MENA region - Transporting world trade

By Robert Bailey

As an important global transport hub, the MENA region has ambitious transport plans, for both ports and railways. Robert Bailey reports Indications that the contraction in world trade has bottomed out are good news for the Middle East, a region that acts as an increasingly important trading hub between Europe and the Far East. Rising imports and transshipment volumes over the last decade have generated huge ongoing investments throughout the Middle East and North Africa (MENA) region to accommodate the surge in trade. Global recovery will underpin the viability of these ports and transport investment programmes, especially in railways. Apart from stimulating economic growth, these investments are important for employment. At least 100,000 jobs, for example, could be created because of Morocco’s Tanger-Med development, a project that involves building one of the largest ports on the Mediterranean. The port and its free-zone, located on the Straits of Gibraltar, 15km from Europe, are expected to turn the region into a major transit hub. The first of two container terminals is scheduled to be operational in the second half of 2012, with a second terminal planned for 2015 when the port will be able to handle 8 million containers a year. Elsewhere on the North African littoral, Libya’s port at Sirte is also undergoing a $2 billion makeover in anticipation of growing business with Europe. The Gulf, in particular, has become one of the most dynamic and vibrant international maritime centres in the world. The region is home to DP World, which now ranks as the fourth-largest global port and terminal operator, with nearly 50 marine terminals, and 12 new developments ranging across 31 countries. Jebel Ali, 35km southwest of Dubai city, is the jewel in DP World’s crown. The port’s man-made harbour is the largest in the world, with more than 70 berths with a capacity to handle up to 15 million containers a year. If present expansion plans remain on course, this capacity could increase to 80 million containers by 2030. Most Gulf states are building new ports. Qatar’s new port at Mesaieed is costing $5.5 billion, while $1.2 billion is being spent to extend Ras Laffan port. In Saudi Arabia, $5 billion is to be spent on a new seaport to serve King Abdullah Economic City. The Kingdom’s existing Red Sea terminal at Jeddah Islamic Port is also being expanded, at a cost of $450 million. The port handles some 60 per cent of Saudi Arabia’s maritime cargo imports, with nearly 6 million containers handled there a year. The Kingdom is spending another $700 million on a new port at Ras Az Zour on the Gulf. One of the principal projects in the Kingdom’s massive $26 billion rail development programme is the Landbridge line, which will link Jeddah with the Gulf. Once in operation, this line will reduce container transfer times to about a day, compared to at least a week’s sea journey around the Arabian Peninsula at present. In Abu Dhabi, extensions to Khalifa port and its industrial area will set the Emirate back some $2.5 billion, with improvements to Mina Zayed port another $750 million. Oman is spending $1.1 billion on port developments at Duqm and another $400 million on the Port Sultan Qaboos project. Kuwait’s Shuwaikh Port has invested heavily in new equipment and hopes to leverage its strategic position to service Iraq’s container traffic needs as the latter’s reconstruction efforts build up. The Emirate is also expected to spend $1 billion developing a port on Bubiyan Island. Bahrain is positioning itself as a logistics hub for the region and a gateway to the Northern Gulf, with the opening in 2009 of the Khalifa bin Salman Port, which has a capacity of 1.1 million TEUs per annum. A logistics zone is being developed 1km from the port. In contrast to the attention given to ports and roads in the MENA region, it is only recently that rail development has entered the picture. This is surprising, given the economic and social benefits accruing to rail-linked communities, as well as the opportunities for expanded trade and commerce.  Egypt has the most extensive rail system, which carries some 1.5 million passengers a day. However, its 9,000km of track needs substantial modernisation and expansion. Several new projects have been proposed on a private-public partnership basis. These include lines from Cairo to Tenth of Ramadan City and Sixth of October City, as well as from Alexandria to Borg Al Arab. Private sector investment is also being looked to for improvements to mainline railway stations in Alexandria, Luxor, Aswan and Cairo. Substantial improvements have been made to transport facilities in the Egyptian capital. Two metro lines have been built in the last 20 years and a third, linking Imbaba to the city’s airport, is under construction. A further two lines are also envisaged. Algeria has plans for a metro system in Algiers. Overall, the government has outlined $3.7 billion of railway projects, including a 1,200km east-west line. Jordan plans to build some 1,600km of track connecting Amman with Aqaba, Zarqa, Mafraq and Irbid. In Oman, feasibility studies are being carried out for a 200km rail track, initially linking Sohar to Birka north of Muscat, with a later extension to Duqm planned. Dubai has taken the lead in urban public transit with the opening of the first metro in the Gulf. The 54km track has cost $4.2 billion and two further extensions are due to open in 2010. Abu Dhabi also intends to build a $7 billion underground network. One of the lines will connect tourism developments on Saadiyat Island with the city’s downtown, eventually extending to 131km. Railways, as much as roads, will increasingly link cities and communities within the Gulf Cooperation Council (GCC) countries. There are plans for a railway linking Dubai and Abu Dhabi cities, to be built by 2015. In November 2009, the government-owned Qatari Diar Real Estate Investment Company linked up with Germany’s Deutsche Bahn to create the Qatar Railways Development Company, which will oversee the Emirate’s rail development. Projects include the construction of the Doha metro, the Lusail and West Bay light-rail schemes and a causeway to connect Qatar’s network to Bahrain. GCC transport ministers have approved a 1,900km line from Kuwait to Oman, with spurs eventually to Iraq and Iran. A feasibility study undertaken by Canada’s Canrail, France’s Systra and Lebanon’s Khatib & Alami was completed in 2008 and the six Gulf States have agreed to allocate the expected $25 billion cost in proportion to the length-of-line in each country. Railways clearly have the potential to act as a unifying factor. Global Arab Network Robert Bailey is a journalist and writer specialising in the Middle East. This article is published in partnership with the Middle East Association and  produced by Newsdesk Media