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Data Collection Survey on Trade and Logistics in Jordan, Palestine and Region

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Hashemite Kingdom of Jordan Data Collection Survey on Trade and Logistics in Jordan, Palestine and Region Final Report May 2018 JAPAN INTERNATIONAL COOPERATION AGENCY PADECO Co., Ltd. Data Collection Survey on Trade and Logistics in Jordan, Palestine and Region Final Report (Executive Summary) Executive Summary The overall objective of the survey was to propose assistance plans to facilitate regional logistics to contribute to the peace and stability of the region by promoting the economic development of Jordan and Palestine through realization of the Corridor for Peace and Prosperity. Specific objectives included: • assessing changes in regional logistics resulting from the civil wars in Syria and Iraq, and the current situation and issues related to border facilities and systems, by systematically reviewing existing research and data on logistics in Jordan, Palestine, and the surrounding region; • preparing a forecast of the demand for logistics volumes and trade and assessing changes in freight flows, considering various possibilities and scenarios including postwar reconstruction, the reopening of borders, national transport development plans and policies, and assistance from other international development partners; and • offering recommendations for the Japan International Cooperation Agency (JICA) and other international development partners for assistance projects for Jordan and Palestine, respectively, to facilitate the smooth flow of freight transport, with a list of short-, medium-, and long-term priority projects. The overall approach to the survey was to determine the volume and direction(s) of cargo flows in the region to the extent possible and to identify and evaluate necessary infrastructure projects and policy measures to accommodate these cargo flows. Changes in trade patterns at each of the border crossings in the past and in the future were assessed and considered to be a particularly useful indicator for forecasting cargo flows, on the basis of which infrastructure projects and measures were evaluated. Since recent dramatic changes were caused by one-off events, the usual approach of extrapolating past trends into the future could not be adopted, but rather a case-by- case approach was taken. Future trade flow projections were undertaken with two scenarios: (i) a low-growth scenario, which incorporated the JICA Survey Team’s projections of GDP growth, projected timings of border reopening(s), new traffic generation sources, and the restoration of historical bilateral trade patterns; and (ii) a high-growth scenario, which assumed that master plans of Jordan and Palestine will be implemented. In both the low- and high-growth scenarios of the JICA Survey Team, significant growth was projected for most transport routes. It was projected that (i) the Jordan border with Iraq (Karameh) will recover some, but not all of its pre-closure levels; and (ii) the Jordan border with Syria (Jaber) will also regain its former traffic levels, as well as regular annual growth. Traffic between the West Bank (Palestine) and Jordan across the Allenby / King Hussein Bridge (A/KHB) is expected to continue its rapid growth in the near term before slowing, although still increasing over time. Palestinian traffic moving through Israeli ports is not expected to increase dramatically in the low- growth scenario, although if the high-growth assumptions prevail, significant growth is expected. Since there are expansions underway at both Ashdod and Haifa Ports, capacity constraints will not be an issue at these locations in the foreseeable future. While high-growth projections show traffic through the Jordan-Saudi Arabia border crossing at Omari increasing to levels four times existing traffic by 2030, traffic moves well through this facility. The provision of additional scanning facilities should be sufficient to enable Omari to cope with this future growth. E-1 Data Collection Survey on Trade and Logistics in Jordan, Palestine and Region Final Report (Executive Summary) In both the low- and high-growth scenarios, significant growth is projected for traffic across the Sheikh Hussein Bridge between Jordan and Israel, to nearly 1 million tons annually, but planned expansion of this facility will substantially increase its capacity to handle this forecast traffic growth. The cost of this expansion was estimated at US$70 million and it will take 3-5 years to complete. One of the improvements will be to double the capacity to scan vehicles, to scan two vehicles simultaneously, rather than one as at present. Overall, capacity at this border crossing will be doubled or tripled after the expansion program is complete. The only border facility currently experiencing capacity pressures is the A/KHB crossing. There are plans to develop a new truck terminal and cargo/passenger handling facility on the Jordanian side and Israel is currently expanding the number of lanes at this crossing. The practice of back- to-back transfer (transshipment) of cargo at the A/KHB creates some congestion, since it increases the time to move a vehicle through the facility. While discussions continue to try to persuade the Government of Israel to abandon these costly and time-consuming measures, these procedures are likely to continue for some time. The JICA Survey Team identified a number of critical issues, both physical and institutional, that work against trade and logistics facilitation. At the end of the report, the team produced a shortlist of projects proposed for potential JICA (or perhaps other development partner) assistance based on a strategic planning technique with logical reasoning. These selected logical and realistic improvement measures were proposed in view of overall regional optimization. It was assumed that assistance will benefit both Jordan and Palestine. Therefore, projects or policies that will benefit only one side and potentially harm the other were avoided. The following projects were selected for Jordan: • Training program for Syrian refugees for the operation of earthmoving equipment for reconstruction • Identification of required improvements to convert the existing Mafraq Airport to a dual- use facility to serve reconstruction requirements in Syria, and the adjacent logistics zone • Development of rail access to new ports at Aqaba along the North-South Corridor • Next-generation border modernization initiative (including, e.g., time release studies, integrated/ coordinated border management, updating of electronic transit tracking, state- of-the-art training) • Improvement and rationalization of the trucking industry E-2 Data Collection Survey on Trade and Logistics in Jordan, Palestine and Region Final Report Contents Executive Summary ................................................................................................................ E-1 1. Introduction ........................................................................................................................ 1-1 1.1 Background .............................................................................................................. 1-1 1.2 Objectives ................................................................................................................. 1-1 1.3 Survey Area .............................................................................................................. 1-3 1.4 Overall Approach and Methodology ........................................................................ 1-3 1.4.1 Overall Approach ............................................................................................. 1-3 1.4.2 Methodology .................................................................................................... 1-6 1.5 Schedule ................................................................................................................... 1-9 2. Existing Trade and Logistics Environment ...................................................................... 2-1 2.1 Socioeconomic Overview ........................................................................................ 2-1 2.2 Trade Patterns ........................................................................................................... 2-4 2.2.1 Jordan ............................................................................................................... 2-4 2.2.2 Palestine ........................................................................................................... 2-7 2.3 Major Logistics Corridors and Facilities ................................................................ 2-11 2.3.1 Regional Corridors ......................................................................................... 2-11 2.3.2 Borders of Jordan and Israel ........................................................................... 2-16 2.3.3 Borders of Jordan with Other Neighboring Countries ................................... 2-22 2.3.4 Ports in Region ............................................................................................... 2-25 2.3.5 Airports in Region .......................................................................................... 2-31 2.4 Major Origins and Destination in the Region ........................................................ 2-34 2.4.1 Phosphate Movements .................................................................................... 2-34 2.4.2 Potash Movements ......................................................................................... 2-35 2.4.3 Oil Movements in Jordan ..............................................................................
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