypt in 2005 (Unit: TEU) Inbound Outbound Rank Country Name TEU % Country Name TEU %

1 Malaysia 133,651 11 Turkey 168,756 15 2 Turkey 118,072 10 Israel 127,524 11 3 Israel 115,484 9 Egypt 118,263 10 4 Egypt 104,125 8 China 80,346 7 5 China 85,074 7 Syria 66,360 6 6 Cyprus 70,525 6 Italy 60,278 5 7 Syria 62,457 5 Malaysia 51,954 5 8 Italy 61,163 5 France 48,609 4 9 Sri Lanka 47,007 4 Greece 41,792 4 10 Spain 38,118 3 Cyprus 37,968 3 - Others 400,788 32 Others 349,371 30 Total 1,236,464 100 Total 1,151,221 100 Note: Total figures of “Inbound” and “Outbound” are different in the table: however, these are the formal figures appeared in the data source below. Difference is statistical errors, and is kept as they are. Source: Statistical Book 2005, Egyptian Maritime Data Bank

In order to classify the transhipment container movement with focus on the Mediterranean Region and Suez Canal, seven sub-regions can be classified as shown in Table 3.3.5. Based on the sub-region classification, the inbound and outbound transhipment container movements are illustrated in Figure 3.3.4.

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Considering the high transhipment volumes by country in Table 3.3.4 and the strong interrelationship between Egypt and Middle East in Figure 3.3.4, the Egyptian ports (Port Said Port East & West and Damietta Port) serve transhipment containers from/to Turkey, Syria, Cyprus and Israel as a main gate to connect with Asia – Europe route. With regard to East-Europe and Black Sea sub-regions, the transhipment container volumes through the Egyptian ports are significantly low. This may be due to transhipment by other competitive ports such as Gioia Tauro Port in Italy. The transhipment container volume through Suez Canal from south to north is higher than that from north to south. This tendency corresponds with the total cargo volumes through Suez Canal by direction in recent years.

Table 3.3.5 Sub-Region Classification Sub-Region Country West-Europe France, Italy, Spain, Malta Greece, Slovenia, Croatia Bosnia & Herzegovina, Serbia, East-Europe Montenegro, Albania Black Sea Ukraine, Romania, Bulgaria, Russia, Georgia Middle East Turkey, Cyprus, Syria, Lebanon, Israel North-Africa Algeria, Tunisia, Morocco, Libya Countries through Suez Arab, Asian, East & South African and Oceania countries Canal Other Countries Other European, North, Central & South American and West African countries Source: JICA Study Team

Black Sea Black Sea West-Europe West-Europe

East-Europe East-Europe

2 4 111 8 Middle East 53 2 Middle East Other Other

14 3 151 4

3 2 8 4 Countries 7 Countries 2 9 31

1 1

North Africa North Africa

3 4 3 3 2 3

Countries through Countries through Unit: thousand TEU Suez Canal Unit: thousand TEU Suez Canal Ci Inbound Outbound Note: Some shipping services between Egypt and West-Europe are operated through the Strait of Gibraltar. Source: Worked out by JICA Study Team based on Statistical Book 2005, Egyptian Maritime Data Bank Figure 3.3.4 Transhipment Container Volumes by Sub-Region

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3.3.2 Current Freight Flows and Volumes in Egypt (1) Export and Import Volumes by Handling Type In 2005, export and import volumes at the major ports in Egypt reached 31.6 million tons and 44.7 million tons respectively. Of the total exports, 39% was exported from the Great Alexandria Port (Alexandria & El-Dekheila Port), which is the highest, followed by Damietta Port, which has a share of 27%. Regarding imports, 63% are imported at the Great Alexandria Port, which is the highest, followed by Damietta Port, which has a share of 20%. As shown in Table 3.3.6, dry bulk is the highest for both export and import followed by general cargo. The share of container is about 15% for both export and import, which are mainly handled at Great Alexandria Port, Damietta Port, Port Said Port and Sokhna Port. Table 3.3.6 Handled Local Cargo(*) at Egyptian Ports in 2005 (Export) (Unit: 1000 ton/year) General Dry Liquid Special Port Container Total Share Cargo Bulk Bulk Cargo Alexandria & 1,905 3,702 4,163 2,195 216 12,181 38.5% El-Dekheila Damietta 872 3,410 182 778 3,124 8,366 26.5% Port Said & East 56 197 23 806 2 1,084 3.4% Port Said Suez & Adabiya 1,059 1,757 0 30 60 2,906 9.2% Sokhna Port 583 1,222 0 793 0 2,598 8.2% El-Arish 1 1,482 0 0 0 1,483 4.7% Safaga 233 1,216 6 0 29 1,484 4.7% Nuwaiba & 468 999 0 0 58 1,525 4.8% Others Total 5,177 13,985 4,374 4,602 3,489 31,627 100.0% Share 16.4% 44.2% 13.8% 14.6% 11.0% 100.0% -

(Import) (Unit: 1000 ton/year) General Dry Liquid Special Port Container Total Share Cargo Bulk Bulk Cargo Alexandria & 8,382 11,736 705 4,265 3,074 28,162 63.0% El-Dekheila Damietta 2,373 5,001 15 684 972 9,045 20.2% Port Said & East 33 1,116 155 758 8 2,070 4.6% Port Said Suez & Adabiya 1,946 93 6 25 1,078 3,148 7.0% Sokhna Port 3 5 12 823 0 843 1.9% El-Arish 0 8 0 0 0 8 0.0% Safaga 67 1,107 19 0 112 1,305 2.9% Nuwaiba & 97 8 0 0 2 107 0.2% Others Total 12,901 19,074 912 6,555 5,246 44,688 100.0% Share 28.9% 42.7% 2.0% 14.7% 11.7% 100.0% - (*) Transit Cargo is not included. Source: Statistical Yearbook 2005, Egyptian Maritime Data Bank (EMDB)

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(2) Export and Import Volumes by Commodity Type By commodity type, the most exported commodity is cement, which has a share of 26%, followed by gaseous hydrocarbons, which has a share of 11%. For imported commodities, wheat occupied the top position (14%), closely followed by maize, which has a share of 12%. The share of other commodities (referred to as “others”) is 38% for export and 41% for import.

Table 3.3.7 Top 9 Cargos(*1) at Egyptian Ports in 2005 (Unit: 1000 ton/year) Export Import Rank Commodity Type Volume Share Commodity Type Volume Share 1 Cement 8,234 26.0% Wheat 6,266 14.0% Gaseous 2 Hydrocarbons, Liquid 3,340 10.6% Maize 5,282 11.8% or Compressed Phosphates, Crude, Other Basic 3 1,794 5.7% 4,680 10.5% Natural Chemicals(*2) Railway or Tramway Sleepers of Woods and 4 Gasoline 1,357 4.3% 2,048 4.6% Other Wood Roughly Squared, Half Squ 5 Salt, Crude or Refined 1,238 3.9% Iron ore and Concentrates 2,028 4.5% Oil-seed Fats, Oil nuts and 6 Rice 1,071 3.4% 1,722 3.9% Oil Kernels Sand for Industrial Gaseous Hydrocarbons, 7 973 3.1% 1,644 3.7% Use Liquid or Compressed Building and Pig iron, Spiegeleisen and 8 Monumental Stone, 925 2.9% Carburized 1,486 3.3% Unworked Ferro-manganese Animal and Vegetable Fats Semi-finished Rolled 9 560 1.8% and Oils, and Products 1,314 2.9% Steel Products Derived Therefrom 10 Others(*3) 12,135 38.4% Others(*3) 18,218 40.8% Total 31,627 100.0% Total 44,688 100.0% (*1): Transit Cargo is not included. (*2): Other basic chemicals include a large group of chemicals such as, e.g., plastics, fibers, resins, and dyestuffs - and the industrial chemicals. (*3): “Other manufactured goods, which are not classified according to type” is in 3rd place for export and by 4th place for import in the Statistical Yearbook 2005, but this can’t be classified as one of commodity type. Therefore, this is handled partially of “Others”. Source: Statistical Yearbook 2005, EMDB

(3) Export and Import Volumes by Commodity Type by Major Port Table 3.3.6 shows export and import volumes by handling type at each port, while Table 3.3.7 shows only the total of export and import volumes. Export and import volumes by commodity type at each port were estimated from these tables based on the assumption that the share of each port by handling type was the same for all commodity type. To calculate this estimation, it was necessary to assume the composition of the handling types for each commodity. Table 3.3.8 shows the handling types by commodity type. Export and import volume by handling type were estimated for each commodity type from the table.

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Table 3.3.8 Relation between the Handling Types and the Commodity Types in 2005 (Export) Volume Dry Liquid Conventional Rank Commodity (1000 Bulk Bulk Cargo (*) ton/year) 1 Cement 8,234 97% 3% Gaseous Hydrocarbons, Liquid or 2 3,340 100% Compressed 3 Phosphates, Crude, Natural 1,794 100% 4 Gasoline 1,357 76% 24% 5 Salt, Crude or Refined 1,238 100% 6 Rice 1,071 97% 3% 7 Sand for Industrial Use 973 100% Building and Monumental Stone, 8 925 100% Un-worked 9 Semi-finished Rolled Steel Products 560 100% 10 Others 12,135 100% Total 31,627 13,986 4,374 13,267

(Import) Volume Dry Liquid Conventional Rank Commodity (1000 Bulk Bulk Cargo (*) ton/year) 1 Wheat, Spelt and Muslin 6,266 100% 2 Maize 5,282 100% 3 Other Basic Chemicals 4,680 86% 14% Railway or Tramway Sleepers of 4 Woods and Other Woods Roughly 2,048 100% Squared, Half Squ Iron ore and Concentrates; except 5 2,028 100% Roasted Iron Pyrites Oil-seed Fats, Oil Nuts and Oil 6 1,722 53% 47% Kernels Gaseous Hydrocarbons, Liquid or 7 1,644 100% Compressed Pig Iron, Spiegeleisen and Carburized 8 1,486 100% Ferro-manganese Animal and Vegetable Fats and Oils, 9 1,314 100% and Products Derived There from 10 Others 18,218 100% Total 44,688 19,074 912 24,702 (*) Conventional cargo consists of “General cargo”, “Container” and “Special cargo”. Source: Estimated by JICA Study Team based on the data from EMDB.

Export and import volumes by commodity type each port were calculated as following formula, and the result is summarized in Table 3.3.9.

V pc = ∑(Z ch × w ph ) h where, Vpc = Export/Import volume of commodity type c at port p, Zch = Export/Import volume of commodity type c by handling type h, and wph = Share of port p by handling type h.

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Table 3.3.9 Export and Import Volumes by Major Port and Commodity Type in 2005 (Export) (Unit: 1000 ton/year) Hydro Steel Port Cement Phosphates Gasoline Salt Rice Sand Stone Others Total Carbons Products Alexandria & 2,193 3,180 475 1,089 328 285 257 245 182 3,947 12,181 El-Dekheila Damietta 2,033 139 438 159 302 264 237 226 201 4,367 8,366 Port Said 128 17 25 27 18 17 14 13 37 788 1,084 East & West Suez & 1,025 0 225 28 155 133 122 116 49 1,053 2,906 Adabiya Sokhna Port 723 0 157 33 108 94 85 81 58 1,259 2,598 El-Arish 850 0 190 0 131 111 103 98 0 0 1,483 Safaga 701 4 156 8 108 91 85 80 11 240 1,484 Nuwaiba & 581 0 128 13 88 76 70 66 22 481 1,526 others Total 8,234 3,340 1,794 1,357 1,238 1,071 973 925 560 12,135 31,627

(Import) (Unit: 1000 ton/year) Other Railway Oil Animal and Iron Hydro Pig Port Wheat Maize Basic Sleepers Seed Vegetable Others Total Ore Carbons Iron Chemicals of Woods Fats fats Alexandria & 3,855 3,250 2,894 1,304 1,247 1,221 1,046 914 836 11,596 28,163 El-Dekheila Damietta 1,643 1,385 1,161 334 531 147 268 390 214 2,972 9,045 Port Said 366 309 256 66 119 181 53 87 43 590 2,070 East & West Suez & Adabiya 30 26 102 253 10 106 203 7 162 2,248 3,147 Sokhna Port 2 1 23 68 1 39 55 0 44 609 842 El-Arish 3 2 2 0 1 0 0 1 0 0 9 Safaga 364 307 238 15118 25 12 86 10 132 1,306 Nuwaiba & 3 2 4 8 1 3 7 1 5 72 106 Others Total 6,266 5,282 4,680 2,048 2,028 1,722 1,644 1,486 1,314 18,218 44,688 Source: Estimated by JICA Study Team based on the data from EMDB

(4) Export and Import Volumes by Transport Mode Table 3.3.10 shows the transport modes used for export and import. The volume transported by railway and inland waterway is obtained by analyzing the operation data of ENR and RTA in 2005. The volume transported by trucks is calculated by deducting the volume transported by railway and inland waterway from the total volume. As seen in the same table, trucks have the dominant role and captured around 91% with the remaining 9% shared by railway and IWT. Table 3.3.10 Export and Import Volumes by Transport Mode in 2005 (Unit: 1000 ton/year) Mode Export Import Total Share Railway 1,944 4,923 6,867 9.0% Inland Waterway 46 199 245 0.3% Truck 29,637 39,566 69,203 90.7% Total 31,627 44,688 76,315 - Source: Calculated by JICA Study Team based on the data from EMDB, ENR and RTA data.

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(5) Freight Movement of Export and Import in Egypt To analyze the freight movement of export and import in Egypt, Origin – Destination (OD) Matrices by commodity type and transport mode were estimated by identifying the origin and destination of exported and imported commodities in Egypt. In case of export, an origin is the starting point of a transport for export while a destination is the port where the transported commodities are exported. On the other hand, an origin of a transport for import is the port where the transported commodities are imported and a destination is the end point of the transport. The OD matrices of railway and inland waterway were estimated form the ENR’s and RTA’s operation data. On the other hand, the OD matrices of truck were estimated from various sources and assumptions. Production and consumption data in “A Study on the Development of the Master Plan for Freight Organization at National Level (Technical Consultant Bureau, June 2005)” was the major source and the result of the Shipper Survey was used. To make the OD matrices of truck, the total exported volume from each origin and the total imported volume to each destination were estimated. After that, gravity model and Fratar Method3 were applied to estimate the volumes of each OD pair. The detail process of making OD matrices are described in Appendix-3. The followings are the estimated transport flow of major commodity types.

a) Cement Cement is the prime export commodity of Egypt and 8.2 million tons of cement is exported; mostly transported by trucks. The largest volume of cement is exported from Sokhna Port followed by , Damietta Port and Alexandria Port with volumes of 0.9, 0.8, 0.7, 0.5 million tons respectively. Some is generated from Asyout and others as shown in Figure 3.3.5. b) Gaseous Hydrocarbon Gaseous hydrocarbon is a general term for various organic chemical compounds of carbon and hydrogen such as methane, ethylene, acetylene, etc. Export and import volumes of gaseous hydrocarbons in year 2005 were 3.3 million tons and 1.6 million tons respectively and ranked in 2nd and 7th place respectively. It can be presumed that the different kinds of gaseous hydrocarbons are transported via trucks. Most of them are exported and imported at Alexandria Port and mainly delivered to and from and surrounding industrial zones as well as Alexandria Governorate as depicted in Figure 3.3.6.

3 This method is used to extrapolate trip distribution on the basis of growth factors for both the origin and the destination.

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DamiettaDamietta 238238 238238 PortPort SaidSaid 452452 PortPort SaidSaid 421421421 AlexandriaAlexandria 516516 660660 334334334 109109 298298298 257257 236236236 861861861SuezSuez 154154 795795 SokhnaSokhna 176176176 121121 121121 PortPortPort 362362362

333333 174174

151151151

122122

217217

SafagaSafaga Unit: 1,000 ton/year Major movement (over 100,000 ton/year) is displayed.

Source: Estimated by JICA Study Team Figure 3.3.5 Cement Export Flow in 2005 (Truck)

DamiettaDamietta

1,1891,189 PortPort SaidSaid AlexandriaAlexandria 112112

741741 616616616 678678678 264264264 SuezSuez

Unit: 1,000 ton/year SokhnaSokhna Major movement (over 100,000 PortPortPort ton/year) is displayed.

Source: Estimated by JICA Study Team Figure 3.3.6 Gaseous Hydrocarbon Export & Import Flow in 2005 (Truck) c) Phosphates Egypt exports 1.8 million tons of phosphates a year. They are mainly produced in and most of them are transported by railway to Safaga Port. Those volumes handled by trucks are mainly delivered to the major ports of Egypt as illustrated in Figure 3.3.7.

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DamiettaDamietta DamiettaDamietta AAlexandrialexandrialexandria PortPort SaidSaid AAlexandrialexandrialexandria PortPort SaidSaid

245245 SuezSuez SuezSuez

SokhnaSokhna 107107 SokhnaSokhna 256256 PortPortPort PortPortPort

123123 130130

SafagaSafaga SafagaSafaga 2828

Unit: 1,000 ton/year Unit: 1,000 ton/year 762762 Major movement (over Major movement (over 100,000 ton/year) is 100,000 ton/year) is displayed. displayed.

(Truck) (Railway) Source: Estimated by JICA Study Team Figure 3.3.7 Phosphates Export Flow in 2005 d) Wheat Egypt imports 6.3 million tons of wheat a year, which is the highest volume among the imported commodities. Trucks transport 5.0 million tons and the remaining 1.3 million tons is transported by railway. The major ports for the import are Alexandria Port and Damietta Port. As seen in Figure 3.3.8, wheat arriving at Damietta Port is mostly transported by railway. Wheat at the Alexandria Port on the other hand is mostly carried by trucks. For instance, 1.8 million tons of wheat is transported from Alexandria Port to Cairo Governorate by trucks and 0.5 million tons are transported from Damietta Port to Cairo Governorate by railways. e) Maize Egypt imports 5.3 million tons of maize, which is ranked in 2nd place. The major import port is Alexandria Port followed by Damietta Port. 1.0 million tons of maize is delivered to Cairo Governorate and 0.6 million tons are to Alexandria Governorate. Besides the 0.2 million tons of maize from Alexandria Port, 0.1 million tons of maize is delivered to Qena Governorate from Safaga Port.

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT

DamiettaDamietta DamiettaDamietta nnndriadriadria nndriadriadria nnndriadriadria PortPort SaidSaid nndriadriadria PortPort SaidSaid 149149 2525 272727 1212 107107 117117 417417 479479 202202 6363 2020 1,7991,799 2020 353353 SuezSuez 7474 SuezSuez

SokhnaSokhna SokhnaSokhna 1919 SokhnaSokhna PortPortPort PortPortPort 1212 PortPortPort 1313 2020 139139 1919 1212 1919 1515 1313

117117

SafagaSafaga SafagaSafaga SafagaSafaga Unit: 1,000 ton/year SafagaSafaga Major movement (over 100,000 Unit: 1,000 ton/year ton/year) is displayed. Major movement (over 100,000 ton/year) is displayed. (Truck) (Railway) Source: Estimated by JICA Study Team Figure 3.3.8 Wheat Import Flow in 2005

DamiettaDamietta AlexandriaAlexandria 144144 AlexandriaAlexandria PortPort SaidSaid 575575 104104 196196 125125 114114 107107 282282 385385 986986 209209 162162 162162 SuezSuez

SokhnaSokhna PortPortPort

Unit: 1,000 ton/year SafagaSafaga 108108 Major movement (over 100,000 ton/year) is displayed.

Source: Estimated by JICA Study Team Figure 3.3.9 Maize Import Flow in 2005 (Truck)

f) Other Basic Chemicals For the other basic chemicals, 4.7 million tons is imported into Egypt, making it the third most imported commodity category in terms of volume. Out of which, 4.6

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million tons are transported by trucks, and the remaining 0.1 million ton is shipped via inland waterway. The destination of those arriving at Alexandria Port, which receives a volume of 2.5 million tons, is the Alexandria Governorate. Commodities arriving at Damietta Port, which total 0.3 million ton, are delivered to the . The industrial city of 10th of Ramadan received 0.3 million tons from Damietta Port, as shown in Figure 3.3.10.

DamiettaDamietta

240240 PortPort SaidSaid AlexandriaAlexandria 2,4822,4822,482 342342

219219219 142142 125125125 101101101

Unit: 1,000 ton/year SuezSuez

Major movement (over 100,000 ton/year) is displayed. SokhnaSokhna Source: Estimated by JICA Study Team PtPt Figure 3.3.10 Other Basic Chemicals Import Flow in 2005 (Truck)

(6) Current Traffic Volume by Transport Mode Figure 3.3.11, 3.3.12 and 3.3.13 show the current traffic volume of export and import on the major networks of each transport mode. They were estimated by assigning of the OD matrices. a) Truck The traffic volume of export and import is largest on the road in the east side of Alexandria Port with 25 million tons. A volume of 17 million tons of commodities is transported on the – Alexandria section through Cairo Alexandria Agriculture Road, and 11 million tons is transported through the length of the Cairo – Alexandria Desert Road. The traffic volumes on the Cairo – Damietta Agriculture Road and Ismailia - Port Said Road are 10 million tons and 5 million tons respectively. Along the corridor between Cairo and Upper Egypt, 11 million tons is transported by road. The traffic volume is 5 million tons on the road between Cairo and Suez. b) Railway The railway section transporting the largest volume of export and import is around Cairo, and 4 million tons is transported annually. Focusing on directions, the traffic volume between Cairo and Alexandria is 3 million tons while between Giza Rural area and Cairo, the traffic volume is 2 million tons. Transport between Cairo and Suez Port - Sokhna Port is made via – Ismailia because there is no direct freight railway connection at the moment. Consequently, the transport volume between Zagazig and Ismailia is particularly large totaling 2 million tons.

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c) Inland Waterway Transported volume by inland waterway between Alexandria Port and Cairo is less than 0.1 million ton and between Alexandria and Upper Egypt is much less. There is no transport by inland waterway through Damietta Branch at present. Completion of the on-going works by RTA is expected to activate this IWT route.

11,,,55 555522 22 11,,, ,,,555522 ,,,5555 DamiettaDamietta 11,,, 5522 222 555555 6677 ,,,555 ,,,7766 111 99,,,77 44 44,,,33 ,,,3399 777 9944 5522 666 222 ,,,5555 777 222888 11,,, ,,,777 ,,,222 999 777 AlexandriaAlexandria ,,, 999 777 PortPort SaidSaid AlexandriaAlexandria 555 111 PortPort SaidSaid 555 111 222 11 111 111 9911 111 222 99 222 5599 ,,, , ,, ,,,55 , ,, ,,,55 ,,, , ,, 11,,, ,,,555 4 4 4 11 555 4 4 4 11 11 555 444 4 4 4 888 999 111 444 888 1166 999 111 444 66 999 , , , 000 66,,, 11 , , , 000 ,,, 11 111 222 , , , 000 ,,,77 9911 111 222 2 2 2 777 44 99 111 222 2 2 2 777 7744 99 2 2 2 ,,,777 4433 55 555 ,,, 33 ,,,5 888 1 1 1 5 1 111 ,,, ,,5,55 888 1 1 111 11,,, ,,, 888 1 1 1 ,,,33 111 ,,, 7 7 7 11,,,33 111 999 ,,, 7 7 7 11,,, 44 111 999 7 7 7 11 2244 111 999 ,,77,7 8822 000 777 88 000 999 ,,, 999 ,,, 111 444 11,,,338888 888 111 2299 444 11,,,338888 888 444 11,,,442299 888 444 4 4 4 888 ,,, 4 4 4 44 888 ,,,666 4 4 4 2244 444 666 , , , 22 444 , , , 8822 444 777 , , , 88 777 2 2 2 88 777 2 2 2 777 2 2 2 777 777 44 777 1 1 1 882244 1 1 1 882244 666 22 1 1 1 8822 666 2200 22 7 7 7 0055 7 7 7 77 444 55 7 7 7 77,,,22 ,,4,44 ,,,2222 ,,, 2255 666 222 333 55 666 222 333 000 666 33 000 666 33 666 44 4 33 111 555 666 44 4 3300 111 555 111 ,,6,66 44 4 3 3 3 111 88 111 ,,, 00 3 3 3 66 8888 111 ,,, 3 3 3 88 1188 888 , , , 666 66,,, 1188 888 444 , , , ,,,99 444 , , , 6 6 6 11 888 111 666 ,,, 444 66 6 111 99 66 6 111 6 6 6 99 888 6 6 6 333 77 888 66 6 000 333 7733 888 000 66 6 1 1 1 33 000 1 1 1 33 66 6 66 6 ,,, 1 1 1 ,,, 33 3 888 33 3 888888 33 3 888 777 666 444 777 666,,, 444 ,, , ,,, 333300 ,,6,66 999 33 00 999 6 66 3300 666 999 333 6 66 666 777 333 6 66 3333 44 111 777 3300 44 111 777 , 6 66 333300 11 66 ,, 6 66 00 441155 111 333 66 554466 ,,, 6 66 55 444 333 66 5544 888 222 111 444 4466 222 55 5 111 66 888 55 5 111 444 66 44 333 55 5 111 3 33 33 55 000 333 888 111 3 33 33 000 333 111 3 33 33 55 000 888 ,,, 111 000 ,,, 99 9 111 000 ,,,222 99 9 ,,, 000 222 99 9 ,,, 1 1 1 111 111 1 1 1 111 111 1 1 1 111 444 3 3 3 666 444 3 3 3 666 3 3 3 666 444 666 , , , , , , 666 , , , 00 3 3 3 0 0 0 88 3 3 3 0 0 0 66 88 00 555 00 3 3 3 555 0 0 0 00 66,,, 3388 555 ,,, 33 , , , 4 4 4 00 00 11 999 ,,, 11 , , , 4 4 4 00 00 ,,, 999 4 4 4 00 ,,11 , , , , 2 999 99 ,,, 2 2 99 11 2 2 2 8 8 8 11 99 2 2 2 333 8 8 8 8 8 8 55 11 333 8 8 8 8 8 8 55 11 8 8 8 55 11 333 8 8 8 11 4 4 4 8 8 8 00 8 8 8 00 4 4 4 88 00,,, 4 4 4 88 ,,, 33 0 0 0 77 33 0 0 0 ,,,77 0 0 0 666 33 0 0 0 77 0 0 0 11 55 99 0 0 0 666 11 6655 , , , ,,,11 666655 9933 , , , ,,, 6666 33 , , , 11,,, 66 3 3 3 11 111 3 3 3 111 3 3 3 333 000 1 1 1 333 000 1 1 1 333 000 1 1 1 ,,,777 995555 ,,, 777 995555 222 999 888 333 777 888 333 00 777 000 6 6 6 000 6 6 6 0000 777 000 6 6 6 ,,,5500 777 55 22 6 6 6 33,,, 22,,,11 6 6 6 111 22,,,113333 6 6 6 33 111 ,,,113333 55 55 55,,,33 55,,, 5 5 5 ,,, 55 33 5 5 5 1 222 553333 ,,, 11 222 ,,,333311 55 ,,,3333 5 5 5 111 222 3311 55,,,33 3311 ,,, 999 ,,,333311 11 ,,,555 999 3311 555 555 999 311 555 11 555555 777 ,,, 11,,, 555 777 ,,,333 11,,,55 333 777 333333 ,,,555533 333 8855 22 333111 5533 1 ,,,3388 00 ,,,88 111 1 55,,, 4455 55 55 33,,, 999 3 3 3 33 33 999 33 3 3 3 33,,,333322 999 33 3 3 3 33 22 445533 3322 444 555 ,,,4455 , , , 444 ,,, , , 555 44 , 444 11 , , 555 11,,, , 333 SuezSueSuez z 9 9 9 444 SuezSueSuez z 1 9 1 9 9 333 SuezSueSuez z 444 333 111 9 9 9 444 333 111 ,,, ,,, 333 11 4 1 4 4 ,,3,33 ,,, 4 4 4 333 222 4 4 4 333 222 333 333 000 0 0 0 333 333 00 000 0 0 0 333 0 0 000 000 0 0 222 333 ,,0,00 444 222 333 ,,, 444 555 111 555 111 999 33 999 33 ,, , 333 33,,,33 ,,, 333 ,,,3333 LEGEND 333 33 3 ,,, 22 333 ,,9,99 22 999 444

444 3 3 3 111 3 3 3 111 000 3 3 3 111 000

5 5 5

222 5 5 5

222 5 5 5 222 000 000 000 000 66 6 000 3 3 3 SokhnaSokhna 444 ,,, 3 3 3 666 SokhnaSokhna 444 66 6 , ,, 3 3 3 SokhnaSokhna ,,, 444 4 44 999 , , , 4 44 111 99 9 999 , , , 4 44 111 99 9 , , , 999 9 9 9 111 99 9 , , , 9 9 9 , , 9 9 9 , , , 99 9 333 6 66 99 9 333 6 66 , , , 6 66 333 4 4 4 , , , 333 4 4 4 , , , 555 1 11 333 4 4 4 555 1 11 4 44 PortPortPort 555 1 11 4 44 22 2 0 0 0 PortPortPort 4 44 PortPortPort 222 >= 10,000 0 0 0 , , , 22 2 , , , , , , 0 0 0 , , , , , , , , , 00 0 00 0 66 6 00 0 66 6 66 6 22 2 22 2 22 2 11 1 11 1 11 1

>= 5,000 0 0 0 111 0 0 0 111 0 0 0

4 4 4 333 222 4 4 4 333 222 4 4 4 333

9 9 9 555 9 9 5 000 9 000 9 9 9 555

000 , , ,

, ,, , , ,

, ,, 000 , , , , ,, 000 111 3 3 3

3 3 3

>= 1,000 3 3 3 111 444 444 ,, 0 , 0 0 0 0 0 , ,, 0 0 0 555 555 0 000 333 < 1,000 777 000 333 777 000 555 555 222777 000 555 555 222 444 999 ,,9,99 ,,, 333 333 333 333 555 3 33 555 55 5 000 555 4,505 4,505 4,505

Unit: 1,000 ton/year 555 4,505 4,505 4,505

555 4,505 4,505 4,505 666 ,,5,55 666 444 888 444 777 555 777 ,,5,55 222 ,,, 222 777

5 5 5 5 5 5

5 5 5

3 3 3

3 3 3 Source: Estimated by JICA Study Team Figure 3.3.11 Current Traffic Volume by Truck

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT

DamDamietta ie tt a

776699 0000 00 00 00 00 00 000 00 00 999 000 666 000 000 666 11 AlexandriaAlexandria 88 000 777 8811 AlexandriaAlexandria 1188 000 777 8811 AlexandriaAlexandria 7711 777 777 6688 PortPort SaidSaid 777111 111 000 888 000 33 6 6 6 888 7733 6 6 6 88 6 6 6 8877 00 00 4 4 4 00 00 4 4 4 222 00 00 4 4 4 22 77 00 222 7711 7 7 7 11 333 00 7 7 , , 118 7 , 18 00 7 7 7 00 ,, , 88 88 333 , , , 8 , , 88 , , , 666 88 , , , 666 88 777 666 88 777 2 2 2 444 00 2 2 2 00 2 2 2 444 666 888 00 681 6 444 666 888 681 681 6 681 666 888 1 1 1 681 6 444 222 888 1 1 1 681 22 444 222 222 888 1 1 1 0022 444 222 222 888 81

2 81 2 6 2 6 222 888 6

00 888 81 1100 ,,, 22 6 6 6 11 ,,,666 888 6 6 6 66 333 0 0 0 66 0 0 22 0 00 0022 444 8855 222333 0 0 0 00 00 1100 444 55 777 55 5 55 5 0022 55 5 00 88 8 1100 88 8 11 88 8 110022 110022 11 22,,,664444 22 1100 22,,,6644 22 444 1155 22,,, 22 222 5555 ,,,6644 662222 777 4444 666 44 666 111 333 555 333 555 1 1 1 555 1 1 1 555 1 1 1 666 22 555 8 8 8 666 2 8 222 555 8 8 666 222,,, 777799 8 8 8 888 ,,, 666 7799 6 6 6 888 ,,,666 111 666 6 6 6 666 111 666 77 666 6 6 6 111 666444 000 7777 666 111 444 000 7799 666 444 1 1 1 99 666 444 1 1 1 333 99 111 444 1 1 1 111 333 111 11 1 11 1 11 1

888 8 88 33 66 6 33 66 6 666 33 33 66 6 666 33 33 9933 ,,,559933 11 000 44 9933 11,,,559933 11,,,55 111 11 000 ,,,44 5599 11,,,559 11 111 333 11 ,,,55 ,,, 0 0 0 333 11 ,,, ,,, 0 0 0 ,,, 222 0 0 0 11 222 11 000 00 000333 00 6 6 6 333 6 6 6 333 6 6 6

0 0 0

0 0 0 0 0 0 44

4 4 4 2 2 2 44 4 4 4 0 00 2 2 2 55 4 4 4 0 00 55 0 00 2 2 2 6655 4 4 4 66 4 4 4 4 4 4 44 6 6 6

44 3 3 3 6 6 6 55

6 6 6 55 3 3 3

3 3 3 , , , 6655 , , , 66 , , , 66 6 66 000 6 6 6 0 0 0 000 66 6 0 0 0 2 2 2 000 0 0 0

2 2 2

2 2 2 0 00 0 00 2 2 2

0 00 2 2 2

2 2 2

, , ,

22 2 , , ,

, , , 11 2 2 2 22 2 11,,, 1 1 1 ,,,22 1 1 1 00 222 1 222 1 1 220033 ,,, 000 33 ,,6,66 000 666 1 1 1 666 1 1 1 444 1 1 1 111 444 , , , , , , ,,, 444 , , , ,,, 2 2 2 ,,, 444 2 2 2 00 222 2 2 2 00 00 222 5 5 5 00 00 000 5 5 5 000 5 5 5 00 00 000 00 00 333 6 6 6 6 6 6 00 6 6 6 6 6 6 333 6 6 6 6 6 6 00 5 5 5 00 5 5 5

5 5 5

2 2 2

2 2 2

2 2 2 0 0 0

, , , 0 0 0

, , , 0 0 0 00 , , , 00

1 1 1

1 1 1 1 1 1 00

99 3 3 3 99 3 3 3 003399 22,,,004400 3 3 3 00 22,,,004400 , , , 444 ,,, 22,,,004400 , , , 444 SuezSueSuez z ,,,00 777 , , , 777 444 SuezSueSuez z 22,,, 0 0 0 SuezSueSuez z 22 777 0 0 0 22 0 0 0 777 777 777 8 8 8 777 8 8 8 777 8 8 8 777 444 777 8 8 8 444 8 8 8 8 8 8 888 888 444 444 000 0 00 ,0, 0,0 111 7 111 77 , , , 111 777 ,,, 777 111 ,,, 777 LEGEND 1 11 ,0,0,0 777 111 000 444 444 444 444 888 888 888 888 444 444 444 7 7 7

7 7 7 7 7 7 SokhnaSokhna 000 SokhnaSokhna 000 7 7 7 SokhnaSokhna 000 , , , 7 7 7 , , , 7 7 7 , , ,

4 4 4

111 4 4 4 >= 10,0002,000 111 4 4 4 PortPortPort

888 888 1 1 1 444 1 1 1 444 1 1 1 444

, , , 000 , , , 000 , , , 000 0 0 0 >= 5,000 , ,, 0 0 0 1,000 , ,, 0 0 0 , ,,

4 4 4 111 4 4 4 111 4 4 4

8 8 8

8 8 8 >= 1,000 500 8 8 8 < 1,000 500 777 555 999

111 Unit: 1,000 ton/year 555 888

5511 8855 Source: Estimated by JICA Study Team Figure 3.3.12 Current Traffic Volume by Railway

DamiettaDamietta

0 0 0

0 AlexandriaAlexandria 0 0 PortPort SaidSaid 91 0 0 1 9 9 0 1 0 0 9 0 1 0 91 0 0 0 91 9 1 0 0 9 1 0 91 0 0

9

1 0

0 0 1 9 9 0 1 0 0 0 0 1 0 9 91 0 0

0 0

91

1 9

5 8 SuezSueSuez z 5 SuezSueSuez z

8

LEGEND 8 5

5 8

8 5 SokhnaSokhna 5 SokhnaSokhna 8 >= 10,000 PortPortPort 75 8 5 5 >= 5,00050 8 8 >= 1,00025 5 8 < 1,00025 5 8 5 Unit: 1,000 ton/year 58 8 5 8 5 Source: Estimated by JICA Study Team Figure 3.3.13 Current Traffic Volume by Inland Waterway

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3.3.3 Future Freight Flows and Volumes for Export and Import in Egypt (1) Export and Import Volumes in 2022 by Commodity Type The ratios of export and import volumes in 2022 to that of 2005 were estimated using CAPMAS database. Generally, the increase in export and import volumes is proportional to the increase in GDP and population. Therefore, growth ratios of major export and import commodities were projected based on the analysis of the export and import data with GDP and population. The CAPMAS database was used for the data over the past 10 years. The future (2022) export and import volumes were calculated by multiplying the current (2005) export and import volumes by the projected growth ratios. Table 3.3.11 shows the result of the projection. The details of the projection are described in Appendix-3.

Table 3.3.11 Export and Import Volumes(*) in 2022 by Commodity Type (Export) (Unit: 1000 ton/year) Growth Rate Rank Export Commodity 2005 2022 (2022/2005) 1 Cement 8,234 2.12 17,456 Gaseous Hydrocarbons, Liquid or 2 3,340 2.71 9,052 Compressed 3 Phosphates, Crude, Natural 1,794 2.12 3,803 4 Gasoline 1,357 2.40 3,256 5 Salt, Crude or Refined 1,238 2.12 2,625 6 Rice 1,071 2.96 3,170 7 Sand for Industrial Use 973 2.12 2,062 Building and Monumental Stone, 8 925 2.12 1,961 Unworked 9 Semi-finished Rolled Steel Products 560 4.89 2,737 10 Others 12,135 2.86 34,705 Total 31,627 2.56 80,829

(Import) (Unit: 1000 ton/year) Growth Rate Rank Import Commodity 2005 2022 (2022/2005) 1 Wheat 6,266 1.38 8,647 2 Maize 5,282 1.38 7,289 3 Other Basic Chemicals 4,680 3.38 15,818 Railway or Tramway Sleepers of 4 Woods and Other Wood Roughly 2,048 2.97 6,083 Squared, Half Squ 5 Iron ore and Concentrates 2,028 3.11 6,307 Oil-seed Fats, Oil Nuts and Oil 6 1,722 2.47 4,253 Kernels Gaseous Hydrocarbons, Liquid or 7 1,644 2.54 4,176 Compressed Pig Iron, Spiegeleisen and Carburized 8 1,486 3.11 4,621 Ferro-manganese Animal and Vegetable Fats and Oils, 9 1,314 3.05 4,008 and Products Derived Therefrom 10 Others 18,218 3.53 64,310 Total 44,688 2.81 125,573 (*) Transit Cargo is not included. Source: Calculated by JICA Study Team based on the data from EMDB and CAPMAS data.

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(2) Cargo Volume at Major Ports Table 3.3.12 shows the shares in cargo volume handled at the major ports in Egypt. Although the share of the volume handled in Alexandria Port accounted for over 50% until 2005, it fell to 40% in 2006. Meanwhile, the share handled in Damietta Port rose to 25%, and the share in Port Said Port and Sokhna Port also rose in 2006. It was assumed that the port shares would be the same in 2022 for the forecast of export and import volume at the major ports. The cargo volumes at ports (2022) were estimated by multiplying the current volumes of each commodity at each port (Table 3.3.9) by the growth rate of each commodity, taking the ratios of export and import volume in 2022 to that of 2005 (Table 3.3.11) into consideration. Since there is an apparent fluctuation of handling volume at each port between 2005 and 2006, preliminary estimation of total cargo volume of each port in 2022 was adjusted by the port share in 2006, which is judged to be the most probable share in 2022 with due consideration of i) fluctuation of cargo volume in 2005-2006 and ii) various port development plans up to 2022. Table 3.3.13 shows the result for the four major ports. It was estimated that 83 million tons would be handled in Alexandria Port, which would have a share of 40%, followed by Damietta Port, which would handle 50 million tons and have a share of 25%. The volume of cargo handled at major ports in Egypt in 2022 will reach 206 million tons, and the growth ratio of handling volume in 2022 to 2005 will be 2.7 times. Among the four major ports, Port Said Port will have the highest growth ratio (4.8 times), followed by Sokhna Port which will have a growth rate of 3.3 times. The growth ratio in Alexandria Port will be 2.1 times which is the lowest among the four major ports. Table 3.3.12 Growth Trend of the Cargo Volume in 4 Major Ports: 2004 - 2006 (Unit: 1000 ton/year) 2004 2005 2006 Major Ports Volume Share Volume Share Volume Share Alexandria & El-Dekheila Ports 34,902 52% 40,344 53% 23,314 40% Damietta Port 14,396 21% 17,411 23% 14,473 25% Port Said Port & East Port Said 3,905 6% 3,154 4% 4,433 7% Sokhna Port 3,261 5% 3,440 4% 3,327 6% Others 11,080 16% 11,966 16% 13,303 22% Total 67,544 100% 76,315 100% 58,850 100% Note: Transhipment is not included. Source: Website of Maritime Transport Sector (www.mts.gov.eg) Table 3.3.13 Future Growth of Local Cargo Volume by 4 Major Ports (Unit: 1000 ton/year) 2005 2022 Growth Rate Major Ports Volume Share Volume Share (2022/2005) Alexandria & El-Dekheila Ports 40,344 53% 82,920 40% 2.1 Damietta Port 17,411 23% 50,059 25% 2.9 Port Said Port & East Port Said 3,154 4% 15,084 7% 4.8 Sokhna Port 3,440 4% 11,483 6% 3.3 Others 11,966 16% 46,856 22% 3.9 Total 76,315 100% 206,402 100% 2.7 Note: Transhipment is not included. Source: Estimated by JICA Study Team

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(3) Demand from the New Industrial Zones The development of the new industrial zones is scheduled at various locations in Egypt. Some of them, especially the two industrial zones (6th of October and 10th of Ramadan) are so large that it is desirable to estimate the demand separately and add to the forecast. For this, the expansion rates were defined to incorporate the additional demand from the industrial zones and were calculated for the two main industrial zones. The expansion rate and the basis of the calculation are described in Appendix 3.

(4) Cargo Handling Volume by Transport Mode The Damietta branch is scheduled to be opened in the near future, and it is expected that a part of the traffic between Damietta Port and each zone transported by truck will shift to the inland waterway. The export and import freight between the Alexandria Port and Upper Egypt including Greater Cairo and 6th of October zones transported by the inland waterway, at present, comprises “Semi-finished rolled steel product”, “Other Basic Chemicals” and “Others”. The modal shares of inland waterway for these commodities are 97%, 4% and 1% respectively (Table 3.3.14). The modal shares along the Damietta Branch were assumed to be the same as those of the inland waterway between Alexandria Port and Upper Egypt. Table 3.3.15 shows the projection of traffic for export and import by inland waterway along Damietta Branch. Table 3.3.14 Modal Share along Alexandria Port and Upper Egypt in 2005 (Unit: 1000 ton/year) Commodity Type Inland Waterway Truck Modal Share Semi-finished Rolled Steel 6.9 0.2 97.2% Product Other Basic Chemicals 5.1 135.8 3.6% Others(*) 78.6 7,352.4 1.1% (*) Others include raw aluminium, molasses and other materials. Source: Calculated by JICA Study Team

Table 3.3.15 Adjustment of Modal Share along the Damietta Branch in 2022 (Unit: 1000 ton/year) Projection of Modal Share of Shifted Volume to Commodity Type Traffic by Truck Inland Waterway Inland Waterway Semi-finished Rolled Steel 5.0 97.2% 4.9 Product Other Basic Chemicals 853.9 3.6% 30.7 Others 16,143.8 1.1% 177.6 Source: Calculated by JICA Study Team

Table 3.3.16 shows the estimated cargo handling volumes by transport mode. After the Damietta Branch opens, some cargo transported by inland waterway will be handled in Damietta Port, but the volume will not be large, The modal share in 2022 will be as almost the same as in 2005.

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Table 3.3.16 Local Cargo Handling Volume(*) by Transport Mode in 2022 and the Modal Share (Unit: 1000 ton/year) Inland Major Ports Truck Railway Total Waterway Alexandria & El-Dekheila Ports 75,190 6,940 790 82,920 Damietta Port 47,221 2,682 156 50,059 Port Said Port & East Port Said 14,167 917 0 15,084 Sokhna Port 10,701 782 0 11,483 Others 42,300 4,556 0 46,856 Total 189,579 15,877 946 206,402 Modal Share (%) in 2022 91.8% 7.7% 0.5% 100.0% Modal Share (%) in 2005 90.7% 9.0% 0.3% 100.0% (*) Transit Cargo is not included. Source: Estimated by JICA Study Team

(5) Future Freight Movement of Export and Import in Egypt (2022) Cargo volumes at ports in 2022 were estimated as described above. The transport volumes from origins for export and those to destination for import were estimated from the current volumes and the growth ratios of commodities. The OD matrices in 2022 were estimated from the future volumes and current OD matrices applying the Fratar Method. Refer to Appendix-3 for the detail process of the estimation Figure 3.3.14 shows the transport volume flow by all modes on the spider network4 in 2022. This figure shows the section with the highest transport volume, i.e. the section that will be the most important. The largest volume will be transported between Alexandria Port and Cairo, the second largest will be between Damietta Port and Cairo, and the third will be between Cairo and Upper Egypt. Therefore, Upper Egypt – Cairo – Alexandra Port / Damietta Port will be the most important export/import corridors.

4 A spider network is a virtual network that connects the center of each zone by a straight line.

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DamiettaDamietta AlexandriaAlexandria 31,49831,498 PorPort t SaidSaid 18,19718,197 5,9265,926 17,20717,207 43,11143,111 6,6646,664 22,65522,655 16,21916,219

13,77413,774 8,4818,481 22,44422,444 41,58941,589 22,44422,444 13,22713,227 7,0937,093 22,52722,527 7,0937,093 22,52722,527 SuezSuez 9,5639,563 9,5639,563 16,15616,156 SokhnaSokhna 24,37624,376 SokhnaSokhna PorPortPor t t 8,5568,556

23,57423,574 13,71613,716

20,07420,074

12,26812,268 SafagaSafaga 9,7789,778 9,0119,011 Unit: 1,000 ton/year

Source: Estimated by JICA Study Team Figure 3.3.14 Future Volume Flow on the Spider Network

(6) Future Traffic Volume by Transport Mode Figures 3.3.15 through 3.3.17 show the future traffic volume of export/import freight on the major networks by each mode in 2022. They were estimated by assigning the future freight OD matrices to the present networks. a) Truck Figure 3.3.15 illustrates the forecast results of the truck traffic in 2022. It is forecasted that the section with the heaviest traffic volume of export/import freight will be the road linking Alexandria Port and the Alexandria Agricultural Road, and has a traffic volume of 51 million tons per year. The total traffic volume on Desert road and Agricultural Road between Cairo and Alexandria will amount to 55 million tons, while that on the road between Damanhur and Alexandria will amount to 32 million tons. For the corridor of Cairo - Damietta, 29 million tons will be transported on the road between Mansura and Damietta. The section between Cairo and Upper Egypt, 30 million tons will be transported in 2022.

b) Railway The results of the railway traffic projection are illustrated in Figure 3.3.16. On the rail section between the center of Cairo and the branch point in the north of Cairo, the largest export/import freight traffic volume of 11 million tons will be transported.

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The second largest volume i.e. 7 million tons will be transported between Cairo and Alexandria, while 6 million tons will be transported between the rural area of Giza and Cairo. The traffic volume of other lines will be also increased, and 5 million tons will be transported between Zagazig and Ismailia.

c) Inland Waterway The volume transported by inland waterway between Alexandria Port and Cairo will be 0.3 million tons and the volume between Damietta and Cairo will be 0.2 million tons. Inland waterway services between Damietta and Cairo, it is assumed, will be commenced in 2008 or after 2008 and will a part of major freight networks, with a transport volume of 0.16 million ton per year in 2022. The result of the inland waterway traffic projection is illustrated in Figure 3.3.17.

66,,,11 115577 66 DamiettaDamietta 115577 66,,,11 66,,,11 115577 77 33 777 3355,,, 111555 ,,,1166 ,,,111 6666 666 11 11,,, 999 ,,,6677 5577 000 7722 ,,,1155 000000 22 PortPort SaidSaid AlexandriaAlexandria 333 66,,, ,,0,00 PortPort SaidSaid AlexandriaAlexandria 222 ,,, 333 222 999 333 ,,,111 999 333 ,,, 222 666 111 222 666 555 888 555 99 333 888 5599 333 ,, , 335599 333 ,, , 00 ,,,3355 ,,, 1 1 1 ,,,33 444 1 1 1 , 1 ,,33 1 00 33,,, 3 444 1 33 33 333 444 555 4 4 4 3322 555 111 4 4 4 000 22 555 1 4 4 4 000 22,0,0,0 999 999 111 ,0,0,0 5599 999 , , , 66 55 999 , , , 66 55 , , , 6633 33 222 8 8 8 33 33 222 8 8 8 33 33,,,33 333 222 8 8 8 33 333 555 6 6 6 22 33 555 6 6 6 ,,,22 ,,, 6 6 88 ,,, 555 6 33,,,22 5588 222 ,,,555 ,,, 33 5 3 5 3 222 5 3 55 3 5 3 7755 ,,, 3 ,,,77 333 666 333 3 3 3 11,,, 333 666222 333 11 ,,, 222 555 ,,33,3 555 33,,,225577 333 222 33,,,225577 222 1 1 1 222 1 1 1 888 1 1 1 88 888 88 4 4 4 5588 4 4 4 55 111 4 4 4 ,,,7755 111

,,,77 , , , 11,,, 777 , , , 11 666 777 , , , 11 666 777 8 8 8 666 8 8 8 88 8 8 8 11,,,775588 444 000 11,,,7755 000 55 6 6 6 11,,, 000 5566 6 6 6 777 5566 6 6 6 ,,0,00 777 6633 33 ,,, ,,, 33 3 3 3 8833 ,,, ,,, 3 3 3 66,,,118833 111 ,,, 3 3 3 1166,,,11 111 888 777 11 888 555 777 111 555 222 111 666 222 77 666 1 1 1 77 666 999 1 1 1 7744 555 333 ,,,999 11 1 4477 555 11 333 ,,, 5 5 5 6 55 6 6 5 55 5 5 5 77 6 6 6 11 0055 555 55 5 6 6 6 55 444 66 7700 555 66,,, 77 , , , 4 4 4 44 4 77 222 111 , , , 222 ,,, , , , 222 4 4 4 ,,,00 111 4 4 4 666 00 111 9 9 9 666 0033 9 9 9 333 666 33 99 9 5 5 5 33 333 5 5 5 22 22 2 2 2 5 5 5 ,,, 22 2 2 2 ,,3,33 22 2 333 111 7 7 7 111 111 7 7 7 888 111 111 77 7 888 333 666 111 333 666 774477 111 ,,, ,,, 774477 ,,, ,,0,00 4477 444 000 111 774477 77 444 000333 11,,,44 111 774477 773388 333 333 11,,,448866 ,,, 222 3388 333 222 8866 111 ,,5,55 222 666 00 222 111 555 444 666 4400 777 111 444 1144 000777 111 ,,, 11 000 9 9 9 888 ,,, 000 9 9 9 88 ,,1,11 ,,, 9 9 9 8 3 3 3 666 , , , 222 3 3 3 , , , 666 , , , 222 3 3 3 666 222 2 2 2 22 2 888 0 0 0 2 2 2 888 0 0 0 888 0 0 0 3 3 3 3 3 3 , , , 3 3 3 , , , , , , 00 6 6 6 11 11 6 6 6 6 6 6 11 11 00 6 6 6 6 6 6 1166 7711 6 6 6 999 66 77 999 00 66 77 1 1 1 00 ,,, 00 1 1 1 00 ,,,44 ,,, 1 1 1 ,,,44 ,,,00 888 44 66,,, 888 9 9 9 99 66 9 9 9 9 9 9 99 66 9 9 9 9 9 9 9900 22 9 9 9 00 22 111 00 2233 111 1 1 1 33 1 1 1 11 33,,,88 1 1 1 999 77111 111 6 6 1 ,,,88 6 999 77 11 6 1 6 11 88 6 999 00 33 6 6 6 111 000 ,,, , , , ,,,00 ,,, 3333 , , , 111 ,,, 9 ,,,555 , , 99 33 , 66,,, 99,,, 555111 0 ,2 0 2 0 66 ,,,22 111 0 0 0 33 111 2 0 2 22 0 2 222 0 23366 888 333 3 3 3 66 888 33 3 3 3 333 3 3 3 ,,,888 888 444 333 444 333333 6611 ,,, 333 55,,,666611 ,,2,22 99,,, 55,,,66 222 99,,,223366 888 1111,,, 3366 888 1111,,,667788 7788 222 9 99 4 2 99 44 222, 9 444 555 2222,,00 9 99 444 555 22,,,005566 66 22 444 333 55 66 2222 , , , 444 333 66 5566 22 , , , ,,, 333 0055 22,,0, , , , ,,,5 ,,,0055 ,,0,00 2 22 ,,,555 ,,00 ,,0,00 2 22 555 000 000 22,,, 0055 2 22 5 000 000 2222 5566 44 222 ,,, 22 66 3 33 44,5,,5 222 ,,, 222 66 3 33 ,5,,55 888 ,,, 222 3 33 ,5,,55 888 444 222 522 888 6 66 2288 444 111 11 6 66 88 111 11122 6 66 88 4 111 00 ,,, 222 4 111 00 ,,, ,,,11 22 444 1144 0022 333 444 44 333 1 1 1 22 00 333 1 1 1 22 777 00 1 1 1 ,,,00 999 22 777 33,,, 999 4 4 4 33 4 4 4 000 33 4 4 4 111 000 SuezSueSuez z 333 111 000 SuezSueSuez z 333 , , , 666 ,,, , , , 444 666 ,,, , , , 666 ,,, 1 1 1 444 ,,, 1 1 1 ,,, ,,, 666 1 1 1 ,,5,55 ,,, 666 0 0 0 555 999 0 0 0 555 999 111 0 0 0 999 111 444 999 777 444 4 4 4 999 777 444 4 4 4 777 4 4 4 888 000 888 000 000 1144 000 111 111 44,,, , ,, ,,,55 LEGEND , ,, 5599 444 9988 444 88 111 111

7 7 7

333 7 7 7 333 7 7 7

0 0 0

333 0 0 0 333 0 0 0 1 1 1 99 9 222 1 1 1 222 1 1 1 999 , 2,2, 2 SokhnaSokhna 00 0 , ,, 4 4 4 SokhnaSokhna ,,, 4 4 4 00 0 4 4 4 333 888 333 , , , 333 , , , 888 , , , 1 1 1 , , , 777 1 1 1 777 1 1 1 , , , 777 000 000 4 0 0 0 3 33 44 000 000 3 33 444 0 0 0 Port 000 0 0 PortPort 0 444 0 0 0 3 33 PortPortPort >= 10,000 000 11 1 20,000 4 4 4 , , , 000 11 1 , , , 000 4 4 4 111 , , , 4 4 4 22 2 111 22 2 22 2 111 ,,,1 33 3 33 3 444 33 3 444 33 3 33 3 111 >= 5,000 33 3 111 10,000 333 333 333 777 333 777 222 000 222 000 , ,, 000 , ,, 000 333 4 4 4 111

4 4 4

>= 2,5001,000 333 4 4 4 111 333 555 0 0 0 555 0 0 0 555

0 0 0 0 0 0 0 0 0 ,, 0 0 0 , 1 1 1 , ,,

1 1 1 , ,, 1 1 1 888 , , , 8 8

, , , 888 , , , 777 888 777 4 4 4 8 8 777 666 4 4 4 888 < 2,5001,000 666 4 4 4 000 333666 555 000

1 1 1 333 1 1 1 555

1 1 1

777 777 00 0 000

1 1 1

1 1 1 Unit: 1,000 ton/year 222 1 1 1 222 5 5 5

222 5 5 5 111 5 5 5 111 , , , , , ,

, , ,

2 8 8 22 8

2 8 22 8 8 666 ,,2,22 8 8 8 666 ,,, 8 8 8 333 999 8 8 8 333 999 8 8 8

5 5 5

1 5 11 5 5 111 5 5 5

0 0 0 0 0 0 0 0 0

7 7 7 7 7 7 Source: Estimated by JICA Study Team Figure 3.3.15 Future Traffic Volume by Truck in 2022

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DamiettaDamietta

33,,, 33,,,445588 0000 00 00 00 000 00 888 11 555 77 11,,,33 000 444 77,,, ,,,33 000 ,,4,44 77 3366 000 ,,, ,,,8855 6611 333,,, PortPort SaidSaid AlexandriaAlexandria 5599 11 333 AlexandriaAlexandria 000 333 000 111 333111 00 00 777 11 333 00 00 777 11,,,33 777 00 666 3366 11 22 777 00 666 6611 11 22 555 00 111 11 99 99 555 111 22 11 777 1 1 1 , 1 1 ,, 1 22 11 777 1 1 1 00 ,,, 11 777 1 1 1 ,,, 66 22 ,,, 1 1 1 00 66,,,8855 ,,, 1 1 1 00 777 ,,, 99 ,,, , , , 8855 222 , , , 777 5599 222 , , , 777 99 333 , , , , , , 222 2 2 2 333 , , , 999 333 3 3 3 2 2 2 999 2 2 2 3 3 3 999111 3 3 3 111 8 8 8 111 4 4 4 8 8 8 4 4 4 8 8 8 88 111 4 4 4 11 11 0088 111 1 1 1 11 11 1 1 1 00 111 8 8 8 11 3300 ,,, 8 8 8 1 1 1 33 22,,,44 8 8 8 33 666 ,,,111 22,,,444433 ,,, 111111 88 ,,8,88 111 000 330088 888 777 000 330 555 777 666 3300 88 555 666 555 0088 330088 999 555 11 33 999 66 333 11,,,33 111 66,,, 000 ,,,3333 111 ,,,8855 ,,, 3322 5599 222 1 1 1 99 1 1 1 1 1 1 111 6 111,,, 666 111 11 ,,2,22 666,,, 111 11,,,33 222 ,,,888 222 ,,, ,,,3377 333 888 888 222 ,8,8,8 7722 333 888 555 888 22 444 111 555 333 333 111 999 2 2 2 333 333 999 2 2 2 333 ,,3,33 999 2 2 2 ,,, 999 111,,, 999 111

1 11 1 11 666 3333 1 11 22 22999 333 ,,,663333 ,,,663333 22 ,,,22 333 44,,,6633 44,,, 444 333,,, ,,,66 ,,, 0 0 0 33 ,,, ,,, 0 0 0 ,,, 222 0 0 0 44 222 444 222333 1 1 1 333 1 1 1 333 00 1 1 1 777 , , , 777 , , ,

, , ,

8 8 8

8 8 8

8 8 8

3 3 3

9 9 9 3 3 3

9 3 3 9 9 00 0 3

9 9 9 00 0 00 0

5 5 5

5 5 5 5 5 5

5 44 5 5 4 5 5 5 44 5 5 5 2244 8 8 8 22 99 7 7 7 8 8 8 99

, 7 7 7 8 8 , 8 ,

99 7 7 7 , , , , 000 ,,

, , , , , 000 11, , , , 000 11 11 3 3 3 666 3 3 3 6 6 6 666 3 3 3 6 6 6 6 6 6 ,,, ,,, 2 2 2 ,,,888 2 2 2 88 2 2 2 888 , , , 555 , , , 555 , , , 44,,, 999 4 4 4 ,,,22 999 4 4 4 33 999 4 4 4 2233 000 3377 000 77

3 3 3 3 3 3 3 3 3 444 , , , , , , ,,, , , , ,,, 7 7 7 ,,, 7 7 7 00 222 7 7 7 00 00 222 5 5 5 00 00 333 5 5 5 333 5 5 5 00 00 00 333 9 9 9 00 777 9 9 9 00 9 9 9 9 9 9 777 9 9 9 777 9 9 9 00 5 5 5 00 5 5 5

5 5 5

7 7 7

7 7 7 7 7 7

7 7 7 7 7 7 0 0 0

7 7 7 , , , 0 0 0

, , , 0 0 0 00 , , , 1 1 1 00 1 1 1

1 1 1 3 3 3

3 3 3

3 3 3

6 6 6

6 6 6 00

6 6 6 00 , , , 00

, , ,

, , ,

0 0 0

0 0 0

0 0 0

8 8 8 33 1 1 1 8 8 8

33 1 1 1 8 8 8 4433 1 1 1 222 44 222 3344 , 222 , , ,,,33 , , , SuezSuez 33 , , ,,, , SuezSuez 666 , 7 ,, 7 66 7 SuezSuez 7 7 666 66 7 666 66 7 7 7 000 1 1 1 000 1 1 1 000 1 1 1 ,,, ,,, 3 3 3 3 3 3 3 3 111 666 3 111 666 111 666 666 333 333 222 , , , 222 LEGEND , , , 222 222 ,,, 222 ,3,3,3 222 333 222 666 666 666 000666 666 666 000 666 666 ,,0,00 666 666 ,,, 666 111 666 111 SokhnaSokhna 333 SokhnaSokhna 333 SokhnaSokhna ,3, 3,3 , , ,

222 >= 10,0002,000 222 PortPortPort

666 666

2 2 2 666 2 2 2 666 2 2 2 >= 5,000 , , , 1,000 333 , , , 333 , , , 333 3 3 3 ,, , 3 3 3 ,, , 3 3 3

6 6 6 222 6 6 6 222 6 6 6

6 6 6

6 6 6 >= 1,000 250 6 6 6 < 1,000 250 111 666 111 ,,, Unit: 1,000 ton/year 222

222 222 111 111 999 ,,9,99 ,,, 111 111 Source: Estimated by JICA Study Team Figure 3.3.16 Future Traffic Volume by Railway in 2022

DamiettaDamietta 666 555 111 11 1 11 1 11 1

55 5 55 5 55 5

66 6 66 6 66 66 6 115566 AlexandriaAlexandria PortPort SaidSaid 111 666 555 222666 666 555222 11 666 555 115566

115566 66 226644 115566 226644 44 22 115566 226644 2266 66 666 44 666 44 666 226644 555 111 226644 555 111 111 555 111 555 666 222 222 666 666 666 444 666 444 555 555 111 111 111 111 555 555 444 222 666 444 222 666 666 666 666 666 666 666 555 666 666 555 222 444 111 222 444 111 666 555666 111 444 11 444 11555 666 222 55 666 222 66 666 666 666 222 666 222 444 222 444

666 111 666 111 555 555 555 555 111 111 666 666

000 000 222 222 444 444 222 666 111

2 2 2 2 2 2 SuezSueSuez z 2 2 2 SuezSueSuez z 6 6 6 6 6 6 6 6 6

1 1 1 1 1 1 1 1 1

111 111 666 LEGEND 666 222 222 222 222 666 666 111 111

111 111 666 222 SokhnaSokhna 666 222 SokhnaSokhna 222 666 222 666 111 >= 10,000300 111 PortPortPort

222 >= 5,000200 666 111 >= 1,000100

1 1 1

1 1 1

1 1 1

6 6 6

6 6 6

6 6 6

2 2 2

2 2 2 < 1,000100 2 2 2

Unit: 1,000 ton/year 4444 2244

444 444 222 Source: Estimated by JICA Study Team Figure 3.3.17 Future Traffic Volume by Inland Waterway in 2022

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT

(7) Export and Import Container Volumes in 2022 The export and import volumes in 2022 were estimated at 206 million tons including dry bulk, liquid bulk and conventional cargo. The conventional cargo can handle as container cargo. The export and import container volumes were estimated with the following steps: i) In accordance with the relation between handling type and commodity type shown in Table 3.3.8, the commodities in Table 3.3.17 were selected. ii) The export and import conventional cargo volumes in 2022 were estimated by applying the present shares of the conventional cargo. iii) Assuming that the containerization ratio is 60% except for “gasoline” and “railway or tramway sleepers of woods and other woods roughly squared, half squ”, the export and import container volumes were estimated. As a result, the export and import container volumes were estimated at 66 million tons. Assuming that the weight of 1 TEU is equal to 10 tons, 6.6 million TEU of containers for export and import will be handled in Egypt.

Table 3.3.17 Estimation of Export and Import Container Volumes in 2022 (3) (1) (2) (5) Vo l u m e o f (4) Vo l u m e Share of Container Commodity Conventional Containerizati (1000 Conventional Vo l u m e Cargo on Ratio ton/year) Cargo (%) (3) x (4) (1) x (2) Export Cement 17,456 3% 524 60% 314 Gasoline 3,256 24% 781 0% 0 Rice 3,170 3% 95 60% 57 Semi-finished Rolled 2,737 100% 2,737 60% 1,642 Steel Products Others 34,705 100% 34,705 60% 20,823 Sub-Total 61,324 - 38,842 - 22,836 Import Other Basic Chemicals 15,818 14% 2,215 0 1,329 Railway or Tramway Sleepers of Woods and 6,083 100% 6,083 0% 0 Other Woods Roughly Squared, Half Squ Oil-seed Fats, Oil Nuts 4,253 47% 1,999 60% 1,199 and Oil Kernels Animal and Vegetable Fats and Oils, and 4,008 100% 4,008 60% 2,405 Products Derived There from Others 64,310 100% 64,310 60% 38,586 Sub-Total 94,472 - 78,614 - 43,519

Total (Export + Import) 66,355 Note : The shares of conventional cargo are same as Table 3.3.8. Source: Estimated by JICA Study Team

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT

3.3.4 Road Capacity and Transport Demand of Major Roads in 2022 The future traffic flow was assessed in terms of road congestion on the major roads which were expected to be the important logistics corridors for export and import. For this assessment, the following roads were selected as the major components of the freight transport networks: - Cairo - Alexandria Desert Road - Cairo - Alexandria Agriculture Road (Damanhur - Alexandria) - Cairo - Damietta Agriculture Road (Mansura - Damietta) - Port Said Road (Ismailia - Port Said) - Cairo - Suez Desert Road - Cario - Sokhna Road The present traffic volumes are shown in the figure below.

18,45018,450 8,9078,907

39,18239,182 23,24723,247 20,85420,85420,854 23,24723,247 10,95210,952 4,4134,413 25,90825,908 15,18915,18915,189 16,53416,534 28,97328,973 34,31934,319 5,0675,067 27,84927,849 7,7847,784 25,50425,504 11,37211,372 10,69210,692 9,5239,523 46,50646,506 9,5239,523 26,25426,254 16,12416,124 16,12416,124 11,37611,376 17,96017,960 11,37611,376 51,43851,43851,438 25,43125,431 27,55127,551 12,79212,792 8,0018,001 980980 14,29114,291 12,30012,300 17,69917,699104,834104,834 49,23649,236 28,80928,809

15,94115,941 1,7901,790

19,57619,576

12,89912,899 5,5785,578 3,9553,955

13,83113,831

12,31212,312 5,1705,170 Unit: vehicle/day

Source: GARBLT Figure 3.3.18 Annual Average Daily Traffic in 2006

The future traffic volumes on these roads were estimated from the present traffic volumes and an assumed growth rate. The annual growth rate of GDP is assumed to be 6.9% in this study. Assuming the GDP elasticity of traffic volume is 0.8, the annual growth rate of traffic volume is calculated to be 5.5% (6.9 x 0.8). Using this rate, the traffic volume in 2022 was calculated to be 2.5 times that of 2005. For the evaluation of the congestion, V/C ratios (daily traffic volume/ daily road capacity) were calculated.

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The following formula was applied to the calculation of the daily capacity

Qc = Qs x N/2 x 100/K x 100/D x fn x fs Where, Qc: Traffic capacity (pcu/day) Qs: Basic traffic capacity (= 2,000 pcu/hour) N: Number of Lanes (both directions) K: K-factor (=8% :Percent of the peak time traffic to the daily traffic) D: D-factor (= 60 % for radial road, 55% for other road) fn: Area type factor (= 0.6 for downtown, 0.75 for urban area, 0.9 for other area) fs: Service level factor (= 0.8 for Expressway and trunk road, 0.9 for sub-trunk road, 1.0 for minor road )

From this formula, the capacity of the selected major roads was calculated as follows: The values in Table 3.3.18 were applied to the variables in the formula above.

Table 3.3.18 Variables and Their Estimated Values Section Qs N K D fn fs Qc Cairo - Alexandria Desert Road 2,000 6 8 60 0.9 0.8 90,000 Cairo - Alexandria Agriculture 2,000 6 8 60 0.75 0.8 75,000 Road (Damanhur ・Alexandria) Cairo - Damietta Agricultural 2,000 4 8 60 0.9 0.8 60,000 Road (Mansura ・Damietta) Port Said Road (Ismailia ・Port 2,000 4 8 60 0.9 0.8 60,000 Said) Cairo - Suez Desert Road 2,000 4 8 60 0.9 0.8 60,000

The result of the calculation was summarized in Table 3.3.19. Table 3.3.19 Capacity Analysis of the Major Road Traffic volume of Section Capacity Daily Traffic volume Volume/ Export/import 1) 2006 2) 2022 Capacity Equivalent (pcu/day) (veh/day) (Upper:veh/day) (V/C) (million traffic volume (Lower:pcu/day 3)) ton/ year) in pcu.day 4) Cairo - Alexandria 72,000 90,000 28,809 1.2 24 20,500 Desert Road 108,000 Cairo - Alexandria 98,000 75,000 39,182 2.0 32 27,400 Agriculture Road 147,000 Cairo - Damietta 58,100 60,000 23,257 1.5 29 24,800 Agricultural Road 87,200 38,000 Port Said Road 60,000 15,189 1.0 16 13,700 57,000 Cairo – Suez 39,900 60,000 15,941 1.0 22 18,800 Desert Road 59,900 Cairo – Sokhna 13,900 60,000 5,578 0.4 15 12,800 Road 20,900 1) Refer to “Capacity Calculation” described below 2) Source of traffic volume in 2006 :GARBLT, refer to Figure 3.3.18. 3) It was assumed that 50% of vehicles are large vehicle (pcu = 2.0). 4) Top: Yearly transport volume in ton Middle: Equivalent traffic volume in pcu Bottom: % of the equivalent traffic volume to the road capacity The equivalent traffic volume in pcu/day was calculated as: Export/import volume (ton/year) / 312 (operating days/year) / 15 (ton/veh) x 2.0 (pcu/veh) Where, operating days = 6 days/week x 52 weeks/year = 312 days/year

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The assessment of traffic congestion of the major roads in 2022 was summarized as follows:

Cairo – Alexandria Desert Road The V/C (volume/capacity) ratio of this road will be 1.2 when all kinds of vehicles are taken into consideration, which indicates the possibility that congestion will occur around the morning and evening peak times in 2022. In addition, both ends of this road are connected with the access roads to Alexandria and Cairo. These access roads are designed with less velocity and the number of lanes are less so that there will be congestion at both ends.

Cairo – Alexandria Agriculture Road (Damanhur – Alexandria) On this road, traffic of export/import freight will amount 39% of the road capacity in 2022. The V/C ratio based on all kinds of vehicles will be 2.0, which means that congestion will probably happen all through the day in 2022.

Cairo – Damietta Agriculture Road (Mansura – Damietta) On this road, traffic of export/import freight will amount to 41% of the road capacity in 2022. The V/C ratio will be 1.5. This V/C ratio means that congestion will probably happen all through the day in 2022.

Port Said Road (Ismailia – Port Said) The V/C ratio based on all kinds of vehicles will be 1.0, which means that congestion will not be observed on this road in 2022.

Cairo – Suez Desert Road The V/C ratio based on all kinds of vehicles will be 1.0, which means that congestion will not be observed on this road in 2022. Cairo – Sokhna Road The V/C ratio based on all kinds of vehicles will be 0.4, which indicates that the road has enough capacity in 2022.

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3.3.5 Line Capacity and Transport Demand of Major Railway Lines in 2022 Table 3.3.20 lists up railway lines of the major railway freight corridors, and presents a line capacity and a freight transport demand section in 2022. Line capacity in Table 3.3.20 was assessed in the report entitled “The Master Plan Study for Egyptian National Railways” (JICA, 1996). The line capacity is dependent on many factors such as the number of locomotives and their performance, number of station and a distance between the stations, number of passenger trains required, track condition, and line facilities, so that the line capacity in Table 3.3.20 could have been improved by the railway modernization projects after 1996; however figures in the table are still useful to check new necessity of railway improvement works. In estimating the necessary number of freight trains in 2022, the following assumptions are adopted:

Tv = Nw x Tw = 50 wagons x 20 tons/wagon = 1,000 tons/freight train

Where: Tv: Transport volume of one freight train (ton/freight train) Nw: Number of wagons per freight train Tw: Average weight of freight wagon (loaded) (ton/wagon)

Table 3.3.20 confirms that almost all the railway sections have enough line capacity to cope with the freight transport demand even in 2022 since V/C ratios (= volume/capacity) keep less than 1.0, and suggest that there is no need to conduct any big railway projects except new access line construction projects. However, three sections have to cope with excessive transport demand: first, El Maraziq – KM 48 section, secondly, Damietta Port - Kafr Bateikh section, and lastly Suez – Al Robeki section. The transport demand of these railway sections are induced by the expected economic growth. An excessive demand on these railway sections can be coped with a simple and easy measure i.e. an installation of new stations and/or new signaling stations, resulting in a shorter distance of the block section and a higher line capacity. As for the El Maraziq – KM 48 section, new access line between Manashy – KM 48 will greatly contribute to ease the capacity constrain and will realize more smooth and easier access to the industrial zones to/from the export/import gates and the remote markets. Newly suggested access lines are listed in Table 3.3.20, and are explained in detail in Chapter 4. Necessity of these suggested lines is set to seek for the more efficient freight flows, rather than to solve the capacity constrains.

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Table 3.3.20 Line Capacity and Transport Demand of Railway by Section Capacity Volume/ 7) (train/day) of Freight Train Equivalent Number Equivalent Freight - 6,470 - - - -- 3,991 18- - --n.a.- 3,991 11 0.7- - - 3,991 11 - 0.9 - - 11 3,991 0.9 - - 0.9 11 - 0.9 17 (Single)). 477 1,062 1 3 - 0.2 2006 2022 2006 2022 2006 2022 2,746 7,167 8 20 - 0.8 of Export/Import of aid (West) - El Ismailia since Ferdan Swing Bridge (for railway) can (1,000tons/year) Transport Volume Transport 2) 3) 4) 4) 5) 4) 6) 4) 1) Train Freight (trains/day) Pass. Train Line Capacity Capacity Line 1) and/or Freight Passenger le F -leF P & 24le 2,644 35 6,859F P & 9 7 20 873 19 9 1,332 - 681 2 1,281 0.8 4 2 0.3 4 0.4 0.2 0.4 g g g Track Single F - 24 SingleF & P Single 34F & P 12 Single 34F & P 12 34Single 12 F & P 34 12 DoubleF & P 67 32 1,593 4,633 4 13 0.1 0.4 g - El IsmailiaEl - Sin ) azi of Ramadan - Robiki of Ramadan - Robiki of Ramadan - Robiki of Ramadan - Robiki g th th th th West ( - El Ithad Sin y abbar Suez - Nefisha - Suez Zagazig - Nefisha Robiki - Suez 10 - Zagazig Double Double &F F P & P Double 67 18 P 32 16 22 1,593 1,203 4,633 4,237 2 4 3 - 13 12 3,896 0.1 0.2 - 0.4 0.7 11 - 5.3 Qena - Safaga SingleP & F210------& SingleP Bateikh - Kafr Port Damietta Mansoura - Bateikh Kafr Single Safaga Port Said Sin F - Port Said Port (East)Ismailia - El Za - Ismailia - SingleSokhna Port- Suez 8F P & 766 5 3,458Qena 2 2 El Sad El AliCairo - Sinlge 9 F - Double - 1.2 F P & 17 182 68 851 1,912 2 5 0.0 0.1 Port Dekheila - Qabbary - Dekheila Port Single F - 24 Zagazig - 10 - Zagazig El Ithad - Manashy - - Manashy - Ithad El Maraziq El - Giza El - Imbaba KM 48 (near) - Maraziq El (near) (near) Manashy - (near) KM48 line) access suggested (newly Single Double SingleF & P F & P Zagazig- F & P Mansoura 10 - Zagazig 182 37 2Zagazig - Ismailia El 68 38 10 - Zagazig 8 2,644 Single 2,040 6,859F & P 6,343 10,617 Double 7 0 6 34F & P 19 12 29 17 67 0.2 155 0.0 0.7 32 0.5 1,343 0.4 2.2 1,593 0 4,633 4 4 0.0 13 0.3 0.1 0.4 (newly suggested access line) access suggested (newly line) access suggested (newly line) access suggested (newly line) access suggested (newly Q of th of of th th 7) that one is It freight assumed is 50train composed to (equivakent of 20 wagons tons). 8) n.a. indicates not available. 2) Port Qabbary: that of same line capacity preliminary - - Dekheila as as set its Qabbary is El Ithad section. 3) 175 KM of that (near) - as as Qabbary set : El its Ithad same is - Manashy preliminary capacity line section. 4) 10th - Zagazig as as set its Robiki: - Mansoura Ramadan is - that same of of line capacity preliminary Zagazig. 6) Port Sokhna a of set its of Suez: is half - line capacity line capacity - preliminary ((18 Suez Nefisha + 16)/2 (double) = 5) Port Said Port a (East) preliminary as capacity line quarter set El its is Ismailia: - (6 hours) hours/24 of Port of that S be 6 used infor total hours per day. of October Route Section Table 3.3.20 Line Capacity and Transport Demand of Railway by Section by Railway of 3.3.20 Demand Table Transport and Capacity Line th of Ramadan th Note: as as 4.3.2. in ENR Figure arethose same the spellings All of the stations shown Note: 1) P for stands Passenger, F for stands Freight. and Source: 1996), Master Plan National (JICA, Railways for Egyptian Study Team. and Study by JICA up-date of Ramadan th Sokhna Port - Cairo/ 10 Cairo/ - Port Sokhna Ramadan Industrial Zone PortSaid Port (West) - Cairo/10 October Industrial Zone Industrial October 10 Cairo/ - Damietta Ramadan/ 6 PortSaid Port (East) - Cairo/ 10 Upper Egypt - Red Sea Red - Egypt Upper Cairo - Egypt Upper Alexandria - Cairo/ 6 Cairo/ - Alexandria

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Alexandria - Cairo/ 6th of October Industrial Zone At present, actual freight transportation by railway is conducted between Alexandria and Cairo, and freight transport services is not available as far as 6th of October industrial zone by railway. This is assumed kept even in 2022. As shown in Table 3.3.20, the freight transport demand will be increased up to 10.6 million tons/year on the section of Imbaba – El Giza – El Maraziq: however the V/C ratio is only 0.4 and no problem is expected in line capacity. If new access line to 6th of October industrial zone will be constructed, 6.4 million tons will be shifted from the Imbaba – El Giza – El Maraziq section to the new access line because of more efficient freight handling at a proposed logistics center there.

Damietta - Cairo/ 10th of Ramadan Industrial Zone The V/C ratio of the Kafr Bateikh – Mansoura – Zagazig section of this export/import freight corridor will be 0.4 and 0.3 in 2022. On the contrary, the Damietta Port – Kafr Bateikh section will have an excessive demand (V/C ratio is 1.2), and this is attributable to a connectivity with the major railway line (Damietta – stations beyond EI Mansoura) at Kafr Bareikh station: however, that can be cope with easily. This single line is 15 km in length with 2 stations, and can operate 8 freight trains per day by assuming 2 hours for loading/unloading and 1 hours for a round trip. In 2022, this section requires another 2 freight trains (in total, 10 freight trains) to cope with the demand. With new access line between Zagazig and 10th of Ramadan industrial zone (up to near Al Robeki station of the Suez – Ein Shams line) induces freight transportation demand on this line and the V/C ratio will be increased up to 0.9 in 2022. Port Said Port (West) - Cairo/10th of Ramadan The Port Said – El Ismailia section is a single line and have a line capacity of 29 trains per day (20 for passenger trains and 9 for freight trains), and the V/C ratio in 2022 will rise from 0.2 in 2006 to 0.4, being still far below the line capacity. The El Ismailia – Zagazig section is a double tracks and its V/C ratio in 2022 is expected only 0.4. Both sections do not have any constrain of line capacity in 2022.

Port Said Port (East) - Cairo/10th of Ramadan In 2007, the freight transport service between Port Said Port (East) and Cairo is not available since there is no transport demand by railway. In case that this section will be used for freight transport services in 2022, the line capacity will be limited by the Ferdan Swing Bridge. However, its line capacity can be guaranteed to be 5 to 7 trains per day in total. No line capacity is expected. Since the development plan of industrial zone behind Port Said Port (East) is now underway, it is suggested that the freight transport demand of this railway line might be reviewed as the development of industrial zone will progress. Sokhna Port - Cairo/10th of Ramadan/6th of October New access line between Zagazig and 10th of Ramadan industrial zone (up to near Al Robeki station of the Suez – Ein Shams line) will bring a great shift of freight routes: from a route via Ismailia to a route via Suez – Al Robeki – new access line (heading toward 10th of Ramadan industrial zone). With this great shift of freight route, the line capacity of Suez – Al Robeki section will be 5.3: however, a shift in the composition of passenger train/freight train

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(passenger = 12 trains, freight trains = 12 trains per day) can solve this capacity constrain for freight transportation in 2022.

Upper Egypt - Red Sea This section is used at present only for a transport of mining resources, and the line capacity is 12 trains in total. Potential transport of reefer containers for agro-products can be attached with the present freight trains. No problem of line capacity can be expected even in 2022: however, a progress of agricultural development of this region should be observed carefully to adjust the freight transport demand on this line in the future. Upper Egypt – Cairo This section have a large line capacity i.e. 182 trains for passenger and 68 trains for freight trains, and no line capacity is expected on this railway line even in 2022 (the V/C = 0.1).

In assessing the impact of railway infrastructure development projects, the demand forecast sets five (5) cases of railway networks that are incorporated with new project suggested in Chapter 4, and are compared with the case of “do noting”. In these cases, the infrastructures of roads and inland waterways that are included in the present national development plan, are set as pre-conditions. Cases are explained in Table 3.3.21, and Figure 3.3.18 show the volume flow by railway in 2022 by alternative cases. Table 3.3.21 Alternative Cases of Railway Network Network Condition Case Name Road Railway Inland Waterway Case-0 Same as Present Network (Do Nothing Case) Present Network Case-R1 +[R9] 6th of October Direct Access Line will open Present Network Present Network Case-R2 +Ring Road will be +[R12] 10th of Ramadan Direct Present Network completely connected Access Line will open + Damietta +Regional Ring Road Present Network Branch will open Case-R3 will open +[SR1] New Freight Link (10th of Ramadan - Helwan) will open Present Network Case-R4 +[R12] + [SR1] will open Present Network Case-R5 + [R9] + [R12] + [SR1] will open Source: JICA Study Team

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(Unit: 1,000 ton/year)

3 3,458 ,607 0 0 0 0 0 0 0 0 0 0 0 0 7 0 8 0 0 5 6 0 4 4 0 0 , 8 1 1 0 , 81 4 1 30 ,36 3 ,2 1,4 , 3 1, 1 ,3 1 4 3 4 0 3 6 0 7 0 1 4 1 1 9 3 6 0 0 3 0 0 6 0 0 6 0 0 1 7 1 7 2 , 1 , 4 3 , , 4 0 0 , , 6 2 5 0 9 4 2 8 9 1 1 7 9 9 1 7 7 8 1 , 1 0 5 1 , 1 1 1 0 , , , 3 , , 3 2 2 3 3 , 9 1 2 2 8 6 4 8 3 0 0 9 6 1 9 0 0 30 7 3 8 3 , 0 1 2 2 , 1 4 9 8 8 4 8 3 8 1 3 1 0 8 7 5 1 30 5 7 ,4 8 1 3 4 , 9 4 2 3 2 8 0 1 8 0 1 6 6 3 6,859 5 1 1 3 1, 1 6 1 ,4 1 6, 7 ,0 33 ,9 ,200 , 04 8 1,11 2 8 1 0 2 5 0 2 1 1 3 9 6 6 6 1 6,9 1 ,8 8 1 , 59 1 , 3 1,4 3 1,37 2 2 , 54 2 , 2 9 5 0 8 3 8 1 4 8 8 1 1 2 1 4

2 3 3 , , 0 1 8 7 1 9 3 2 2 , 2 , 5 6 4 1 9 33 1 7 4 4 88 2 3 633 ,6 ,4 8 4,88 4, 4 , 3 4, 4 4 0 3 ,8 , 3 ,6 , 0 4 0 0 4 2 4 1 1 3 0 9 0 0 , 0 , 0 7 9 8 0

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, 4 9 2 9 7 0 ,2 , 53 253 0 6 3 25 5 3 0 3 3 253 2

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, 7 0 4 , 2 0 5 0 3 9 3 0 2 3 8 0 , 0 ,7 5 1 4 3 1 2 3 3 2 4 4 3 1 0 3 0 , 4 7 2 , 6,346 6 6 17 6 4 1 0 , , 0 1 6 1 6 2 3 2 7 , 2 2 2 6 7 , 1 2 , 0 3 , 3 , 3 , 7 1 6 1

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3,607 3,607 0 0 0 0 0 0 0 0 0 7 0 0 0 7 0 0 0 0 0 0 6 8 0 0 6 8 44 1 , 30 361 1 , 30 1,4 , 3 1, 1, , 3 1, 4 3 3 3 0 4 0 3 6 0 4 1 1 1 9 3 0 0 7 3 0 0 6 1 7 0 0 7 1 7 0 0 2 ,4 3 ,3 , , 4 0 0 , , 6 0 0 9 4 2 0 1 2

9 9 1 9 9 1 7 7 8 1 1 , 1 0 6 1 1 , 1 0 , , , , 3 , 3 , 3 2 2 3 6 1 2 3 8 6 0 9 4 8 7 1 9 3 0 0 0 0 0 7 3 0 8 3 ,9 1 2 2 8 3 ,0 1 9 4 3 8 3 8 0 8 7 5 1 1 0 6 7 5 8 1 3 3 4 2, 3 6 4 2, 8 0 1 8 0 1 6 3 6 5 6,983 1 1 7,066 8 1 6 ,4 1 7 1 ,3 1 ,9 ,200 ,1 04 ,0 ,117 , 32 8 1 0 2 6 1 0 2 3 6 1 6 6 1 6,9 1 7,0 1 83 1 , 66 1 , 1,454 3 1,372 3 2 , 5 0 2 , 3 0 9 1 9 4 8 8 8 8 2 1 ,4 2 ,3 7 1 9 1 0 3 2 3 1 2 8 , 2 5 1 47 1 921 921 1,4 56 5 ,905 ,90 , 2 , 0 2 2 2 1 2 4 1 ,9 , 0 0 0 , 9 0 5 3 9 2 1 1 1 0 6 9 0 0 , 0 , 1 0 9 3 0 9 2 5 6 1 8 0 0 9

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7 7 7 7 3 3 , , 2 2 Case-R2 (+ 10th of Ramadan Line will open) Case-R3 (+10th of Ramadan - Helwan Line will open)

3,607 3,607 0 0 0 0 0 0 0 0 0 7 0 0 0 7 0 0 0 0 0 0 6 8 0 0 6 8 44 1 , 30 44 1 , 30 1,4 , 3 1, 1,4 , 3 1, 4 3 4 3 0 4 0 0 4 0 4 1 4 1 9 3 0 0 9 3 0 0 6 1 7 0 0 6 1 7 0 0 2 ,4 2 ,4 , , 4 2 0 0 , , 4 1 2 0 0 9 4 9 4 9 9 9 1 9 9 1 7 7 8 1 1 , 1 0 8 2 1 , 1 0 4 , , , 3 , 3 , 3 2 2 3 3 2 3 9 8 6 0 9 4 8 6 9 4 0 0 0 0 0 0 0 8 3 ,9 1 2 2 8 3 ,9 1 2 2 3 8 3 8 30 8 74 ,5 1 1 30 8 1 74 ,5 1 1 3 2 3 ,2 2 8 0 1 8 0 0 1 6 3 0 6 3 6,983 1 1 6,983 1 1 6 1 ,4 1 1 ,4 1 ,9 ,200 , 04 , 04 8 1 0 2 0 2 3 6 1 6 1 6,9 1 6,9 1 83 1 , 83 1 , 1,454 3 1,454 3 2 , 5 0 2 , 5 0 9 1 9 1 1 8 1 8 2 ,4 2 ,4 7 1 7 1 2 73 1 21 2 73 1 21 ,4 1 921 92 1,4 ,4 1 921 92 1,4 0 1 2 4 0 1 2 4 0 9 0 9 9 9 0 1 9 0 1 9 0 , 0 , 0 9 3 0 9 3

2 2

1 6 1 6 0 3 0 3 8 , 2 8 , 2 2 , 2 2 9 6 1 9 6 , 0 9 , 0 9 6 1 6 9 6 1 9 6 , 0 6 6 , 0 2 9 9 9 , 9 8 8 1 2 4 2 4 0 6 4 0 6 6 4 6 9 99 9 6 99 , 0 253 5 0 9 1 1 2 2 0 1 2 8 4 7 8 4 , 99 4 2 , 99 4 2 1 4 1 0 3,89 9 , , 3,89 9 0 6 0 6 6 3 9 6 3 9 8 3,89 ,8 8 2 3,896 ,8 8 9 6 8 9 0 5 6 0 5 6 ,4 1 2 4 1 2 4 , 3 7 , 3 8 , 9 8 , 9 2 , 8 0 2 , 8 9 9 9 9 7 ,825 1 6 1 ,825 1 6 ,6 1 ,1 1 3 4 7 34 6,644 0 2 43 174 0 2 6, 2 6,3 2 1 1 , ,

7 1 7 1

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3 2 3 2 , 2 2 , 2 2 2 , ,1 2 , ,1 3 1 3 1 7 7 7 7

7 2 7 2 7 7

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7 7 7 7 3 3 , , 2 2 Case-R4 (+10th of Ramadan Direct Access Line Case-R5 (+all new lines will open) + 10th of Ramadan - Helwan Line will open) Figure 3.3.18 Future Volume Flow by Railway in 2022 by Alternative Cases

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Table 3.3.22 shows the total amount of transport cost in Egypt in 2022 by alternative cases. In Case-R5 (three new lines of railway ([R9] “6th of October Direct Access Line”, [R12] “10th of Ramadan Direct Access Line” and [SR1] “New Freight Link between 10th of Ramadan and Helwan” will be opened), the effect of transport cost reduction is worth 102 million LE per year, the highest value of saving in transport cost in total. The distance of proposed railway line has a significant impact on the results. On the contrary, Case R1 (In case 6th of October Direct Access Line will be opened) presents the most efficient performance of cost saving per unit (km) among five alternatives which can reach 3.32 LE per kilometer. This result shows a sharp contrast with that in terms of total cost saving (R5 is the highest one). Further, it should be noted that all cases have produces notable savings as shown in the same table.

Table 3.3.22 Total Transport Cost by Case in 2022 (Unit: Million LE/year) Mode Case-0 Case-R1 Case-R2 Case-R3 Case-R4 Case-R5 Truck 8,098 8,012 8,012 8,012 8,012 8,012 Railway 864 867 880 877 873 848 Inland Waterway 41 41 41 41 41 41 Total 9,003 8,920 8,933 8,930 8,926 8,901 Difference with Cost of - 83 70 73 77 102 Case-0 Length of New Line (km) - 25 30 40 70 95 Cost Saving per km 3.32 2.33 1.83 1.10 1.07 Rank - 1 2 3 4 5 Source: Estimated by JICA Study Team

Some explanations of how to read the traffic volume on the figure are given below. For instance, Case-R5 presents the traffic volumes of 1,308 thousand tons/year, 921 thousand tons/year, and 499 thousand tons/year for the line sections of (a) Port Said Port (West) – Suez, (b) Zagazig – Suez, and (c) Port Said Port (West) – Suez, respectively. Then, the following functions can be identified based on Case-R5 in Figure 3.3.18: (a) + (b) = 921 thousand tons/year (a) + (c) = 1,308 thousand tons/year (b) + (c) = 499 thousand tons/year Then, we arrive: (a) = 865 thousand tons/year, (b) = 56 thousand tons/year, (c) = 443 thousand tons/year. This means that the railway traffic volume of freight for export/import between Ismailia and Zagazig is composed of (a) = 865 thousand tons/year and (b) = 56 thousand tons/year, and total volume amounts 921 (=865 + 56) thousand tons/year.

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3.3.6 Inland Waterway Capacity and Transport Demand in 2022 Table 3.3.23 presents a capacity of inland waterway, transport demand of export/import freight in 2022, and the V/C ratios. Capacity of inland waterway is dependent on that of locks and its figures in Table 3.3.23 are thus the potential capacity after the repair works of locks. As of 2007, the JICA Study Team could not confirm the lock repair projects of two major corridors: Alexandria Port – Cairo and Damietta Port – Cairo, but these figures are the only one reliable data about the capacity. In this capacity analysis of inland waterway assumes the lock repair works will be completed by 2022. Table 3.3.23 Capacity and Transport Demand of Inland Waterway in 2022 Forecast of Items Capacity of Inland Waterway Export/ Import V/C Freights in 2022 (twin-unit/ day) 1) (‘000 ton/year)2) (‘000 ton/year)2) Alexandria Port – Cairo 32 13,920 264 0.02

Damietta Port – Cairo 13 5,655 156 0.03

4) Upper Egypt - Cairo 12 5,520 261 0.05 Note: 1) “The Development Study on the Inland Waterway System in the Arab Republic of Egypt”, (JICA, 2003. Figures in this column were calculated based on the navigation conditions after repair works of locks, and they are thus possible and maximum figures. 2) Dead weight is assumed 1,450 ton/unit, and working days/year is assumed 300 days/year. 3) Forecast results of the JICA Study Team are based on the potential demand of modal shift from other modes with consideration of commodity features and actual economic growth performance. This approach is different from the target-oriented approach that pre-sets the targeted shares of inland waterway service (= 21% both for Alexandria Port – Cairo and Damietta Port – Cairo). 4) This estimation has been carried out assuming that the water depth is dredged to make the practical use of river transportation.

Forecast volumes of two major corridors account for small share of the potential capacity after the repair works of locks, and the V/C ratios thus appear very small. With the assumption that the locks will be improved by 2022, the V/C ratios in Table 3.3.23 are useful to advocate that the export/import freight volume of inland waterway in 2022 can be smoothly transported and does not require any further significant improvement project as for the capacity of canal and lock are concerned. Besides these factors, there is other factor that constrains the transport capacity of inland waterway: that is river port. At present, there is no active river port for public use, and it is a most serious constrain of the inland waterway services near the Greater Cairo Region. As for the inland waterway route of Upper Egypt – Cairo, no data of transport capacity is available: however, the width of the River Nile suggests that there is no serious capacity problem. Besides the canal and lock capacity, other apparent constrain can be a capacity of river port for freight transport, and no public river port is open to the public as of 2007. In this capacity analysis of inland waterway, it is assumed that public port for freight will be available in and around the Greater Cairo Region by 2022.

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3.3.7 Freight Handling Capacity of Logistics Center This section presents a preliminary capacity estimation of logistics centers that are proposed in Chapter 4. In determining the freight demand capacity requires a detail OD data of the delivery trucks (by commodity) that transport the consumer products to/from the Greater Cairo Region (GCR) i.e. the traffic data inside the GCR: however, the JICA Study prepared only the OD tables of export/import freights of major export/import commodities and thus they are not sufficient for this purpose. In addition, the private sector take initiative to establish the logistics centers and their scales are in general determined by the number of participant companies (forwarders, truck transport service companies, warehouse companies etc.) based on their business plans. Land area available can also be a determinant of the scale of logistics center. The JICA Study could not go into the depth of search on the land acquisition at the potential area. The JICA Study approaches thus the required capacity of two logistics centers around the GCR in a different way than the normal traffic demand forecast employs the computer simulation. The JICA Study forecasts that 66 million tons of containers will be transported to/from this country in 2022, and of which about 8.0 million tons of containers will have origin/destination in the GCR. Assuming 4.0 million tons of containers are possible to enhance the logistics efficiency, 2.0 million tons of containers will be required each logistics center in 6th of October and 10th of Ramadan. - Envisioned maximum handling capacity at logistics center in 6th of October: 2.0 million tons per year - Envisioned maximum handling capacity at logistics center in 10th of Ramadan: 2.0 million tons per year Those figures show accidentally quite similar volumes that are handled at the truck terminals in the Tokyo metropolitan area as shown in Table 3.3.24. Their actual handling volumes range from 1.7 million tons of Adachi Terminal to 2.3 million tons of Keihin Terminal.

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Table 3.3.24 Dimensions of Logistics Centers near Metropolitan Tokyo, Japan Keihin Itabashi Adachi Kasai Item Total Terminal Terminal Terminal Terminal Land Area (sq. meter) 242,068 115,828 113,328 184,976 656,200 Number of Berth 428 320 320 460 1,528 Platform (sq. meter) 35,326 22,200 21,000 33,858 112,384 Truck Handling Space (sq. meter) 64,085 35,437 29,024 48,602 177,148 Freight Handling Capacity Terminal 4,380 2,555 2,555 4,198 13,688 ('000 ton/year) Handling Volume/Capacity in 54% 67% 66% 54% 59% 2007 Distribution Construction Area (sq. meter) 32,398 1,897 - 15,093 49,388 Center Total Flow Area (sq. meter) 120,882 6,477 - 84,848 212,207 Freight Volume in 2006 ('000 ton/year) 2,358 1,715 1,687 2,262 8,022 Number of Trucks in 2006 (vehicles/day) 1,250 982 993 1,046 4,272 Note: Many of these truck terminals are composed of truck terminal and distribution center, and there is no large scale of warehouses for storage. Source: Japan Motor Terminal Co.Ltd. (http://www.j-m-t.co.jp/index2.htm)

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3.3.8 Impact of Fuel Subsidy Reduction One of the reasons of overwhelming share of truck services is attributable to fuel price that is subsidized. Due to the considerable fuel subsidy, the government can supply the gasoline at low retail price in 2005 (Figure 3.3.19). US$ per Gallon

Country Name Source: Country Report (2006), International Monetary Fund (IMF) Figure 3.3.19 Comparison of Retail Gasoline Price

In cases where the fuel subsidy is reduced to the international price level, the government expenditure equivalent to tax amount is expected to be shifted to other sectors5. In the condition of present transport cost system, transportation costs of railway and inland waterway will be equal to those of the truck when their travel distances reach 342 km and 267 km respectively. Since the distance between Cairo and major ports as shown in Table 3.3.25 is shorter than these distances, the modal shift will not happen easily under this condition. Table 3.3.25 Distance between Cairo and Major Ports (Unit: km) Mode Alexandria Damietta Port Said Suez Sokhna Truck 220 200 200 140 140 Railway 210 220 240 170-250* 220-300* Inland W.Way 220 250 - - - (*) The distance is different depending on the degree of the newly open of the railway line.

Moreover, because the Government of Egypt is paying the subsidy of 72.6% of the diesel oil price, the transport cost for truck is cheaper than other modes now. Therefore, if it is possible to cut the subsidy, the domination of transport by trucks will fall and the modal shift to railway and inland waterway will be promoted consequently. For instance, when the subsidy is reduced up to 50% of the diesel oil price, the competitive distance for railway and inland waterway falls down to 342 km and 309 km, and if the subsidy is cut completely, the break even distance falls to 267 km and 242 km. This relationship is shown in Figure 3.3.20. The estimation method for the change of break even distance is

5 According to United Nation Environment Programme, gradual energy subsidy removal (reduction) in some countries has proceeded along with compensatory measures to support segments of society that are negatively affected.

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THE STUDY ON MULTIMODAL TRANSPORT AND LOGISTICS SYSTEM OF THE EASTERN MEDITERRANEAN REGION AND MASTER PLAN FINAL REPORT shown in Appendix-3. In order to reduce the transport cost of railway and inland waterway and make them competitive with road transport, it is necessary to explore other means such as reduction of handling charge for reloading between truck and other modes. In case the handling charge is discounted to 15 LE/ton (40% off), the break even distance between truck and railway, truck and waterway are shortened to 213 km and 167 km respectively. These results imply that modal shift is possible between GCR and major ports. This scheme however is very difficult to achieve. The hope here is that as the business involving transferring of freight from one mode to another thrives, the cost will naturally decreases. Of course other creative means such as subsidy policy shall also be explored.

360 340 Railway 320 300 280 260 240 220 IWT Competitve Distance km Competitve 200 180 80 60 40 20 0 Subsidy %

Source: Estimated by JICA Study Team Figure 3.3.20 Change of Break Even Distance according to the Subsidy Reduction

In addition, if the logistic center (LC) will be opened around the Cairo and the customs clearance work of a lot of containers will be operated with LC, the feeder transport between LC and shippers will be done by trucks. In this case, handling cost between the trunk transports by each mode and feeder transport will be same, the shipper can decide the trunk transport mode in consideration of the line haul cost and transport time by each mode.

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