Amal Cover Transportation 05

Transportation Sector January 2009 Transportation Sector Table of Contents Snapshot ...................................................................................3 The Sector and the Economy ....................................................4 Economic Flash ......................................................................4 Transportation Sector: Economic Dimension .............................5 Granted Finance .....................................................................6 The Ministry of Transport ..........................................................8 Regulatory Highlight- Investment Promotion Law and the Transportation Sector .........................................................9 National Agenda 2008 - 2010 ...................................................10 Air Transportation .....................................................................12 Land Transportation ..................................................................17 A- Public Transportation ..........................................................17 B- Freight Land Transport ........................................................22 Maritime Transportation ...........................................................24 The Aqaba Port .......................................................................24 Jordan Maritime Authority - JMA .............................................26 Railways ...................................................................................28 Railway in Jordan ...................................................................28 Pipeline .....................................................................................30 Arab Gas Pipeline ...................................................................30 Other Aspects of Transportation; Logistics ...............................31 Logistics: Courier Services Sector ............................................31 Key Players ...............................................................................32 Financial Review ......................................................................35 The Index ...............................................................................35 Balance Sheet ........................................................................36 Assets....................................................................................36 Debt and Equity ......................................................................37 Income Statement ..................................................................37 Profitability .............................................................................38 Summary & Conclusion ............................................................41 References................................................................................42 Transportation Sector Transportation Sector Snapshot Situated strategically at the tip of the Red Sea, which links Africa to the west with Asia to the east, and laying within close proximity to Europe in the north, Jordan has historically served as a transit hub for goods and services, travelers, and pilgrims. Furthermore, despite the country’s lack of natural resources and its sensitive Middle Eastern location at the heart of the region’s political turbulences, Jordan’s affirmative political standing coupled with an abundance of historically noteworthy, religiously significant, and naturally unique landmarks have all succeeded in attracting an increasing number of tourists each year. These factors have all given special importance to the country’s transportation sector. During the centuries that Jordan had acted as a crucial gateway, located on some of the most important ancient trade routes, global markets and businesses have evolved in sophistication, efficiency and technological advancement. The need for speedy communication channels became increasingly evident, and the prospects of life were revolutionized on all fronts including transportation and communication. In order to keep pace with such a trend, and given the country’s naturally borne role in international trade, the Jordanian government realized the importance of giving top notch priority to the transportation sector’s infrastructure by devoting high levels of investment. Thus, in 008, the Ministry of Transport (MoT) adopted the government’s vision and translated its aspiration into a three year national agenda that set the overall framework for the sector’s development. This plan promotes sound competitiveness and encourages private sector participation. A large section of the national agenda focused on the aviation industry, which is increasingly growing in importance as a key means of transportation worldwide. Airport infrastructure developments topped the government’s priorities, as explicitly embedded in the Queen Alia International Airport’s expansion project; a tender that was granted to the Airport De Paris consortium. Accordingly, the airport’s rehabilitation process started in 16 November 007 and is estimated to carry on through 5 years. Land transport, which is Jordan’s main means of transportation, also made up a major section of the government’s plan; the development of the main, secondary, and rural road networks has overstepped several milestones during the past 0 years, leaving a notable impression on Jordan’s general outline. Nevertheless, the current network had initially been planned without taking into consideration the possibility of an explosive growth of population, as occurred recently due in large to the influx of migrants from neighboring countries and the return of many Jordanian expatriates. As such, existing roads failed to totally digest the traffic congestion caused by the accelerated number of vehicles. This triggered the Greater Amman Municipality’s concern, encouraging it to incorporate additional developmental and expansion goals into the strategic outlook, taking into account the threat of the notable increase in the number of accidents over the past decade or so. Despite the fact that Jordan lacks access to major water fronts, maritime transportation was given its fair share in the national agenda, which demonstrates the importance of the Port of Aqaba as a strategic waterway that contributes sufficiently to the national economy. Although Railways are currently a rarity in Jordan, the agenda shed light on the importance of reviving and developing this sector as an efficient and economic alternative to road transport. The plan outlined a number of proposed railway tracks, including the Amman - Zarqa Light Rail project as part of the Jordan Railway Master Plan, which has caught much of the media’s attention at late. The government is dedicating significant efforts into attracting the required investments to steer these projects into operation by no later than 011. Recent economic figures issued by the Department of Statistics (DoS) placed the transportation sector among the country’s fastest growing economic sectors, in fact, the transportation and communication sector grew by 7.% during this year’s second quarter (Q), contributing by approximately 1% to the nation’s GDP during the period. Last year, the government had set aside a significant proportion of its 008 annual budget to transportation related projects, and recent figures reveal that roughly 57.9% of the budgeted allocations were already utilized by July 008. Additionally, according to the DoS, the transportation sector’s prices grew by .9% during the first ten months of this year compared to the same period of 007. Meanwhile, the CPI grew by 15.6% covering the same period. The Sector and the Economy Economic Flash There are major economic challenges facing the economy of Jordan. Given the 008’s second quarter performance, GDP grew by 6.7% by June 008, recording a lower growth rate than the one that prevailed in the same period of 007 and 005 that stood at 7.% and 9% respectively. Growth Rates of GDP for the Second Quarter 2005-2008 10 8 6 4 2 0 2005-Q2 2006-Q2 2007-Q2 2008-Q2 Source: Department of statistics Inflation % 18 16.2 16 15.6 14 12 10 8.2 8 6.6 6.25 6 5.4 4 3.5 3.6 4 3.4 3.2 3.1 3 2.2 1.8 1.8 2 1.6 0.7 0.6 0 8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Oct-0 Source: Central Bank of Jordan & the Department of Statistics Transportation Sector Jordan economy remains under the pressure of public debt, inflation, and trade balance. The outstanding external public debt stood at JD ,591.9 million by the end of September 008. Inflation on the other hand reached unprecedented levels as it jumped to 15.6% by the end of October. Such inflation figure is recording a historical level if taken on a span of 18 years considering that 007’s yearend rate didn’t surpass 5.0% from 006’s rate of 6.5% The trade deficit is considered as one of the major challenging factors restraining the economic prosperity. The deficit reserved 0.1% of 007’s GDP, while it represented 19.6% only of 00’s GDP. 008’s first 10 months figures revealed an increase by 7% in the trade deficit to record JD 5,675 million as the value of imported merchandize reached JD 10,0. million while the value of total merchandize exported reached JD ,67.1 million. Transportation Sector: Economic Dimension Transportation sector holds a significant importance in the economy of Jordan, where the government had realized the importance of investing into the transportation infrastructure as a solid lever for other sectors’ prosperity. Efforts of advancement have materialized by 006 when

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