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Zirtbur- .'Little,3hnt.

CAMBRIDGE 42, MASSACHUSETTS

ECONOMIC STUDY OF

INLAND TRANSPORTATION IN EGYPT

Report to U. S. Government Foreign Operations Administration

Under Contract S CC-21504 C-58780-13

ARTHUR D. LITTLE, INC. Cambridge 42, Massachusetts May 15, 1954 iii

TABLE OF CONTENTS

Page

INTRODUCTION AND SUMMARY 1

A. ORIGIN AND SCOPE OF THE STUDY 1

B. ECONOMIC GAINS FROM IMPROVED TRANSPORTATION 1

C. CONCLUSIONS 2

D, SUMMARY 3

1. Railways 3 2. Roads 4 3. Waterways 4 4. Traffic 5 5. Transport Cost to the Shipper 5 6. Organization and Finance 5

II. HISTORICAL BACKGROUND OF EGYPTIAN TRANSPORTATION 7

A. EGYPTIAN TRANSPORTATION IN 1800 7

B. TRANSPORT DEVELOPMENT UNDER MOHAMMED ALY 7

C. RAILWAYS 9

D. PORTS AND CANALS 9

I. TRANSPORTATION ROUTES 11

A. RAILWAYS 11

1. The Egyptian State Railways 11 2. Light Railways 12 3. Adequacy of Rail Routes 12 4. Extensions Proposed by the Egyptian State Railways 13 5. Rail Distances from Cairo to the Principal Towns 13 6. Maintenance and Rebuilding of Track 13 iv

TABLE OF CONTENTS (Continued)

Page

III. TRANSPORTATION ROUTES (Continued)

B. ROADS 15

1. The Road Network 16 2. Need for More and Better Roads 17

C. WATERWAYS 18

1. Inland Navigation Routes 18 2. Obstructions to Navigation 19 3. The Mahmudiya Canal 20 4. Proposed Canal Construction and Improvement 20

D. PIPELINES 22

1. Light Products Pipeline 22 2. Projected Fuel-Oil Pipeline 22

IV. EQUIPMENT FOR FREIGHT TRANSPORTATION 24

A. EGYPTIAN STATE RAILWAYS 24

1. Inventory of Equipment as of December 31, 1952 24 2. Equipment Capacity 25 3. Age of Equipment 26

B. ROAD TRANSPORT 26

C. INLAND WATER TRANSPORT 27

V. INTERNAL FREIGHT TRAFFIC 29

A. EGYPTIAN STATE RAILWAYS 29

1. Freight Traffic 29 2. Length of Haul 32 3. Trends of Traffic 32 V

TABLE OF CONTENTS (Continued)

Page

V. INTERNAL FREIGHT TRAFFIC (Continued)

B. ROAD TRANSPORT 33

1. Growth of Highway Trucking 34 2. Freight Hauled by Truck 35 3. Licensing of Long-Haul Trucks 35

C. INLAND WATER TRANSPORTATION 36

VI. COST OF TRANSPORTATION TO THE SHIPPER 38

A. FREIGHT RATES OF EGYPTIAN STATE RAILWAYS 38

B. MOTOR TRUCK RATES 41

C. RATES FOR INLAND WATER TRANSPORT BY BARGE 45

VII. TRANSPORT ORGANIZATION AND FINANCIAL RESULTS 48

A. ORGANIZATION AND CONTROL 48

1. Egyptian State Railways 48 2. Motor Trucks 49 3. Inland Water Transport 50

B. FINANCIAL RESULTS 51

1. Egyptian State Railways 51 2. Motor Trucks and all Road Transportation 52 3. Inland Barge Navigation 52

VIII. PLANNED AND PROPOSED OUTLAYS FOR TRANSPORTATION IMPROVEMENT 54

A. RAILWAYS, PIPELINES 54

B. ROADS 56

C. WATERWAYS 57 I. INTRODUCTION AND SUMMARY

This report is an economic survey of interior transportation of com­ modities in Egypt. It contains the available basic information concerning freight transportation by rail, road, and water, in terms of routes, equipment, traffic, rates, organization, and projects for transportation improvement.

A. ORIGIN AND SCOPE OF THE STUDY

The study has been made as a subsidiary project in partial fulfillment of the agreement between the United States Technical Co-operation Administra­ tion and the Government of Egypt for the assessment of Egypt's industrial poten­ tial.

The purpose is two-fold. First, it is intended to inform officials of the Government of Egypt concerned with the planning and operating of transporta­ tion, and also interested officials of the United States Operations Mission to Egypt and its parent organization in Washington, the Foreign Operations Adminis­ tration. Second, it is intended to sipply background information for further studies of transportation of an engineering nature. An engineering survey of transportation is one of the studies to be :arried on by Arthur D. Little, Inc., under the extended program approved by the 1954 agreement between the United States Operations Mission and the Government of Egypt. 1

B. ECONOMIC GAINS FROM IMPROVED TRANSPORTATION

Cheap transportation is necessary if industry is to achieve its poteitial in Egypt, and if industry and other sectors of the economy are to be permitted to make their largest possible contribution to the growth of the total national o.itput and to the living standards and the productive capital of the country. In the 19th century, Egypt, like other developing economies, was opened up to trade and secured access to markets for its produce, through the introduction of new, more efficient modes of transport. Railways and canals

1 Highway engineering and related problems have been investigated as a part of the initial program of industrial studies in Egypt by Arthur D. Little, Inc. The Egyptian Highway Study (in two sections, dated July 15, 1953 and May 30, 1954) reports on construction methods, road system planning, and related problems. 2

made Egypt a part of the world economy, bringing its commodities into the chan­ nels of international trade. They permitted the country to increase the purchas­ ing power of its exports and enabled it, through importation, to enjoy the fruits of international specialization in production.

The present study is justified by the importance of transportation for the development of an economy. This importance is all-pervading; neither agriculture nor industry can flourish and grow without efficient transportation. Cheap transportation is often the key to ready access to markets. Both agricul­ ture and industry need not only markets but also cheap raw materials. These are particularly imperative for industry since it is characterized by a processing or fabrication of primary products originating elsewhere

Consumer purchasing power is another vital factor for agricultural prosperity and industrial development. Larger income from agriculture arises from greater sales of agricultural produce made possible by cheaper, faster and more efficient transport of agricultural products. Thus transport improve­ ment contributes doubly through agriculture to the expansion of industry, not obly lowering delivered prices of agricultural products sought by industry but also by increasing industrial markets in agricultural arcas.

Further progress is possible in securing maximum benefits for Egypt from railways and inland waterways, despite their relatively advanced state of development, chiefly through lowering costs and freight rates. Larger frontiers remain to be exploited, both intensively and extensively, by development of roads to a degree commensurate with railways and water transport.

C. CONCLUSIONS

The current state of internal freight transportation in Egypt may be characterized tentatively as follows:

(1) Routes. As to routes, railways appear relatively adequate al­ though extensions have been projected and extensive deferred maintenance is present. More and better roads are greatly needed; access to many localities by motor vehicle and even by carts or wagons has been difficult if not impossible. Improvements in the condition and operation of existing inland waterways have been urged, and new waterways have been suggested. Improvements and ex­ tensions of all transportation routes now planned or proposed would go far toward meeting Egypt's needs for transportation routes.

(2) Equipment. The capacity of transportation equipment now on hand is adequate for current needs, and indeed, in the case of barges, exceeds the present reduced demand. Much railway rolling stock is over-age, and an 3

extensive replacement program has been projected. Barge traffic will expand with the opening of projected fertilizer and iron and steel plants; capacity can be increased up to 50 percent if existing barges are lengthened.

(3) Spending for transport improvement. Transportation facilities are now the object of greater emphasis by the government of Egypt. In the budget for the fiscal year ending June 30, 1954 a total of LE 9, 107, 000 was allocated for spending on transportation facilities--for extensions, improve­ ments, and replacements. A projected ten-year road program would cost at least LE 30, 000, 000. The Egyptian State Railways seeks to spend LE 42, 680,000 on equipment and track replacements and -LE 9, 000, 000 on new lines in a similar period. Improvements in waterways are being projected.

(4) Economic condition. Generalizing on the apparent economic condition of the internal transportation industries, it appears that: (a) the Egyptian State Railways have suffered large losses of traffic chiefly to trucks; (b) barge operators are handicapped in competing for traffic, and (c) all trans­ portation suffers financially from more severe competition brought on by a slump of traffic since 1951, traceable perhaps chiefly to the reduction of imports under exchange controls in line with lessened foreign exchange earnings from Egypt's chief exports.

The statement may be hazarded that the cheapest and most efficient modes of organization and operation of internal transportation in Egypt have yet to be established. An economically rational transportation policy is needed as well as physical improvements, to assure the country the efficient, reasonably low-cost transportation whi ch is essential to the further development of Egypt's internal and international trade and its industry and agriculture.

D. SUMMARY

1. Railways

Egypt's railways consist of 3740 kilometers of main lines reaching most economically important parts of the country, supplemented by auxiliary and narrow gauge lines. The equipment of The Egyptian State Railways includes 17, 500 freight-carrying vehicles, with a capacity of about 200, 000 tons. Capacity is approximately sufficient for current traffic. Nearly all of the ap­ proximately 800 passenger and freight locomotives are steam in type.

The Egyptian State Railways have budgeted -LE 2, 500, 000 to be spent on new works in the fiscal year ending June 30, 1954. In addition the Permanent Council for the Development of National Production budgeted LE 2, 360, 000 4

for additional railway capital outlays. The Council also budgeted LE 1, 000, 000 for a fuel oil pipeline projected from Suez to Cairo and to be operated by the Railways, which haul most of the internal traffic in petroleum products.

The Egyptian State Railways have projected a further program to cover 10 years, envisioning the spending of LE 22, 680, 000 for new equipment, LE 20, 000, 000 for track renewals, and LE 9, 000, 000 for line extensions and improvements.

2. Roads

The road system consists of 4000 kilometers of paved highway and 13, 000 kilometers of earth roads, varying in quality from very good to very bad.

Privately owned motor trucks number 15, 000, of which perhaps 2000 with a capacity of about 12, 000 tons are operated as commercial or public car­ riers over long distances in competition with railways and barges.

The Permanent Council for the Development of National Production authorized LE 3, 000, 000 for fiscal year 1953-54 for new road construction. Contracts for paving and for other improvements have been let for most of this sum. This allocation provides for the first half of a two-year road program which is designed to provide Egypt with 500 kilometers of additional pavements and with extensive improvements of other roads in preparation for paving. The two-year program, the first phase of a projected 10 year plan, to cost LE 30, 000, 000 or more, has been outlined in the second highway report of Arthur D. Little, Inc., on road construction methods and planning for road improvements. Budget authorizations of road expenditures for national pro­ duction development were supplemented by an allocation of LE 247, 000 in the regular budget of the Government to the Department of Roads and Bridges for "new work".

3. Waterways

Many navigable waterways exist, thanks chiefly to the Nile and the elaborate system of irrigation works. The waterways are not yet operated efficiently because of several easily remediable factors; moreover a number of improvements appear needed.

Barges for inland navigation have a total capacity of 130, 000 to 140,000 tons. 5

No separate budgetary authorization in either the regular budget or the budget for national production development for fiscal year 1953-54 was made for projects specifically or primarily benefitting inland navigation. However, the Permanent Council has authorized LE 900, 000 for completion of the new Cairo-Alexandria waterway, a project that will require several years. Other benefits may accrue to inland navigation as incidental results of improvements in irrigation.

-. Traffic

Freight traffic of The Egyptian State Railways totalled 3. 7 million metric tons in the fiscal year 1952-53. Perhaps 3 million tons were carried by truck in competition with the railways and barges. Five times as many trucks as in 1939 are now in use. The poscwar trend of freight traffic on the State Railways has been downward, but now seems to be stabilized. Barges carried 762, 000 tons in 1953, a decline of 14 percent from the peak of 1951.

A breakdown of railway and barge traffic by type of commodity is presented in the body of the report.

5. Transport Cost to the Shipper

The cost of transportation by rail averages about 4. 1 rnilliemes1 per metric ton-kilometer (1.7 cents per U.S. ton-mile), with wide variation from one commodity to another. Rates on manufactures are relatively high, except for such bulk commodities as f.2rtilizcrs and petroleum products. Truck rates tend to a level of about m/ms 10 per metric ton kilometer (4.2 cents per U.S. ton-mile) for heavy commodities over long distances and match some rail rates; but are higher for lighter commodities or fol hauls under other conditions making for higher cost. Water transport by bac , on the Nile above Cairo is low in cost, less than 1. 0 m/ms per ton-kilometer (0.4 cents per U.S. ton­ mile). For the Alexandria-Cairo haul, on the other hand, rates at present ten.-I to a level close to those of the railways.

S. Organization and Finance Except for the Egyptian State Railways, transportation is privately owned and operated. Neither truck nor barge rates are as yet regulated. The

1 One Egyptian pound (LE 1. 00) equals $2. 87 at the official rate of exchange. LE 1.00 comprises 100 piasters or 1000 milliemes. 6

financial position of all carriers has recently been deteriorating, and the Egyptian State Railways has incurred deficits increasing to LE 3, 000, 000 in the fiscal year ended June 30, 1953. Competition in transport may be limited shortly by reducing the number of trucks licensed for operation throughout Egypt. Motor transport as a whole pays a large revenue, as high as LE 3, 000, 000, to the government chiefly in the form of taxes on motor fuels, customs duties and license fees. 7

II. HISTORICAL BACKGROUND OF EGYPTIAN TRANSPORTATION

Modern Egypt dates from about 1800, a year marking the end of cen­ turies of decline. Since 1800, the population has multiplied almost 10 times. This population growth reflects an increase of productivity and trade of the country. Transportation development is one of the factors that has contributed to the expansion of output and trade.

A. EGYPTIAN TRANSPORTATION IN 1800

Transportation within Egypt in 1800 was extremely primitive. Although water transportation was available on the Nile transport by land was on foot or by animal, chiefly camels and donkeys. Egypt had no roads and no wheeled 'ehicles. Moreover, the streets in towns were so narrow and ill-paved that the use of carts would have been impractical. Water transport on the Nile,facilitated by the prefailing north-to-south wind, was almost the sole means of long-distance communication. A canal which had once conn. cted Alexandria with the Nile, be­ fore the Arab invasion in 642 A D., had fallen into disuse.

At the beginning of the 19th century, each town formed a largely self­ contained economic unit with its adjacent agricultural area. Although there was very little interior trade, a small export and import trade was carried on the Nile to and from Cairo and Europe. There was also limited commerce between Cairo and Upper Nile trading centers as Assiut, Esna, and two or three other locations which were termini of claravar rc 1 .

Important trade for that period was carried on with the interior of Africa and with Arabia and Europe. An annual caravan came overland from Darfur in the Sudan to Assiut; it then continued by the Nile to Cairo. Another caravan came several times a year from the Sudan across the desert to Darfur and Esna, and then also by the Nile to Cairo. Arabian trade was carried on through the port of Quseir, and from there by camel to Qena on the Nile. The principal Mediterranean ports were Rosetta and Damielta, both of which had poor harbors. Alexandria, the only good natural port, *Aas in a state of decay, but larger ships had to use it. Passengers and freight for the interior of Egypt had to be transported across the desert to the Nile, or by smaller vessels to Rosetta or Damietta.

B. TRANSPORT DEVELOPMENT UNDER MOHAMMED ALY

The revival of modern Egypt started with the reign of Mohammed Aly, who made himself ruler of Egypt in 1805. In the period from 1805 to 1816, 8

Mohammed Aly suppressed threats to his power from a number of sources, re­ formed taxation, eliminated the privileged land-owning class, took over nominal ownership of all lands, established discipline in the country, and brought about peace and order. After 1816, he started a program to develop agriculture and industry, and also undertook several war ventures.

A principal feature of Mohammed Aly's economic program was the construction of a number of canals in the Delta for carrying summer irrigation water. Another canal venture, the first transport development project of modern Egypt, was the Mahmudiya Canal, constructed in 1819. This canal was dug from Alexandria to Atf on the Nile to provide a navigable waterway and to supply fresh water to Alexandria. The canal was connected with the Nile at Atf by a sluice, so that trans-shipment from canal boats to Nile vessels was required.

The Mahmudiya Canal, a rebuilding of one constructed by Alexander the Great in 331 B. C. , made an enormous economic contribution to Egypt. It connected the interior of Egypt with a good port convenient for communication with Europe. The canal also facilitated the growth of through transport from Europe to India by the Red Sea route. After 1820, there was a large growth in Nile traffic as cotton cultivation was extended and foreign trade grew.

The first railway proposal arose in connection with this overland through route By 1834, a steamship service was in operation from Suez to Bombay. Steam solved the problem of adverse north-to-south winds in the Red Sea which lasted 9 months of the year. In 1834, Mohammed Aly proposed the building of a railway from Cairo to Suez as a faster and more comfortable substitute for canal transpor't However, nothing came of the railway project, despite delivery of five shiploads of rails in 1836. Nevertheless, steam began to be applied in internal transportation; steam tugs towed passenger barges on the Mahmudiya Canal, and the journey from Alexandria to Atf in 1840 required only 12 to 14 hours . The same trip now takes two days because of numerous locks and bridges, uncoordinated and inadequate openings, and other obstacles.

The transportation developments during the reign of Mohammed Aly (which ended in 1849) made numerous and vital contributions to the economy of Egypt. Improved transport permitted the development of agriculture and com­ merce, and vastly improved communications with foreign countries. Foreign marketsbecame accessible for cotton and other products; internal prices in Egypt rose relative to world prices, a tendency that is largely attributable to transport development. Moreover, the reduction of prices of imported goods had the incidental effect of depressing local industries, and the country was opened up to European influences and the stimuli of Western progress. 9

C. RAILWAYS

The first railway project in Egypt that passed from the discussion stage into actuality was the Alexandria-Cairo railway. George Stephenson, son of the inventor of the "Rocket" locomotive, was awarded a contract for this line in 1851. The first section from Alexandria to Kafr el Zaiyat was opened 2 years later and the line was completed to Cairo three years later, This was followed by the Cairo-Suez line, built in 1856-57, which, despite a period of 20 years consumed in discussion, beat the Suez canal project,

Later raLlway developments date from 1863, when railway mileage was as yet only 245 In the following 17 years, 910 miles of railway were con­ structed at a cost of more than LE 13,000,000. The principal towns of the Delta were connected by a network of rails, The development of the railway network of the Delta was a key factor in the economic and social progress of the period,

With the opening of the Suez Canal in 1869, overland traffic declined, operation of the Cairo-Suez railway was discontinued, and the line was dis­ mantled. An independent line, built from Cairo southward, reached Asyut in 1874; but this line had no rail connection with Lower Egypt, In 1891, the Upper Egypt line was connected with the Delta lines by a railway bridge at Cairo, Subsequently, the Upper Egypt line was extended to Aswan. Much traffic was diverted from the Nile to the railway, despite the institution of steam-powered vessels on the river,

D. PORTS AND CANALS

Another feature of transport progress after 1850 was the develop­ ment of the port of Alexandria, Harbor improvements were carried out to pro­ vide an extensive protected deep-water anchorage in the outer harbor, and to provide large quays with up-to-date cargo handling machinery and with rail­ road connections to the railway lines into the interior, The Suez harbor was also improved, Steamship traffic became substantial; in 1870, 19 different steamship lines maintained regular services across the Mediterranean to Egypt, Regular steamship services were also maintained from Suez to India and the Far East.

The port of Alexandria, the only Mediterranean port of Egypt which could accommodate steamers, became increasingly important. From 1853 to 1862, 72 percent of the exports of Egypt passed through this port, and in the 9-year period following, 94 percent.

Further canal developments were carried on under KhedivesSaad and Ismail, chiefly to develop and extend irrigation, The Mahmudiya Canal was dredged, and other canals were deepened. Under Ismail, 8400 miles of 10

canals were built. These included two that have become very important in inland navigation: the Beheira Canal, from the Delta Barrage to Kafr el Zaiyat, completing the Cairo-Alexandria waterway, and the Ismailia Canal, connecting Cairo and the Nile with the Suez Canal and tbh- port of Suez. The other principal canal construction in this period was the Ibrahimia Canal in Upper Egypt, 268 kilometers long, which made possible a great extension of sugar cultivation. Operation of barges began on Egypt's inland waterways about 1900. III, TRANSPORTATION ROUTES

Most of the important economic areas of Egypt are served by rail transnortation. The Egyptian State Railways closely approach full route de­ velopment, although completion of a northern Delta link and several other ex­ tensions are projected. Few highways have been improved, and many of the agricultural routes are little more than dirt tracks. Moreover, many villages cannot be reached by any road. Waterways provide a number of inland navi­ gation routes, ctriefl-,'in the north-south direction, some of them navigable b-/ barges of a 200-ton capacity or more. An 8-inch pipeline carries gasoline and kerosene from the refineries at Suez to Cairo.

A. RAILWAYS

The Egyptian State Railways comprise all the main and important branch railway lines in Egypt. These are supplemented by certain obsolescent light railways with 1397 kilometers of line, chiefly in the Delta

1 The Egyptian State Railways

The main lines of the Egyptian State Railways, on which passenger trains operate, total 3740 kilometers--2480 kilometers in Lower Egypt and 1260 kilometers in Upper Egypt The total length of all track in 3uch main lines is 4733 k.lometers in addition, 430 kilometers of standard gauge aux­ iliary lines serve the sugar cane areas in Upper Egypt Finally, a line of 75­ centimeter gauge and 198 kilometers long connects the Kharga Oasis in the western desert with the Cairo-Aswa main line.

The principal lines include: (a) the double-track Cairo-Alexandria main line; (b) a network of branch and secondary lines in the Delta, (c) the Cairo-Aswan line along the Nile, which is double-track as far as Asyut; (d) a double-track line from Benha (north of Cairo) east to Ismailia (the central point in the Canal Zone), with branches running south to Suez and north to Port Said, and (e) a line from Cairo east to Suez. Less important lines in­ clude a branch into the Falyum area southwest of Cairo, a narrow gauge line from Alexandria along the coast to the Libyan border, and the link from north of Ismailia to the Palestine Railways. The only important agricultural area, far from _aita ; lines, is the central Lvv;-r Delta close to the coast. However, a portion of a projected Lower Delta line has been completed eastward from the Rosetta or western branch of the Nile 12

2. Light Railways

The privately owned railways consist mainly of three systems of narrow (2-foot or 75-centimeter) gauge lines comprising 861 miles of track. These are:

(1) The Delta Light Railways, with 977 kilometers of line,

(2) S. A. des Chemins de Fer de la Basse Egypte, with 252 kilometers of line, and

(3) The Fayoum Light Railways Company, with 168 kilometers of line.

The first two provide local and cross-country transportation in the Delta, and the third provides local service in the Fayoum area.

In 1952 the equipment of these lines consisted of 187 locomotives, 1773 freight cars, and 449 passenger cars. Although these lines have recently hauled about 20 million passengers and 1 million tons of freight annually, their traffic is decreasing. These systems have been operating at a loss from some years; they have been using obsolescent equipment, which, along with track, has been rapidly deteriorating. The Delta Light Railways, having suspended operation in July 1952 because of inability to meet operating expenses, were taken over by the Government. Government operation and subsidy appear necessary if this system is to be kept running, although its real necessity is questionable.

These light railways are also obsolescent in function. Increasingly trucks and busses, using the improved and enlarged road network, have been taking over the passenger and freight-hauling fune ions of the once-vital light railways. Lines operating at a loss may be abanf,. ned in the future, except where no roads are available.

3. Adequacy of Rail Routes

Egypt's supply of railway lines is good, and compares favorably with other countries. The 5000 odd kilometers of all lines represent 14 kilo­ meters of line for every 100 square kilometers of inhabited area. Although below Belgium, the United Kingdom, and Germany in density of line, Egypt is almost equal to France and is well above Italy, Japan, and Greece. Traffic density is fairly high. In 1937 the E.S.R. hauled 500, 000 ton-kilometers of freight per kilometer of line, compared with 1, 170, 000 in Germany, 830, 000 13

in Great Britain, 500, 000 in Canada, and 210, 000 in Sweden. Passenger traffic on the main lines in 1937 was 10, 000 per kilometer of line, or one­ third the passenger traffic density of Great Britain and Germany.

Upper Egypt, in fact, is especially well provided with rail trans­ portation. The Cairo-Aswan line serves a valley that is only 15 kilometers or narrower in width--in some places only 1 kilometer. A branch from Beni Suef runs westward to serve the Faiyum area.

Construction of the Lower Delta line close to the coast, between the two branches of the Nile, from Mutabis to Bilqas, would substantially com­ plete the rail network in Egypt. This line would open a direct rail route east from Alexandria to the Damietta branch of the Nile.

4. Extensions Proposed by the Egyptian State Railways

Tmprovements projected by the Egyptian State Railways include certain line extensions that would reach into areas not now, accessible to rail transportation, Among these are (a) completion of the Mutabis-Bilqas line-­ 75 kilometers- -through a territory not now served by other means of trans­ portation., (b) construction of a line west of the Rosetta branch of the Nile, from Tewflklah to Mellaha--98 kilorneters--which would serve a cultivated area adjacent to land that can be reclaimed, and also provice a relief line di­ verting freight traffic from the main Cairo-Alexandria line, and (c) construc­ tion of a new line from Helwan, 30 kilometers south of Cairo on thie east bank of the Nile, to Fl-Saff, ard on to a connection with the main line on the west bank, to sei re a district now without land transportation.

5. Rail Distances from Cairo to the Principal Towns

TABLE I gives the distances (in kilometers) via the lines of the Egyptian State Railways from Cairo to the principal cities and towns of Egypt.

6. Maintenance and Rebuilding of Track

The roadbeds of the Egyptian State Railways are still thought to be suffering from the undermaintenance of the war years. Rail and tie renewals are in progress, but much remains to be done. Smoother track would reduce repair and maintenance expense on both equipment and roadway, and might permit increase of operating speeds. 14

TABLE I

DISTANCES FROM CAIRO TO PRINCIPAL CITIES AND TOWNS IN EGYPT VIA EGYPTIAN STATE RAILWAYS

Distance Cairo-to-Alexandria Line (kilometers)

Benha 45 Tanta 86 Kafr El Zaiyut 104 Damanhur 147 Kafr El Dauwar 182 A]exandria 208

Tanta-to-Damietta Line

Mehalla el Kubra 114 Mansura 146 Shirbin 170 Damietta 205

Cairo to Canal Zone via Benha and Ismailia

Zagazig 22 Ismailia 155 Port Said 233 Suez 238

Cairo-Suez Desert Line

Suez 141

Central Lower Delta

Kafr el Sheikhi 149

Cairo-Aswan Line

Beni Suef 124 Faiyum 130 Minya 247 Asyut 375 Luxor 671 Aswan 884 15

Historical data on freight hauled for the account of the E. S. R. may give some indication of wartime undermainterance. Such freight, or "service transports" (including fuel), averaged about 2, 430, 000 tons annually in the 5­ year period ending April 30, 1940, but only about 1, 460, 000 tons annually in the 5-year period ending April 30, 1945. In the last 5-year period ending June 30, 1953 "service transports" averaged about 1, 850, 000 tons, still far below prewar figures.

Rail in 435 kilometers of track has been renewed in the 10-year period ending December 31, 1952. Rail in 800 kilometers of track at that date was between 11 and 20 years old; in 1100 kilometers, between 21 and 30 years old; and in 1400 kilometers, between 31 and 40 years old. The Egyptian State Railways consider the age limit of rail to be 40 years; at the end of 1952, 1000 kilometers of track contained rail over 40 years old.

The Egyptian State Railways has projected a program of rail re­ newal for the next 10 years at the rate of 200 kilometers annually. Half of this program would be for normal renewals of 100 kilometers annually, and half for catching up on deferred renewals. After the 10-year period, renewal is anticipated at 100 kilometers annually.

The Egyptian State Railways regards the life of ties (or sleepers), as 20 years. About 1000 kilometers of track are overdue for tie replacement according to this standard. Catching up on deferred tie maintenance is pro­ jected for 10 years at the rate 6f 100 kilometers annually; ln addition, normal tie replacements are projected at 30 kilometers annually.'

The State Railways' estimate of its needs for materials for its 10­ year program is:

200, 000 tons of rails 300, 000 tons of ties

B. ROADS

Egypt has 400 kilometers of first-class paved roads, and 13, 000 kilometers of second and third-class roads with earth surfaces. The road system dates from 1914, and most pavement has been laid down in the last 15 years.

1I Ties have been replaced in 887 kilometers of track since March 1, 1945. 16

Road progress in Egypt is indicated in the following data:

Kilometers of Road Year Unpaved Paved

1913 875 6 1939 8,661 926 1945 11,337 1,847 1952 13,240 3,887

A vast amount of extensions and improvements remain to be made to provide Egypt with road communications adequate for its present needs and sufficient for its agricultural and industrial development.

Some of the principal roads should be widened and resurfaced, many second-class roads should be surfaced, and hundreds of villages should be provided with connections to the road system. More and better roads are urgently needed to premit access to all localities by motor vehicles, and to provide cheaper, more efficient motor transport for faster, safer operation with less wear and tear on vehicles.

1. The Road Network

The first-class roads are paved chiefly with asphalt, but have some concrete surfaces. Pavements are 6 to 7 meters wide, and over-all road widths are 12 to 14 meters. Second-class roads are 8 meters wide, and third-class roads 6 meters or less.

The first-class roads connect the capitals of districts and reach most of the larger towns. The principal paved roads include the Delta and desert roads from Cairo to Alexandria, the Cairo-Suez desert road, the road from Tanta in the central Delta northeast toward the port of Damietta, the road from Tanta eastward to join the Cairo-Ismailia road, the Cairo-Ismailia road, the Suez Canal Company's highway from Port Said to Suez, the Cairo- Faiyum road, and parts of the main road in the Nile valley south from Cairo.

Second-class roads,which serve as feeders to the main highway system, are accessible from mui villages by third-class roads. Roads of both classes run chiefly along canal and ditch banks.

The road system is of varying importance for truck operation. The roads connecting Cairo with Alexandria, Port Said, Suez, and Ismailia are the most important for motor truck traffic. Some road freight traffic moves up and down the Nile valley south of Cairo. Generally, trucks are driven direct to fields to pick up produce wherever the existence of some sort of road permits. 17

2. Need for More and Better Roads

More and better roads of each of the three classes are needed, and many improvements are now being planned as parts of a proposed 10-year program. Some existing roads should be improved if they are to permit reasonably fast, low cost, safe operation of trucks and other motor vehicles, and many should be constructed to bring motor transport with its advantages of speed and flexibility to all parts of Egypt sigrificanI for production.

Some existing surfaced highways need wider and smoother pavements and shoulders--which would contribute both to faster, cheaper road transport and to greater highway safety--and perhaps bypasses around large towns. The Cairo-Alexandria Delta road is a prime example Trucks operating between Cairo and Alexandria must use this road, snce the desert road is open only to passenger automobiles and to busses The Delta road, like other paved roads, has two lanes, the shoulders are often narrow with closely flanking trees, and it passes through large towns, such as Benha and Tanta. Since truck traffic moves slowly, only a one-way irip is possible in a working day over the 125 miles between Cairo and Alexandria Donkey carts, animals, and pedestrians often slow traffic in the country, congested, narrow streets prolong the passage through towns and in the cities, and make the operation of truck trailers impracticable E-lensive reconstruclion projects for parts of the Cairo-Alexandria Delta road are among the improvemenfs now under con­ tract.

Third-class roads should be extended and improved for a number of reasons Because of their location on canal and ditch banks, water bar­ riers often cut off or make circuitous their access to adjacent areas. Since the canals run chiefly in a northerly direction, east-west communications across the Delta are especially limited Also, the narrowness of many roads makes the operation of motor trucks difficult, although the narrow streets of villages are The more serious problem. Only footpaths and animal tracks connect hundreds of villages with the nearest roads. Furthermore, the sur­ faces of the earth roads become difficult and even impoisible to use for some days after rains, The second- and third-class roads are of varying quality; some are wide enough and well maintained, but others are poor disI .tegrating, and often little more than dirt tracks, which become qua .. -,after rain. The Department of Roads and Bridges is planning to make temporary improvements in canal- and ditch-bank roads and tracks, pending the completion of the road network programmed by the Department. The program for second- and third­ class roads awaits proper classification of existing roads so that suitable plans can be laid for their improvement. Also, specifications remain to be deter­ mined regarding road width and type of surface. 18

C. WATERWAYS

Navigable waterways total 3357 kilometers, excluding the Suez Canal. The Nile extends 1552 kilometers from Wadi Halfa at the Sudan border to the Mediterranean. Its length in Upper Egypt, from Wadi Halfa to the Delta Barrage, is 1313 kilometers; in Lower Egypt, from the Delta Barrage to the sea, it extends 239 kilometers. Waterway routes via navi­ gable canals and lakes total 1805 kilometers.

Principal navigation routes include the present route between Cairo and Alexandria, the new Rayah el Beheira waterway (when completed, it will cut in half the present 9-day transit time between Cairo and Alexan­ dria), and the Ismailia Canal between Cairo and Ismailia in the Canal Zone. The Cairo-Alexandria waterway and the Ismailia Canal are estimated to carry well over 90 percent of freight moving by barge on inland waterways. About 2 million tons move annually between Alexandria and Upper Egypt or Cairo by barge and sailing felucca.

1. Inland Navigation Routes

The Nile proper provides the water route for Upper Egypt, although a 350-kilometer by-pass canal has been proposed. There is some navigation on the Ibrahimia Canal by sail boats.

Canals rather than the Nile supply most of the water routes of Lower Egypt The present Cairo-Alexandria waterway begins at the Delta Barrage a few kilometers below Cairo, and enters the Al Baguria Canal, which joins the Nile below Kafr el Zaiyat. The waterway continues in the Nile about 50 kilometers to Atf, then to Alexandria via the Mahmudiya Canal.

The new Rayah el Beheira Cairo-Alexandria waterway also leaves the Nile at the Delta Barrage (but to the west), proceeds in the Al Khandak Al Sharki Canal just west of the Nile to a point opposite Kafr el Zaiyat, and then goes northwest through Damanhur to join the Mahmudiya Canal. This latter canal is not yet ready for barge traffic; however the National Produc­ tion Council has decided that this waterway should be finished by 1957, and a credit of LE 900, 000 has reportedly been opened for this purpose.

The Ismailia Canal is the other important waterway for barge traffic. It runs northeasterly from Cairo 128 kilometers to Ismailia in the Canal Zone. Barges operate through this canl between Cairo and Suez or Port Said. The central and east central Delta :s served only during four months of the year in the flood season by other navigable canals and drains. One 19

route proceeds from the Delta Barrage along the east side of the Damietta branch of the Nile to Mansura, then northeasterly toward Lake Manzala, a large coastal lake west and southwest of Port Said. Another route proceeds northward through the central Delta some kilometers west of the Damietta branch. Several other shorter navigable waterways branch off from or con­ nect the main navigable canals.

2. Obstructions to Navigation

Navigation on inland 'waterways is interrupted by low water in winter, and by the floods of August and September. It is obstructed by locks, bridges, narrow and shallow channels, and inadequate management of water­ ways.

The Mahmudlya Canal is navigable throughout the year; but the other larger canals of Lower Egypt are closed to navigation from mid- December through January.

The Rosetta Branch of the Nile is navigable as far south as Kafr el Zaiyat between April, when the weir at Mahallet el Amir is closed, until the approach of the Nile flood in .ugust, when the weir is cut. From Kafr el Zalyat south to the Delta Barrage, the Rosetta Branch may not be navi­ gable after the Nile flood waters subside--i.e., through the winter period of low water. The Damietta branch of the Nile is not navigable from mid- August through January.

In Upper Egypt, the Ibrahimia Canal is closed from Dairut (60 kilometers north of Asyut and 300 kilometers south of Cairo) northward from late December to mid-February, and vessels cannot pass Dairut during the flood.

The canals and locks regulating the flow of water in the Nile re­ strict the size of vessels that may be employed, and extend transit times greatly. The many bridges and the 17 principal locks and numerous small ones limit the maximum size of vessel usable on the canals of Lower Egypt to 41 meters long and 7 meters wide. Diesel-powered vessels of these di­ mensions would have a draft of 1. 63 meters at maximum freight load of 300 metric tons. The depth of water in canals and locks sometimes enforces shallower drafts. Numerous bridges that require opening to permit the pas­ sage of barges lengthen transit times seriously.

The navigable canals would be increased in capacity, and water transport cost and time of transit lowered, by the following measures:coordin­ ating the hours of opening locks and bridges; coordinating repairs to canals 20

and structures; widening canals; cleaning and dredging canals; and p olicing the flow of traffic, the operating of locks and bridges, and repair work.

3. The Mahmudiya Canal

This canal, the most important waterway in Egypt for inland navigation and the first segment of the waterway from Alexandria to Cairo, extends from the Alexandria harbor about 80 kilometers southeast to the Rosetta branch of the Nile at Atf. The present Cairo-Alexandria waterway continues up the Nile to Kafr el Zaiyat, then via the tortuous, narrow El Beheira Canal to the Delta Barrage, then up the Nile to Cairo.

The Mahmudiya Canal is oostructed by 49 bridges and locks. The Alexandria-Cairo voyage takes 9 days, principally because of these obstruc­ tions and the lack of coordination in their hours of opening. The new Rayah el Beheira--El Khandak el Sharki waterway, which may be opened by 1957 as far as Lake Maryut (its opening into Alexandria harbor will be a number of years later), will be obstructed by only 12 locks and bridges. This new waterway will permit barges 54 meters long (instead of the present 41 meters) to be used between Ciro and Alexandria.

The Mahmudiya Canal is the most significant illustration of the obstacles to low-cost, high-volume, expeditious water transport. In 1952 the Federation of Industries reported that this canal was handicapped because: (a) navigation was slowed by narrowness (caused by lack of cleaning near Atf lock and between Hagar Nawatish and the port at Alexandria) of the channel; (b) the discharge of gravel and bricks from sailboats at many points; (c) in­ sufficiency of openings of the four Kafr el Dawar locks in relation to traffic; (d) lack of coordination and insufficient opening of other locks and bridges, railroad bridges in particular; (e) too brief opening periods, and their can­ cellation often without substitution of other periods; and (f) lack of coordina­ tion of the frequent repair work conducted by various Government agencies, with individual departiz.ents stopping traffic at arbitrary times.

The effective capacity of the existing barge fleet will be increased by the opening of the new Cairo-Alexandria waterway, which will permit shortening the present 9 to 14 days of the Cairo-Alexandria voyage to 5 days.

4. Proposed Canal Construction and Improvement

The Chamber of Inland Navigation of the Egyptian Federation of Industries has recommended certain waterway projects which would permit the improvement or extension of barge operation. These are, in order of 21

their priority: (a) completion of the new Cairo-Alexandria Waterway; (b) en­ trances from the Mahmudiya Canal into the Alexandria Harbor; (c) improve­ ment of the Ismailia Canal; (d) improvement of navigation between Cairo and Aswan; (e) completion of a navigation route linking Kafr el Zayat on the old Cairo-Alexandria waterway to Tanta in the central Delta, Mehalla el Kubra, and northeastward to Mansoura, and (f) a canal link from Tanta eastward to Zigazagand the Ismailia Canal.

One of the two propose±d entrances into the Alexandria harbor would be simple and relatively inexpensive to construct. The proposal is to avoid numerous bridges and a narrow channel and locks just outside Alexandria by diverting canal traffic westward into Lake Maryut from the Mahmudiya Canal. This entrance would involve a canal 1/2 kilometer long to carry traffic back into the Mahmudiya canal just before it enters the Alexandria harbor. The lock connecting the canal with the harbor, now at the harbor entrance, would be moved back to the point where the channel through Lake Maryout rejoins the canal. From this point into the harbor, the Mahmudiya Canal would then be at sea level The Committee on 'nland Navigation of the National Production Council is now studying th..s project.

The second proposed entrance would be several kilometers farther west, and would involve another canal I kilometer long, from Lake Maryout to the westward portion of the Alexandria harbor, High fixed bridges would be installed to avoid bridge openings. Again a lock would be required between the lake and the harbo -

The Rayah el B.heira waterway, whose completion the Chamber has strongly advocated for some years, may be fimnshed by 1957. This water­ way which will reduce the voyage from Cairo to Alexandria from the present 9 or 10 days to 4 days, will permit the operation of barges of a 400-to 500 ton capacity instead of the300-ton maximum capacity permitted by the old Cairo- Alexandria waterway

The Chamber has also recommended to the National Production Council that: (a) bridges be constructed with a clearance of 4 meters above the surface of the water; and (b) the Nile channel above Cairo be dredged at spots to maintain a minimum depth of 1. 5 meters in the season of low water.

Besides these projects, the Chamber has recommended to the Council a new waterway in Upper Egypt between Dairut and Wasta, over 300 kilometers long. The Chamber justifies the project because, unlike the Nile waterway from Assiut, north of Dairut, navigation conditions downstream from Dairut are not satisfactory, especially in the winter period of low water in the Nile. The project plans for expansion of an existing drain into a navigation canal with locks measuring 80 by 16 meters. 22

Although navigation locks along the Nile in Upper Egypt are 80 meters long and 16 meters wide (except the lock at Aswan), the Chamber has accepted proposed specifications of 80 by 12 meters for locks to be constructed for com­ pletion of the new Cairo-Alexandria waterway, in view of the narrowness of the canal. The Chamber has recommended locks of 55 by 12 meters for other navigation routes,

Ilhe Chamber has asked the Ministry of Public Works to undertake several restoration and improvement projects on existing canals, which the Chamber covsiders are urgently needed. It advocates repair of the Nile banks, the cleaning and dredging of certain canals, and the widening of canal bottoms. One justification offered for repair of the Nile banks is the present large loss of water. The Chamber advocates Government improvement of inland water­ way harbors a-id their operation as a public facility. Existing harbor facilities are owned indi ridually by navigation companies. The present harbors are con­ sidered very oli and poorly equipped. This situation makes it difficult for some barge opec'ators to carry on their business, and private ownership of harbors with its limitation on use of facilities is a barrier to their improve­ ment.

D. PIPELINES

Egypt now has one long-distance pipeline for transporting light products from Suez to Cairo. A fuel-oil pipeline is projected for this route.

1. Light Products Pipeline

The existing 8-inch-light pipeline transports gasoline and kerosene from Suez to Cairo for local consumption and for transhipment by motor truck and by rail tank cars to Upper Egypt and the Delta. Shipments through this pipeline totalled 213, 000 metric tons in the year ending June 30, 1952.

2. Projected Fuel- Oil Pipeline

The National Production Council has approved a proposed pipeline from Suez to Cairo for shipping mazout (heavy fuel oil). This pipeline would be from 12 to 16 inches in diameter. A daily capacity o- 45, 000 barrels (8000 U. S. tons) is planned, permitting delivery of 2, 920, 000 U. S. tons annually at full continuous operation. Mazout transported in Egypt by rail, water, and road totalled 2, 9!0, 000 metric or 2, 216, 000 U.S. tons in 1953, according to the Chamber of Inland Navigation. 1

1 Domestic output of mazout in 1952 was 1, 702, 000 tons. Imports of mazout, diesel, and solar oil were 593, 000 tons (not broken down by specific product in import statistics). 23

Officials of the Government of Egypt say this pipeline will reduce the cost of shipment of mazout from Suez to Cairo from about 100 pt. 1 per ton to 30 pt., a 10-percent reduction in the price of fuel oil delivered in and near Cairo.

The fuel-oil pipeline would terminate just outside of Cairo to the northeast. Branches into central Cairo and to leading consumers such as manufacturing plants are planned. Fuel oil would be transhipped by rail, truck, and barge to distributing points subsidiary to Cairo. This pipeline will effect a substantial economy in the use of railway tank cars. Their turn around time will be reduced from 7 (in 1953) to 5 days by transferring their loading from Suez to Cairo. This turn around time has already been reduced to 6.5 days, and 6 days is hoped for by the close of 1954. Tank cars will continue to be used for transporting mazout direct from Suez to points in the Delta. The current insufficiency of tank-car capacity to handle the mazout traffic will be eliminated, and with it the trucking of mazout from Suez under the policy of preferential loading of the railway cars.

1 1 piaster (pt.) = 1/100 LE, or $0.0287. 24

IV. EQUIPMENT FOR FREIGHT TRANSPORTATION

With minor exceptions, the equipment of the Egyptian State Railways is adequate to handle freight traffic expected in the next few years. The 17, 500 goods or freight wagons of the State Railways have a capacity of about 200, 000 tons. Privately owned trucks in use have more than doubled since 1945, partly through the acquisition of surplus military vehicles, and now number about 15, 000. The 1500 to 2000 trucks estimated to be employed i.n long-distance trucking have a capacity of about 10, 000 to 14, 000 tons Barges for use on inland waterways have a capacity of 130, 000 to 140, 000 tons, and are supple­ mented by freight-carrying sailing feluccas with an estimated capacity of about 200,000 tons.

On the railways large numbers of locomotives and the rolling stock are over-age, and a program has been projected for their replacement. Many war-surplus trucks will be wearing out in the near future. Some trucks would be released for conversion to other uses by the prqosed Suez-Cairo fuel-oil pipeline. The effective barge capacity will be increased by about 10 percent when the new Cairo-Alexandria waterway is opened. Barge capacity can be increased almost 50 percent by lengthening existing barges.

A. EGYPTIAN STATE RAILWAYS

The equipment of the Egyptian State Railways is approximately ade­ quate in total capacity for current traffic. About one-third of the locomotives and a larger fraction of passenger equipment are over-age. Considerable equipment has been acquired in the post-war period, and additional units are on order. An extensive program of future replacement has been projected.

1. Inventory of Equipment as of December 31, 1952

Equipment on hand at the close of 1953 included 711 steam and 54 diesel locomotives, 38 diesel powered passenger trains of 2 to 5 cars each, 34 self-propelled cars, 1430 passenger coaches and 17,471 freight-carrying cars including 1, 512 tank cars. Details of the equipment inventory, additional units on order, and units received and scrapped since March 1, 1945 follow (number of units), 25

Type of Equipment At December 31, 1953 Mar. 1, 1945 to Dec. 31, 1953 On Hand On Order Received Scrapped

All locomotives 765 20 222 131 Steam 711 20 163 131 Diesel 54 a 54 All passenger units 1,502 40 411 157 Diesel 38b 31 Diesel rail cars 11 Steam rail cars 23 Coaches 1,430 40 380 157 All freight units 17 ,4 7 1 c 466 4,221 501 Boxlow side, flat 15,959 336 3,960 459 8-wheel 36 d 1,865 119 4-wheel 3 0 0 e 2,095 340 Tank cars 1,512 130 261 42 8-wheel 50f 202 4 4- and 6-wheel 8 0 g 59 38 Source: Egyptian State Railways a Switchers 40; line haul 12. b 19 5-coach; 11 3-coach; 8 2-coach c As of December 31, 1952, a smaller reported number were 23% 8-wheel, 3% 6-wheel, and 74% 4-wheel. d 75 ton flat cars. e 200 10-ton box; 50 open low side; 50 brake vans. f 35 ton. g 10 ton.

2. Equipment Capacity

In the opinion of the Egyptian State Railways, the number of loco­ motives no., on hand and on order is sufficient for the present traffic and that anticipated within the next 10 years. Replacement of locomotives is proposed after 30 years of life, a schedule which calls for 24 new locomotives annually.

Because of the lag in replacement, 270 coaches are due for scrapping in the present fiscal year. It is proposed that these over-age coaches be re­ placed in 5 years at the rate of 54 coaches annually. In addition, immediate acquisition of 90 coaches is proposed to meet present requiremems. Further­ more, after the first yea-- acquisition of an additional six coaches is proposed to replace the coaches coining due for scrapping. The over-all program thus calls for 144 coaches the first year and 60 coaches annually for the following 4 years. In the subsequent 5 years annual replacement would drop to 30, on the basis of 40 years of service,

The 17, 471 freight or goods wagons now on hand are sufficient to handle the present freight traffic. On the basis of 40 years of service, a replacement of 350 wagons is projected annually. Tentative traffic forecasts indicate need for added capacity annually of 200 wagons of 10-ton capacity. 26

3. Age of Equipment

As of December 1952, 215 locomotives were more than 30 years old. These included 124 line haul locomotives and 82 of the 125 shunting engines on hand. An additional 217 locomotives were from 21 to 30 years old.

Types of locomotives in service include: steam locomotive with tractive effort (in pounds); passenger, 32, 800 and 19, 520; mixed traffic, 22, 460, and freight 32, 400; road diesel locomotives of 1600 horsepower; and diesel switching locomotives of 350 horsepower. In the 3 years ending with fiscal 1950-51, engine failures per day averaged 2.8, 3.3, and 2.2, respec­ tively.

As of December 1952, equipment on order or on hand and less than 20 years old included 427 locomotives, 690 coaches, 6878 freight wagons, and 322 tank cars.

B. ROAD TRANSPORT

Motor vehicles in use included the following privately owned (as of December 31, 1952) and government owned, excluding military (as of Decem­ ber 31, 1951):

Number of Number of Privately Owned Government Owned

Passenger automobiles 56, 448 2,5831 Taxis 11,451 3002 Trucks 14,839 1,758 Buses 4,705 182 Motorcycles 10,330 2,494

Total 97,773 7,317

Including pickups.

2 Ambulance cars.

No separate data are available on truck trailers which are included with trucks; about 300 are in use. 27

About 80 percent of the trucks are of approximately 5-ton capccity. Some truckers view this as the best size because of its greater flexibility use. Some big truckers operate of 10-, 12-, or 15-ton trucks, including former army diesels, and some tank trucks are as large in capacity. The equipment of the principal trucking companies is modern on the whole. Most trucks and buss-es are in local and short-haul service. About 1500 to 2000 trucks operate in common or contract carrier service in direct competition with the railways. The large trucking concerns, operating ten or more trucks, have a total of perhaps 500 in service. Independents with one or very few trucks operate perhaps 1000 or more. Trucks in use have grown rapidly, and by 1952 five times as many were in operation as in 1939 and almost three times as many as in 1945. Data on the growth of trucks in use are given in Section V as an indication of expan­ sion of truck traffic. War surpluses explain much of the rapid increase of privately owned trucks after 1945, Many are operated by independents who compete vigorously for business on a price basis, and who do not know all their costs. As these trucks become increasingly expensive to operate, they will probably go out of use; and, with a subsequent increase of rates reflecting the higher cost of new trucks, the growth of trucking seems likely to slacken. The building of the projected 16-inch pipeline from Suez to Cairo for heavy petroleum products would release a large number of trucks from the mazout-hauling traffic. Where it proves economical, truckers would probably convert these to flat-bed trucks for hauling dry commodities and general mer­ chandise.

There is no shortage of trucks in Egypt now in terms of total physical capacity. Licensed trucks declined from December 1951 to December 1952, and at least on,: large trucker suffered a substantial slump in traffic. In the face of increasing competition due to a decline in business, some trucking com­ panies have been acquiring larger trucks or dieselizing in order to lower their costs.

In general, semitrailers are limited in practicability in Egypt. Their use is restricted by narrow streets in villages and towns, and by sharp curves in roads.

C. INLAND WATER TRANSPORT

In 1952, the companies belonging to the Chamber of Interior Naviga­ tion had a fleet which included 470 self-propelled barges for freight traffic, with 28 a total capacity of about 130, 000 to 140, 000 tons, 1 and 29 self-propelled vessels for passenger traffic. The small nonmember barge operators have about a 15, 000-ton capacity. About 560 dumb barges and 287 tugs were in use in 1950. In that year , the Ministry of Communications reported that 6743 sailing boats and 3715 small sailing boats in use. The sailing feluccas are estimated to have a total capacity of 200, 000 tons.

A number of motor barges have been built recently, about 20 in the two-year period 1950-1951. The high price of steel and other materials in 1951 discouraged construction; the cost rose 85 percent or more from 1949. With the slump in traffic in 1952, new construction ceased. Since World War II, many barges have been converted from steam to diesel power.

According to the Chamber of Inland Navigation, barge capacity is more than sufficient for present traffic, which is below that of 1951. Since 1951, some barges have been idle. Effective barge capacity will be increased by up to 10 percent when the opening of the new Cairo-Alexandria waterway re­ duces transit time. Moreover, since the new waterway will permit operation of longer barges, the Chamber anticipates that the eventual need for more capacity will be met by lengthening existing barges.

The present barges with dimensions of 7 by 41 meters have a maxi­ mum freight capacity of 300 metric tons with a water draft of 1. 63 meters, and of 215 tons with a draft of 1.30 meters. The tonnage capacity of the barge fleet can be increased by about 50 percent by lengthening all 41 meter barges to 54 meters. The Chamber anticipates that a need for this added capacity will arise because of the demand for water transport in connection with the projected Helwan iron and steel works and the Aswan fertilizer plant.

1 Chamber members as of August 1946 owned a total barge capacity of 76,481 tons. 29

V. INTERNAL FREIGHT TRAFFIC

The Egyptian State Railways (E. S. R.) are the leading transport agency for domestic freight. Road transport is a large and increasingly for­ midable competitor; inland water transport occupies a much smaller position but has a large potential for growth. Freight hauled by the E. S.R. totalled 6.7 million tons in 1952-53. This tonnage included 2.0 million tons of freight for the account of the E. S. R. Motor truck freight traffic in competition with railways and barges is thought to be about 3 million tons annually. The volume of freight carried by barges on the inland waterways has been reported at 762, 000 tons in 1953. Traffic of the E. S. R. and barges is predominantly long-haul. High­ way freight transport, though predominantly short-haul, has recently invaded the long-haul field, especially for cotton, fuel oil, onions, perishables, and general merchandise imports.

A. EGYPTIAN STATE RAILWAYS

The tonnages of various commodities or classes of commodities carried by the E. S. R. in fiscal years 1951-52 and 1952-53 are presented in TABLE II. The average length of haul for each commodity is also shown.

1. Freight Traffic

The freight traffic of the Egyptian State Railways was distributed among commodity groups in fiscal year 1952-53 as follows:

Thousands Commodity Group of Percent of Metric Tons Total Traffic Freight for Egyptian State Railways 2032 30.3 Foodstuffs, raw and processed, except sugar cane 1470 21.9 Sugar cane 952 14.2 Fuels 568 8.5 Fertilizers 410 6.1 Capital goods: building materials, timber, iron, and machinery 563 8.4 British military transport 160 2.4 All other commodities 567 8.4 Total 1 6719 100.0 Components do not add precisely to totals because of roundings. 30

TABLE II

COMMODITIES HAULED BY EGYPTIAN STATE RAILWAYS: TONNAGES AND AVERAGE LENGTH OF HAUL, FISCAL YEARS 1951-52 AND 1952-53

Thousands of Average Haul, Metric Tons Hauled Kilometers Commodity 1951-52 1952-53 1951-52 1952-53

Foodstuffs Sugar cane 340 952 100 90 Cereals 698 623 283 265 Refined sugar 356 286 313 307 Cottonseed and products 165 193 222 197 Salt 87 114 313 268 Onions 99 109 359 526 Perishables 72 88 359 376 Rice 69 49 232 234 Tobacco and cigarettes 6 8 254 224

Fuels (except E. S.R. fuel) Petroleum products except gasoline 499 479 381 398 Coal 88 59 304 292 Gasoline and alcohol 37 30 307 329

Other Commodities Fertilizers 439 410 360 333 Building materials 530 3 9 8 a 249 249 Timber 96 92 259 283 Machinery and iron 73 73 262 262 Straw 49 40 288 283 Molasses 40 35 421 378 Ginned Cotton 29 26 351 351 Grease and lubricating oil 20 12 285 281 Textiles 12 8 268 299 Unginned cotton 3 1 202 182 a Includes the following (thousands of metric tons):

Domestic cement 147 Stone 20 Lime 10 Imported cement 33 Ballast and sand 58 Bricks 8 Gypsum and talc 48 Asphalt 21 Other materials 54 31

TABLE II (Continued)

Thousands of Average Haul, M etric Tons Hauled Kilometers Commodity 1951-52 1952-53 1951-52 1952-53

Unallocated

Freight for E. S. R. 2, 020 2,032 149 146 Miscellaneous 441 445 332 340 British Military Transport 96 160 82 91

All commodities 6, 364 6,719

All commodities excluding freight for E. S. R., British military transport and sugar cane 3,908 3,575

Source: Egyptian State Railways. Items do not necessarily add to precise totals because of roundingso 32

Products of Egyptian extractive, processing, and manufacturing in­ dustry are included in the tonnages of virtually every commodity of TABLE II. Aside from raw agricultural commodities, the chief products transported by rail are products of extractive and primary processing industries- -salt, mo­ lasses, sugar, cereals (including flour). petroleum products, fertilizers, and building materials. Products reflecting a higher degree of processing or fab­ rication, including textiles, cigarettes, and some components of miscellaneous, amount to only a small fraction of rail-freight traffic.

Raw and processed products of agriculture accounted for 36. 1 per­ cent of freight traffic of the Egyptian State Railways in 1952-53. Freight for account of the Egyptian State Railways--for company consumption now or in the future in producing freight and passenger transportation--was 30. 3 percent of all freight traffic. Other commodities--locally produced and imported products of extractive, processing, and fabr cating industries- -accounted for the remaining 33.6 percent.

2. Length of Haul

With few exceptions, traffic on the Egyptian State Railways moves 200 kilometers or farther. Length of haul has increased somewhat as highway transport has taken over many of the shorter hauls.

The shortest average hauls occur for British Military Transport and sugar cane--about 90 kilometers each. Freight hauls for the account of the E.S.R. average 126 kilometers. Cottonseed and products average 197 kilometers.

The average length of haul is between 200 and 300 kilometers for the following products in order of increasing length of haul: tobacco, rice, build­ ing materials, machinery and iron, cereals, salt, lubricants, coal, and textiles.

The average length of haul is between 300 and 400 kilometers in order of increasing length of haul for the following, refined sugar, gasoline and alcohol, fertilizers, miscellaneous commodities, ginned cotton, perishables, molasses, and petrolcrn products excluding gasoline. The average haul for onions is 526 kilometers, reflecting shipments for export from Upper Egypt growing areas.

3. Trends of Traffic

Freight traffic for the Egyptian State Railways just after the war approximated the immediate prewar level. By 1952-53, a rapid decline of 33

more than 25 percent below the traffic level of the 1948-49 fiscal year had oc­ curred. Traffic trends are measured by the following index numbers, com­ puted from traffic data supplied by the Egyptian State Railways (average 1935­ 36 to 1939-40 = 100):

Commodity 1948-49 1949-50 1950-51 1951-52 1952-53 All freightxx 96 90 80 71 65 All freight 98 88 80 74 78 Cereals 185 158 149 134 120 Petroleum products excluding gasoline 105 111 111 103 101 Fertilizers 98 63 75 91 85 Building materials 86 98 71 70 53 Refined sugar 75 87 84 84 67 Cottonseed and products 54 59 61 31 Salt 37 136 159 165 122 161 Onions 78 73 28 60 66 All other commodities 90 79 66 50 46 Sugar cane 141 117 85 53 147

xx Excluding Brikish Military Transport, freightforthe account of the E. S. R., and sugar cane.

B, ROAD TRANSPORPT

No data are ;,vailable on tonnages of the various commodities car­ ried by tru. ks, nor L, comparalive traffic by railways and watcrways, except for mazout (',e 1 oil) aw ) cotton It has been estimated that perhaps 3 to 4 mil­ lion tons of' ,_cj.noclit~c s are truck--hauled in competition with the railways; this e,:rrate, , lude , F,',ort h as often complementing railway or water move­ ments e: he s.me loaus Trucks in competition with railways include not only the 150u 'o 2000 in common and contract carrier service, but also fleets owned and operated for their own account by oil and other companies. As of 1950, 40 percent of the imports arrivinf at Alexandria and Port Said were believed to be hauled by truck to Cairo. - The portion hauled 1 Some idea of the division of traffic at Alexandria between rail and other forms of transport can be secured from import and freight loading data. Imports at Alexandria in the calendar year 1952 were 3,209,000 tons. Loadings of the Egyptian State Railways at El Barbary station, Alexandria, were 1, 178, 000 tons in the fiscal year 1952-53. The balance of imports in the fiscal 1952-53 was loaded into barges and trucks, except for the presumably small fraction of im­ ports consumed locally. 34

by truck fluctuaies, rising when large quantities of freight await shipment be­ cause of insufficient railway equipment. Cotton and other agricultural products move north to Cairo and the ports in large volumes by trucks, which carry a larger fraction of tonnages available when traffic is heavy and rail and water facilities are insufficient. Petroleum products move by road in large volumes from the Suez refineries.

1. Growth of Highway Trucking

Truck traffic has expanded to perhaps five times its 1939 level. Al­ though data on traffic do not exist, a fairly accurate idea of total truck traffic can be secured from the number of privately owned trucks in operation. There were 2,917 such trucks at the end of 1939, 15,559 at the end of 1951, but fewer in 1952. Trucks in operation as of December 31, in recent years, have been:

Number of Trucks

1939 2,917 1940 2,933 1941 3,539 1942 4,137 1943 4,073 1944 3,974 1945 5,209 1946 7,500 1947 8,859 1948 10,043 1949 11,757 1950 14,443 1951 15,559 1952 14,839

Source: Government of Egypt, Ministry of Finance and Economy.

According to the table, the number of trucks in operation has tripled since the end of 1945. Although only 2, 000 trucks are thought to be engaged as public carriers in long-haul freight transport in competition with the railways, other trucks are operated privately in both long- and short-haul service. Trucks in long-haul operation have probably increased more rapidly than the total num­ ber of trucks in use: a policy, in vogue until recently, permitted an increase in the number of trucks licensed for long hauls as well as for short hauls within one province or into the adjacent province. 35

2. Freight Hauled by Truck

An estimate of long-haul truck traffic can be based on the assumption of 2000 vehicles in long-haul operation. Most trucks operated as public carriers in inter-city service are of 5-ton capacity which may be taken as a fair approxi­ mation of the average capacity of such trucks. Accordingly the total freight capacity may be estimated at 10, 000 tons. If the average truck transports 150 full loads in one year, the total tonnage would be 1,500, 000. This estimate makes no allowance for trucks operated privately. This estimate of total tonnage is almost certainly too low for truck traffic in competition with the railways Between the fiscal year 1948-49 and the fiscal year 1952-53. freight hauled by the Egyptian State Railways, exclud­ ing freight for the account of the E. S R. and British Military Transports, de­ clined by 1, 660,000 tons. By 1952-53, such traffic of the E S R. had declined to 75 percent of its average level in the period 1935-36 to 1939-40. Doubtless some diversion of traffic from railways to highway had already developed by 1943-49

It seems reasonable to suppose, therefore, that truck traffic com­ petitive in long-haul traffic with railways and waterways has mounted to 3 to 4 million tons annually All traffic carried by highway must now be well over 5 million tons annually, and may be as high as 10 million. Most trucks are sub- stitutes for animal-powered transportation Since such trucks are engaged in short hauls, their turn around t.me should average somewhat less than that of the long haul trucks, although their average load is probably smaller.

3. Licensing of Long-haul Trucks

Early in World War 11, the Government liberalized the licensing of trucks as public carriers to permit them to operate throughout Egypt. The first step, by decision of the Transport Advisory Council on May 19, 1940, was licensing only for shipping perishables In January 1941, trucks licensed as public carriers in one or two zones only were permitted to operate nationally. On October 1, 1947, the issuance of permits for additional trucks to operate nationally was stopped. Some months later issuance of new permits for the carriage of perishables nationally was reinst tuted. A pruposal for caricella­ tion of all the temporary permits for national operation which had been granted on the basis of an Advisory Council decision of March 13, 1946, was postponed. A deadline for application to operate public carrier trucks on a national basis was repeatedly extended--finally to December 31, 1953. The Advisory Council on December 20, 1953, approved renewal of existing licenses for public carrier trucks for national operation for one year ending December 31, 1954. The 36

Council decided that such licenses for new vehicles were to be issued only in the case of replacement of depreciated vehicles. Further restrictions on issuance of licenses for national operation were held up, and the Egyptian State Railways were invited to present a report to the Council within 3 months on the capacity of the E. S. R. to handle freight now carried by road.

C. INLAND WATER TRANSPORTATION

Tonnages of principal products carried by barge on the inland water­ ways in recent years have been reported by the Chamber of Inland Navigation of the Egyptian Federation of Industries:

Thousands of Metric Tons Commodity 1950 1951 1952 1953

Cotton 70.3 56.2 68.1 59.9 Cottonseed 65.2 77.3 76.8 56.8 Stone, sand 110.4 109.2 58.2 139.6 Petroleum products 250.8 265.7 281.4 254.4 Nitrates 170.5 186.6 159.7 140.6 General cargo 175.5 195.5 160.4 110.7 Total 842.2 890.4 804.6 762.0

The data of the Chamber of Inland Navigation cover all the large barge operators and exclude only independent barge operators who are not members of the Chamber.

In addition, sailing feluccas carried perhaps 2 million tons of stone, sand and gravel, clay products, etc., and other bulky, durable, low-value com­ modities, which can bear little transport cost but much time, or which move only short distances.

The traffic of the barge operators is chiefly long-haul. Fertilizers and general cargo are carried from Alexandria to Cairo and Upper Egypt; cotton is carried from Upper Egypt to Alexandria; fuel oil (mazout) is carried from Suez to Cairo and other inland waterway ports. Snort-haul traffic is chiefly confined to occasiona' pecial contracts. Short hauls by water are chiefly left to the sailing feluccas.

According to the Chamber, the water carriers gained some traffic at the expense of the railways through rate cuts in 1952, but truck competition was intensified. Market transactions were delayed by the state of the cotton market, and the desire for speed in transport caused trucks to be favored in the latter part of the 1951-52 season. 37

The reduction of nitrate traffic was due to the large stocks at dis­ tribution points. Despite the arrival of large quantities at Alexandria, the decline of sales slowed the movement of nitrates inland.

The movement of mazout by water was affected in 1951 and 1952 by the interruption of traffic on the Ismailia canal following denunciation of the Anglo-Egyptian treaty. Traffic was resumed via Alexandria. Later, in 1952, with mazout stocks restored, a 20-percent decline in consumption was accom­ panied by a sudden fall in water shipment.

The transport by water of stone, sand, wood, iron, and other com­ modities reflected the decline in construction and in other economic activity.

The Government shipped wheat from Alexandria by rail in 1952, despite the fact that the water rates were only half as high and notwithstanding existing contracts with Nile transporters. Exceptionally low water in the fall of 1952 reduced traffic in Upper Egypt. 38

VI. COST OF TRANSPORTATION TO THE SHIPPER

Costs experienced by the shipper in transporting commodities via the Egyptian State Railways average about 4. 1 m/ms 1 per metric ton-kilometer (1.7 cents per U.S. ton-mile). Most staple agricultural products and other bulk commodities such as fertilizers and fuels average between 2.64 m/ms (1.1 cents) and 4.14 m/ms (1.7 cents). Manufactures move at higher rates, close to the level for miscellaneous commodities; these average 8.95 m/ms (3.8 cents) in revenue to the railways.

Truck rates on commodities moving by truck over intermediate and long distances average in the neighborhood of 10 m/ms (4.2 cents). Truckers find they can compete with the railways for the traffic in some commodities, even over longer distances, at rates below 10 m/ms. Truck rates are higher for short hauls, for light commodities, and for hauls where return loads are small.

Freight rates for barge shipments between Alexandria and Cairo range above and below 3.5 m/ms (1.5 cents) on bulk commodity movements. The numerous obstacles to navigation on this route, by far the most important in Egypt, go far to explain why the rates are so high. In contrast, rates for barge hauls on the upper Nile are relatively low; some commodities can be shipped for less than 1 m/m per metric ton-kilometer (0.4 cents per U.S. ton-mile).

Experienced freight rates in Egypt are at least as high by rail as in the United States and are higher on intercity hauls by truck and by water. However, due to Important differences in the volume of traffic and the length of haul as well as in other conditions influencing transport costs and rate levels, comparisons with shipping costs per ton-mile in the United States are of little significance. Certainly the cost of transport relative to the Egyptian wage rates and typical incomes is very high2 .

A. FREIGHT RATES OF EGYPTIAN STATE RAILWAYS

TABLE III presents E. S.R. receipts in milliemes per metric ton­ kilometer in 1951-52 and 1952-53, and in cents per U.S. ton-mile in the fiscal year 1952-53, for each of 25 classes of commodities.

1 10 milliemes (m/ms) = 1 piaster (pt.).

2 It is correspondingly imperative that economies in transport cost and rates be sought. These would contribute broadly to increasing agricultural and in­ dustrial opportunities and to raising the real level of personal earnings through lower delivered prices of commodities. 39

TABLE III

COMMODITIES HAULED BY EGYPTIAN STATE RAILWAYS: FREIGHT REVENUE PER TON-KILOMETER AND PER TON-MILE, AND TONNAGE TRANSPORTED, FISCAL YEARS 1951-52 AND 1952-53

Thousands of Revenue per Metric Revenue per Metric Tons Ton Hauled 1 kilo- U. S.a Ton­ Hauled, meter (Milliemes) Mile, Commodity 1952-53 1951-52 1952-53 1952-53

Foodstuffs Sugar cane 952.4 1.84 2.02 0.85 Cereals 623. 1 3.92 3.64 1.53 Refined sugar 286.2 2.77 3.36 1.41 Cottonseed and products 192.7 3.67 3.90 1.63 Salt 113.6 2.77 3.37 1.41 Onions 108.9 2.44 2.65 1.11 Perishables 87.8 5.45 5.32 2.23 Rice 49.31 3.43 4.16 1.74 Tobacco and cigarettes 7.52 26.95 30.07 12.85

Fuels (except E.S.R. fuel) Petroleum products except gasoline 479.2 3.59 3.70 1.55 Coal 58.7 3.37 2.82 1.18 Gasoline and alcohol 30.17 8.30 10.56 4.43

Other Commodities

Fertilizers 409.7 3.21 3.06 1.28 Construction materials 398. 0 2.33 3.01 1.26 Timber 91.6 5.21 4.48 1.88 Machinery and iron 76.7 8.35 8.17 3.43 Straw 39.6 4.14 4.30 1.80 Molasses 35.32 1.46 2.67 1.12 Ginned cotton 25.61 8.76 5.27 2.21 Grease and lubricating oil 11.78 7.61 7.81 :3.27 Textiles 7.51 12.56 15.71 13.58 Unginned cotton 0.869 8.47 9.99 4.18 a. 10 m/m per metric ton-kilometer= U.S. dollars 0.0419 per U.S. ton-mile. 40

TABLE III (Continued)

Thousands of Revenue per Metric Revenue per Metric Tons Ton Hauled 1 kilo- U.S. Ton- Hauled, meter (Milliemes) Mile, Commodity 1952-53 1951-52 1952-53 1952-53

Unallocated

Freight for E. S.R. 2032.3 2 . 5 0 b 2 . 5 0 b 1.05 Miscellaneous 444.5 8.54 8.95 3.75 British Military Transports 159.8 8.09 20.83 8.73

Source: Tonnage and ton-kilometer revenues from Egyptian State Railways. b Arbitrary rate, constant per ton-kilometer regardless of distance. 41

In 1952-53, the principal agricultural raw materials ranged, in average cost per metric ton-kilometer to the shipper, from 2.02 m/ms (0.85 cents per ton-mile) for sugar cane to 5.32 m/ms (2.32 cents) for per­ ishables. Most staples ranged between the 1o 11 cents per ton-mile for onions and the 1.74 cents per ton-mile for rice.

Fuels are chiefly represented by mazout and other oils. As a group, these moved in 1952-53 by E.S.R. at an average of 3.7 mrn/ms per ton-kilometer (1. 55 cents per ton-mile).

Other raw commodities or bulk manufactured goods move at levels from 1 to 2 cents per ton-mile. In m/ms per metric ton-kilometer, or cents per U.S. ton-mile, average cost to shippers for certain of these commodities of interest to industry was molasses, 2.7 m/ms (1.12 cents); building ma­ terials 3.0 m/ms (1 26 cents), fertilizers, 3.1 m/ms (1.28 cents); straw, 4.3 m/ms (1.80 cents), timber, 4 5 m/ms (1.88 cents); ginned cotton, 5.3 m/ms (2.21 cents), grease and lubricating oil, 7 8 m/ms (3.27 cents); machinery and iron, 8 2 m/ms (3. 43 cents), miscellaneous 9. 0 m/ms (3. 75 cents).

Aside from fuels, fertilizers, molasses, machinery, and iron, and the unstated contents of miscellaneous commodities, manufactured products are unimportant in tonnages handled via the E. S. R.

Most other manufactured products would fall in the miscellaneous category, and ton rates per unit distance may usually be close to the aver­ ages--9.0 m/ms or 3 75 cents

The Egyptian State Railways average freight rates for traffic actually moving via E. S. R. are close to the level in the United States, where all railroad freight receipts per ton-mile average 1. 5 cents.

B. MOTOR TRUCK RATES

A representative figure for the cost of shipping in the trucks of responsible operators if 10 m/ms per metric ton-kilometer, or 4.2 cents per U.S. ton-mile, This figure approximates actual rates for shipping heavy commodities over distances of 100 to 300 kilometers, where return loads help cover the cost.

Rates tend to be higher for shorter distance hauls of lighter com­ modities, and for hauls with little or no return load or with relatively long turn-around time. Long hauls with full loads and with return loads permit lower rates. 42

Both agriculture and industry are directly concerned with the cost of shipping raw and primary processed materials. Industry is also inter­ ested in the cost of shipping its products, an important component of total distribution cost. For many industries, raw material assembly costs tend to outweigh in importance the cost of distribu:ing a final product of less weight. Heavy raw materials in general move only short distances by truck if rail or water transportation are available. They may not be economical to exploit at all because of high transportation cost if long land hauls are required. Finished products which have less weight per unit than the raw materials required for their production tend to be shipped longer distances. Longer hauls also characterize finished products, and perhaps raw mate­ rials as well, where markets limit production to one or a very few plants.

Rates of several leading truck operators indicate the approximate cost of shipping by truck. TABLE IV presents rates for a number of im­ portant hauls.

On the basis of TABLE IV, raw materials and primary industrial products appear to move over short distances (less than 100 kilometers) at rates between 9 and 20 m/ms per metric ton-kilometer (3.8 and 8.4 cents per U.S. ton-mile). For intermediate and long distances, the range may be estimated at 7 to 14 m/ms (2.9 to 5.8 cents).

For relatively lightweight commodities, such as some industrial products, rates are higher. Over short hauls, the range of shipping cost is approximately 10 to 30 m/ms (4.2 to 12.5 cents). Over intermediate and long hauls, the range is approximately 10 to 22 m/ms (4.2 to 9.2 cents).

On long hauls, truckers find the rates of the Egyptian State Rail­ ways acceptable for some commodities. But truckers get certain shipments, notwithstanding higher rates, because of availability, speed of service, or absence of rehandling cost involved in transferring loads from one carrier to another.

Independent estimates of trucking costs for commodities of varying weight and hauls of various length can be worked out once truck operating costs are known. The recent cost experience of one truck operator in Egypt is presented in TABLE V.

The reporter's total cost of operating trucks of about a 3-ton capacity in intermediate haul service--trips of about 100 kilometers--was 34 m/ms per kilometer in 1951, and 39 m/ms in 1952. These costs are 16 and 18 cents per mile, respectively. The higher cost in 1952 is traceable largely to peculiarities of allocated overhead. 43

TABLE IV

FREIGHT RATES FOR VARIOUS HAULS AND COMMODITIES REPORTED BY ROAD HAULAGE FIRMS

Distance, Rate per Rate per Ton Hauled Origin and Kilometers Metric Ton, 1 Kilometer 1 Mile a Destination via E. S. R. Commodity L. E. (m/ms) (Cents)

Chiefly short hauls Soft drinks 12.0 5.0 Short hauls 50 Cement 1.00-1.50 20-30 8.4-12.5 Cairo-Tanta 86 Diverse 0.77 9 .0 0b 3.8 Mehalla-Cairo 114 Textile 1.20 c 10.5 4.4 Cairo-Suez 141 1 .2 0 d 8.5 3.6 Cairo-Suez 141 Light 2.00-2.50 14.2-17.7 5.9-7.4 Cairo-Suez 141 1.80-2.00 12.8-14.2 5.3-5.9 Suez-Cairo 141 0.90-1.10 6.4-7.8 2.7-3.3 Alex Cairo 208 2.00-2.50 9.6-12.0 4.0-5.0 Cairo-Alex. 208 1.50-2.00 7.2-9.6 3.0-4.0 Cairo-Alex. 208 Diverse 2.29 ii.0 b 4.6 Cairo-Alex 208 Machinery 2.00e 9 6 4.0 Cairo-Port Said 233 1.80-2.00 7.7-8.6 3.2-3.6 Cairo-Port Said 233 Light Up to 5.00 Up to 21.5 Up to 9.0 Cairo-Port Said 233 Cement 2.00 8.6 3.6 Port Said-Cairo 233 1.50-1.80 6.4-7.7 2.7-3.2 Distances tnder 350 Packed 1 products 9.0 b 3.8 Distances Over 350 Packed f products E. S. R. Ratesb Beni Suef-Alex. 319 Cotton, baled 2.22-2.68 7.0-8.4 2.9-3.5 Maghagha-Alex. 375 Onions 3.75 10.0 4.2 Cairo-Luxor 671 Heavy 5.00 7.45 3.1 Cairo-Luxor 671 Light 7.00 10.5 4.4

a U.S. or short ton, 907 kilograms, hauled 1 mile. b Contract with oil company. c LE 1.00 for regular business. d With return shipment e Plus LE 1. 00 per ton for mechanical handling. f Lubricating oils and other packed petrol,'um products; rates from a shipper. Source: Except packed products, intervie isa' Cairo offices of three of the largest '- -* road haulage concerns in Egypt. 44

TABLE V

COST OF OPERATION OF SOCONY--VACUUM TANK TRUCKS IN LONG-DISTANCE HAULAGE, BY TYPE OF COST, 1951 AND 1952

Milliemes per Kilometer Small Trucksa Large Trucksb 7 Chevrolets 5 Chevrolets 4 Chevrolets e Type of Cost 1 95 1c 1952d 1951

Fixed Costs

Depreciation 1.58 1.61 4.63 Taxes 1.62 1.58 3.31 Insurance 0.15 0.18 0.21

Variable Costs

Fuel 7.14 7.67 10.00 Lubricating oil 0.50 0.41 0.61 Drivers 7.55 8.33 9.45 Repairs and maintenance 9.80 14.77 13.32 Miscellaneous expense 2.90 2.18 3.05 Tires and tubes 3.05 2.42 5.10

Total Cost f 34.29 39.15 49.68

Source: "Socony--Vacuum Oil Company of Egypt a Capacity 1100 or 1200 gallons; 1100 gallons is a load of 3.1 U.S. tons. b Capacity 2000 gallons, a load of 5.65 U.S. tons. c 70, 640 kilometers (43, 900 miles) annually per truck. d 65, 800 kilometers (40, 820 miles) annually per truck. e 49, 040 kilometers (30, 500 miles) annually per truck. f 10 milliemes per kilometer equals 4. 618 cents per mile, based on U. S. dollars 2.87 to 1 Egyptian pound. Corresponding unit costs are 15.8, 18.1, and 23.9 cents per mile, respectively. 45

For larger trucks with a capacity of almost 6 tons, total cost per kilometer in 1951 was 50 m/ms, or 28 cents per mile. At the annual mileage of 30, 500 experimented by the reporter, operation of the 6-ton truck with an average load of 3 tons would give a cost per Lon--kilometer of almost 17 m/ms (7.1 cents per U.S. ton-mile). Costs per ton-kilometer can be calculated from the data of TABLE V for various assumed annual mileages and average loads.

Costs would be somewhat lower for the ordinary for-hire trucker. Overhead would be less for repairs and maintenance, wage rates would be lower, and the average load would often be larger.

C. RATES FOR INLAND WATER TRANSPORT BY BARGE

The cost of shipping certain bulk commodities by barge on the Upper Nile north toward Cairo is less than 1 m/m per ton-kilometer (0.4 cents per ton-mile). A representative figure for barge shipments from Alexandria to Cairo is 3.5 m/ms (1.5 cents), but particular rates vary considerably. Rates for hauls between Upper Nile points and Lower Egypt reflect low-cost opera­ tion on the Upper Nile and the present high cost on the canals.

Certain rates for barge hauls of representative commodities over impoitant routes are presented in TABLE VI. The following rates are especially significant

(1) On the important Cairo-Alexandria haul, metric ton-kilometer (U S ton-mile) rates are 2.43 m/ms (1 02 cents) for cement, 3.88 m/ms (1.63 cents) for wheat and 4.86 rn/ms (2.04 cents) for iron and general cargo,

(2) On the prospectively important haul from Aswan to Cairo, potter's earth now moves at 0.73 m/ms (0.31 cents), a relatively low rate level. 1

(3) On an important long haul, from Minia--cotton center of Upper Egypt--to Alexandria, cottonseed moves at 1.55 m/ms (0 65 cents).

1 A phosphate shipper reports a similar level for phosphate by water from Edfu on the Upper Nile 990 kilometers to Kafr el Zaiyat, just over half-way from Cairo to Alexandria: 0.86 m/ms per metric ton-kilometer (0.36 cents per U.S. ton-mile). 46

TABLE VI

CERTAIN RATES FOR INLAND WATER TRANSPORT, 1952

Rate, LE Rate per Ton per Origin and per Ton Kilometer Mile Destination Kilometers Commodity (Metric) (Milliemes) (Cents)a

Suez-Cairo 145 Mazout 1.00 6.89 2.89 Khatatba- Sand and Alexandria 145 Gravel 0.50 3.45 1.45 Cairo-Ismailia 158 Cement 1.00 6.33 2.65 Alexandria-Cairo 206 Cement 0.50 2.43 1.02 206 Wheat 0.80 3.88 1.63 206 Iron 1.00 4.86 2.04 206 General cargo 1.00 4.86 2.04 Abu Zaabal- Alexandria 228 Rock 0.60 2.63 1.10 Minieh-Alexandria 452 Cottonseed 0.70 1.55 0.65 452 Cotton Aswan-Cairo 878 Potter's earth 0.64 0.729 0.306 Aswan- Alexandria 1084 Potter's earth 1.00 0.922 0.386

Source: Ton-kilometer and ton-mile data computed from rates supplied by the Egyptian Federation of Industries

Distances are via the Egyptian State Railways--the shortest route. a 10 m/ms per metric ton hauled 1 kilometer = U.S. $0. 0418 per U.S. (short) ton hauled 1 mile. 47

Despite the relatively low rates, especially as compared with rail rates on industrial products other than bulk commodities, little freight other than fertilizer, mazout, wheat, and cotton moves by barge. Transit times are very lengthy; 9 to 15 days are required from Alexandria to Cairo, and I month from Alexandria to Upper Egypt.

Much building material--rock, sand, gravel--is transported by sailing feluccas, usually on short hauls, at rates the barge operators cannot meet. Barges chiefly serve long-haul traffic--Cairo to Alexandria and hauls of greater length. 48

VII. TRANSPORT ORGANIZATION AND FINANCIAL RESULTS

Transportation within Egypt is supplied both by governmental and by private agencies. The Egyptian State Railways are owned and operated by the Government, but motor trucking and inland navigation are under private ownership and operation.

The number of trucks in long-haul service has been controlled by the Government, although during and after World War II specific restrictions have been lifted. New limitations may be imposed to reduce or eliminate long-haul trucking.

Transport rates are not regulated by the Government, except inso­ far as the review of railway rates by a government board may be considered regulation. Motor trucks and large operators are free to set their own rates. Rates have gone down since 1951 as competition has intensified for a some­ what declining total traffic

Financially, the operation of the Egyptian State Railway has resulted in deficits mounting to more than LE 3 million in the fiscal year ended June 30, 1953. In 1952 and 1953, truckers and barge operators suffered a large decline in profits, and, according to industry sources, even losses.

Transport by motor vehicles as a whole pays in up to LE 9 million annually to the Government Treasury in various taxes, directly and indirectly. Inland navigation pays in about L E 200, 000.

A. ORGANIZATION AND CONTROL

1. Egyptian State Railways

The Egyptian State Railways are government owned; a Board of Directors is the top governing authority responsible directly to the Cabinet. The Board includes the Ministers of Communications, Finance, Commerce and Industry, Public Works, and War; the Undersecretaries of State for Communications and for Finance; and the General Manager and the Legal Advisor of the Egyptian State Railways.

The staff of the Egyptian State Railways in early 1954 include the following salaried employees and daily paid wage earners, by department. 49

Number of Workers Department Salaried Daily Paid

General Management 4,482 669 Engineering 1,628 7,527 Mechanical 5,064 11,362 Traffic and goods 6,002 4,883 Total 17, 176 24,441

In the past, the budget of the Egyptian State Railways has simply been a part of the general budget of the Government of Egypt. Receipts were turned in to the Government Treasury, and funds for the various needs and purposes of the Egyptian State Railways vrere allocated in the general budget. Recently, the decision was made to give the Egyptian State Railways fiscal autonomy.

2. Motor Trucks

Motor freight transportation is privately owned and operated. The number of motor trucks icensed for operation throughout Egypt and therefore usable for long hauls such as from Alexandria to Cairo and beyond has been controlled under policies laid down by the Transport Advisory Council. No legislation as yet provides for regulation of motor truck rates.

The la-"s and regulations relating to transport by road are enforced by the Transport Administration of the Ministry of Communications This office must approve all permits to operate vehicles before they can be issued by the Regulations and Permits Office of the Ministry of the Interior.

Under the latest decisions of the Couicil, a policy of issuing new licenses for additional trucks for operaton as public carriers throughout Egypt that had been in vogue during the war and again since 1950 was re­ placed by a more restrictive policy prescribed by a Council decision of December 20, 1953.

The new policy approved the renewal for 1 year ending December 31, 1954, of outstanding licenses for the operation of public carrier trucks through­ out Egypt. The extension was limited to 1 year, subject to the condition that the Egyptian State Railways report to the Council within 3 months on the capacity of the Egyptian State Railways to handle the freight now moving by the trucks in question 50

3. Inland Water Transport

Barge operations in inland navigation are conducted by 5 limited liability companies and 20 other firms. The companies and 15 of the firms are members of the Chamber of Inland Navigation.

Until recently the control of inland navigation was administered by the Inland Navigation Department of the Transport Administration, Ministry of Communications. This control has been transferred to the Ministry of Public Works, which already had responsibility for waterways and canal locks through its Irrigation Department. The regulation of rates has been provided for by law, but the authority has never been used,

Following a recommendation of October 15, 1953, by the Committee on Roads and Bridges of the National Production Council, a special Committee on Inland Navigation has been set up within ihe Council. The purpose of this Committee is to centralize the handling of waterway affairs, study and suggest priorities for waterway improvement prujecLs, determine long term waterway policy, and organize the administration of inland navigation.

1 Early in 1954, The Permanent Committee for International Navigation made certain decisions recorded in a mpmorandum dated February 13, 1954.

Decision 1. As much as possible navigational channels should be constructed with a vertical depth of 150 cms. The Ministry of Public Works should study the projects relating to this decision and 'nformthe Committee of its conclusions,

Decision 2. Wharves for loading and inloading should be constructed. A sub­ committee should be formed, composed of delegates of the Ministries of Com­ merce and Industry, Public Works, and Municipal and Rural Affairs, as well as from the Chamber of ]nland Navigation. The subcommittee should consider wharf projects and inform the Committee of the recommendations for !heir execution. Decision 3. The opening of bridges and canal locks should be coordinated in a time table. A subcommittee composed of delegates of the Department of Civil Engineering, the Department of Railways, the Ministry of Public Works, the Ministry of Supplies, and the Chamber of Inland Navigation should be formed for carrying out this coordination and informing the committee of the decisions made. Decision 4. A waterway police force for organizing traffic in the inlaid water­ way should be established. A subcommittee should be formed for drawing up the police project. The subcommittee should be constituted from delegates of The Ministries of Interior, Commerce and Industry, Municipal and Rural Affairs, and Public Works, and the Chamber of Inland Navigation. The project should be submitted to the Committee. Decision 5. The Chamber of Inland Navigation should be requested to submit its recommended projects for navigational expansion. The delegate of the Chamber present at the committee agreed to submit its recommendations before the next meeting. 51

In 1954 the Special Committee completed a comprehensive report on inland navigation, following a number of reports on particular aspects written both before and after its formation.

B, FINANCIAL RESULTS

All three types of transportation have recently suffered severe de­ clines in their financial results from operations. The deficit of the Egyptian State Railways has mounted to more than LE 3 million, and profits of truck and barge operators have undergone an extreme decline.

1. Egyptian State Railways

Receipts and net income of the Egyptian State Railways in recent years have been: In Thousands of LE Fiscal Year, Ended June 30 Totala Freight Passenger Net Income 1950-51 12,749 5,208 7,119 - 942 1951-52 14,005 5,551 8,046 -2,681 1952-53 13,845 5,402 8,071 -3,687 a Exceeds sum of freight and passenger receipts due to inclusion of miscel­ laneous receipts. b Before deducting LE 1, 189, 000 of wages paid to Canal Zone laborers placed on Egyptian State Railways payrolls after leaving the employ of the British Army. Source: Egyptian State Railways

The expenses of the Egyptian State Railways were distributed as follows in the fiscal year 1952-53: In Thousands ofL. Mechanical Department (including train-operating expenses 7,146 Engineering Department (maintenance and depre­ ciation of way and structures) 2,141 Rolling Stock Maintenance and Depreciation 1, 990 Traffic 1,587 General Management 502 Miscellaneous 736 War Increment for Salaries 3,530 Wages of Canal Zone workers formerly employed by British Army 1,189 Total Expenses 18,721

Source: Egyptian State Railways 52

2. Motor Trucks and All Road Transportation

Receipts ot truckers competing in intermediate and long-haul traffic with the railways and waterways are now, at a very rough estimate, about LE 3 million annually. No data on receipts or earnings are available, but traffic, rates, and profits are known to have declined since 1951. One of the large trucking firms suffered almost a 90-percent decline in net in-' come.

Government receipts received directly or indirectly from all road users have been as high as LE 8 or 9 million, distributed as follows in two recent years (fiscal years ended February 28):

In Thousands of LE Tax 1949-50 1950-51

License plates, fees and charges 1,486 1,788 Taxes on motor fuels 4,676 4,873

Customs Duties

Vehicles and spare parts 1,895 2, 007 Tires 257 567 All Taxes 8,314 9,235

The large revenues on motor fuels reflect the pricing of petroletm products to realize, chiefly on gasoline, enough surplus to finance the sub­ sidy on kerosene. The determination of the budget of the Department of Roads and Bridges is unrelated to tax revenues from motor vehicle owners and use.

3. Inland Barge Navigation

The average revenue received in 1953 per ton carried by barge on inland waterways was about 50 piasters. Accordingly the revenues of barge operators are about LE 400, 000 annually. Revenues have declined well over 10 percent from their 1950 level because of lower rates and decreased traffic. Profits have virtually disappeared, in part because of relatively stable labor cost in the face of the lessened revenues. The profits of two large companies with a total capital of LE 255, 000 were LE 22, 561 in 1951, but only LE 780 in 1952. Results were even poorer in 1953. The decline in both rates and traffic have been explained partly in terms of increased com­ petition and rate cuts in the struggle for a declining volume of traffic. 53

Government receipts from inland navigation have recently been about LE 190, 000 annually. For the fiscal year 1951-1952 and 1952-1953 (fiscal year ended June 30) these receipts have been classified as:

Thousands of LE 1951-52 1952-53

Water transportation fees 38,345 32,000 Licenses on steamboats 7,367 6,000 Fees for use of Nile port facilities owned by Ministry of Commerce 142,091 151,000 Total 187,803 189,000 54

VIII. PLANNED AND PROPOSED OUTLAYS FOR TRANSPORTATION IMPROVEMENT

Definitely planned outlays for transportation improvement are in­ cluded 1i government budgets for the fiscal year 1953-54. The budgetary allotments for improvements, including renewals and replacements total I E 9,107,000 of which LE 5,860,000 is for railways and a pipeline, and LE 3,247.000 is for roads Appropriations for improvements of benefits to inland navigation are not separately available since any such benefits will be simply by-products. of irrigation improvements now provided for.

Appropriations for transportation works appear partly in the national production development budget of the Permanent Council for the Development of National Production, and partly in the regular budget category of new works.

Proposals for future outlays include:

(1) For the Egyptian State Railways: LE 22,680,000 for replace­ ment of railway equipment over a ten-year period, LE 20,000,000 for track renewals in the same interval, and LE 9,000,000 for line extensions.

(2) For roads: The National Production Council has approved further outlays of LE 3,000,000 to complete the two-year road program and contracting for additional projects amounting to LE 3,000,000. Much of the initial LE 6,000,000 of projects are already under contract. The entire long-range program contemplated for roads has been estimated to cost LE 30,000,000, but may prove to be as high as LE 45,000,000.

(3) For waterways: Beyond LE 900,000 authorized by the National Production Council for the New Cairo-Alexaadr:a Waterway, no definite plans have yet been laid or tentative projects mapped out by Government agencies, although a list of proposed projects for improve­ ment of inland navigation has been submitted to the National Production Council.

A. RAILWAYS, PIPELINES

Appropriations have been designated in the two budgets for the Egyptian State Railways for a total amount of LE 5,860,000 for the fiscal year 1953-54. The object of expenditure and appropriate amounts are: 55

National Production Development Budget LE

Electrification of Cairo-Helwan suburban line 1, 860,000 Additional renewals for railways 500,000 Suez-Cairo fuel-oil pipeline 1, 000,000 Total 3,360,000

Egyptian State Railways Budget

Replacement program 1,119,500 Regular renewals 57,000 Continuation of projects under const ruction 950,800 New construction projects 167,000 Miscellaneous 205,700 Total 2,500,000

Total allocations for railway capital expenditures 5,860,000

Source: Translation of Law No. 366 of 1953; Ministry of Finance, Budget for Fiscal Year 1953-54.

For completion of the Cairo-Helwan line electrification, a further outlay of LE 1,820, 000 is anticipated, according to the latest budget publica­ tion of the Government of Egypt. For completion of the program of additional renewals for railways, this publication offers a figure of LE 11,750,000. According to this budget source, the total outlays for new works of the Egypt­ ian State Railway for the five fiscal years before the fiscal year 1953-54 was LE 13,973, 000.

The Egyptian State Railways have worked out a proposed program of expenditures for catching up on deferred renewals (with minor expansion of equipment capacity. The proposal calls for the following outlays by object of expenditure. Thousands of LE Annually 1958 to Total Object of Expenditure 1954 1955 1956 1957 1963 1954 - 1963 Locomotives 840 840 840 840 840 8,400 Passenger equipment 1,920 960 960 960 480 7,680 Freight rolling stock 660 660 660 660 660 6,600 Road: rail and tie renewals 2,000 2,000 2,000 2,000 2,000 20,000 All equipment and road 5,420 4,460 4,460 4,460 3,980 42,680

Source: Memorandum of the Egyptian State Railways. 56

In addition to this proposed program of replacements and renewals, the Egyptian State Railways propose further improvement and extension projects for an estimated total cost of LE 9,000,000:

Thousands of LE

Route extensions 6, 0 0 0 a Suburban line improvements 1,800 Replacement of bridges 600 Second or third track in existing lines 600 Total 9,000

a Includes Mutabis-Bilqas, Tewfikiah-Mellaha, and Helwan-El Saff projects (see Section III).

The proposed ten-year program of replacements and renewals would involve an estimated outlay of LE 22, 680, 000 for equipment and LE 20, 000, 000 for track renewals. The over-all total expenditures that have been suggested for the Egyptian State Railways including the further proposals for extensions and improvements and the estimated cost of completion of the Cairo-Helwan electrification, is LE 51,680,000.

B. ROADS

The National Production Council has approved the initial two-year program drawn up by the Department of Roads and Bridges of the Ministry of Communications. The cost of this program will be about LE 6,000,000. Sub­ sequent to the enactment of the national production development budget for fiscal year 1953-54 which allocated LE 647,000 for road improvement, the Council increased the allocation to LE 3,000,000 to provide funds for the first half of the two-year program.

Most of the approved LE 6,000,000 has been obligated under con­ struction contracts let by the Department of Roads and Bridges as of April 1, 1954. Recently the Department has been authorized by the Council to obligate an additional LE 3,000,000, or a total of LE 9,000,000, within the two years. Obligation of the additional LE 3,000,000 will make possible actual construction in the amount of LE 6,000 000 in this period.

Details of the projects provided for in the initial two-year program are presented in the second highway report by Arthur D. LitLle, Inc., dated May 30, 1954. The program consists wholly of new construction, excluding 57

maintenance, and will add approximately 500 kilometers of paved road surface. Four-fifths of the newly paved roads will be in the Delta, and the other fifth in Upper Egypt. In addition, some earth roads will be made ready for paving through widening or through strengthening road foundations. The initial two-year program of the Department of Roads and Bridges is in the first phase of a projected ten-year plan This program, recently estimated to cost LE 30,000 000 in the opinion of road officials may ultimately cost as much as LE 45 000,000 Completion of the ten-year program would put the average farm approximately 5 kilometers from a paved road The maximum distance from a paved road to the most remote farm would be about 15 kilo­ meters (Transport at present on foot along dirt roads or tracks proceeds at about ? kilometers per hour. )

When paved roads typically reach much closer to growing areas, the fell;h w:ll be able to make his trip to market in a shorter time. He will then have more time at the market, or will ultimately be able to make a one­ day round trip to larger, better market centers, thus opening up possibilities of securng higher prices for his produce and lower prices for goods he buys.

C. WATERWAYS

Early in 1954 the National Production Council took the first step in defining a concrete program for waterway improvement and development by setting aside a fund of LE 900 000 for completion of the new Calro-Alexandria waterway, All or most of this sum will be spent after the fiscal year 1953-54. Large aiocat:ons navt been designated by the Council for Irrigation and drain­ age, benefits from thcse may accrue to inland navigation

The Nationai Production Council through its new subcommittee for the amproirement of iniand navigation is deve]oping a program of works. The Chamber of Inland Navigation of the Egyptian Federation of Industries has made certain recommendations for waterway improvement with an indi­ cation of priorities. Certain proposals for improving or extending inland navigation have been presented in Section Ill Cost estimates for the various proposals have not y,' bten prcpared

Some of the improvements needed in inland navigation can be exe­ cuted with a small outlay and without time-consuming preparation of engi­ neering plans and major construction work. Examples are improved manage­ ment of inland navigation, especially the opening of locks and bridges, the control of traffic, increased maintenance work such as dredging, and the improvement of canal banks.