29 Apr. - 5 May 1999
Issue No. 427
|Published in Cairo by AL-AHRAM established in 1875|
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'Rotterdam of the East'by Muriel Allen
A group of leading Dutch companies specialised in ports have intensified their drive to win contracts to build and manage Egypt's planned Port Said East Bank container terminal in Sinai and to revitalise Alexandria port and the adjacent city area. The Dutch government is strongly supporting this private sector initiative. Netherlands Minister for Foreign Trade Gerrit Ybema headed a large delegation of government officials and businessmen who visited Egypt last week to promote these two proposals and to seek trade deals, joint ventures and contracts in other fields. A decision on the winning bids is expected within days.
The minister said Egypt and the Netherlands both occupy strategic geographical locations and have very important ports. Holland owes its good economic position to its favourable location and Rotterdam port, the largest in the world. "Egypt has the potential to be the gateway to the Middle East and Africa" for trade once its new Port Said East Bank harbour complex is completed. The new facility can be "the Rotterdam of the East", the minister predicted. The estimated cost of Port Said East is $1 billion covering infrastructure, superstructure and industries. Ybema termed his mission "very successful" after he met with six ministers, the head of the Investment Authority and key businessmen.
As Egypt seeks its share of increasing international trade, it will need new containerised ports operating as transshipment centres. This will be the role of Port Said East. The new Port Said container terminal will have a capacity of 1.5 million TEUs (twenty foot equivalent units), meaning the number of containers handled.
The Dutch first proposed building the container terminal at Port Said East in 1996 at the MENA Economic Conference in Cairo. Last year they won Egyptian government approval for their feasibility study of the project, and the Dutch consortium led by Europe Combined Terminals (ECT) has outlasted all of its competitors except for P&O of Australia. ECT is the largest containerised cargo handler in Europe. "Maersk of Denmark, one of the world's largest shipping lines, has an agreement with ECT to use the new port for transfer of containers coming from Asia and Europe, and the Dutch have lined up other major shipping lines as well so a large volume of container business is guaranteed," said Bert Kruk, director of TEMPO, the technical and managerial assistance arm of Rotterdam port.
Kruk emphasised that Port Said East will have a great advantage over other container shipping hubs in the region: ships will not have to deviate from the main shipping route between Singapore and Rotterdam in order to unload cargo at the Egyptian facility because it is located on this route. When ships use the Suez Canal, they will have to pass Port Said East so they will be more likely to use its facilities.
"ECT is also bringing the strength of the Netherlands Transport and Logistics Platform with it," said NTP Chairman Ruud Hoorweg. NTP is an association of some 30 large companies active in ports and inland transportation. "If Egypt chooses ECT, the companies in NTP will bring more related business to Egypt." NTP, which is financed by the Dutch government, designed the masterplan for the Port Said East Bank port and industrial zone. "We would like to build a little piece of Rotterdam in the Sinai," Hoorweg said.
The Dutch survey of the Alexandria port, requested by the governor and the Alexandria Development Centre, a group of key businessmen, concentrates on the easternmost part of the western harbour because that is the part with the most potential for redevelopment. The Dutch have proposed various options for their participation in modernising the port and the surrounding area, including sending two specialists to work with users, planners, decision-makers and financiers. The study done by NTP and TEMPO suggests possible actions such as redeveloping parts of the port; shifting cargo transport to barges and trains; and pollution control.
Besides their important focus on ports, the Dutch are also interested in investing in the telecommunications, inland transport and civil aviation sectors in Egypt, Ybema said. "There's a serious interest in projects based on BOT (build, operate and transfer)," he added. The Port Said project will be executed on a BOT basis.
Ybema said he was impressed with Egypt's economic transformation. He signed memos of understanding on economic cooperation, cooperation in wind energy and on projects in the fields of infrastructure, agriculture and environment. The Dutch government has offered 10 million guilders ($5 million) over two years for technical assistance and promotion of foreign investment in Egypt. This programme is designed to attract Dutch companies into the Egyptian market and calls for funds from the Dutch private sector equal to one-third of the government's contribution. In 1998 investments from the Netherlands in Egypt stood at $170 million.
In recent years bilateral trade between Egypt and the Netherlands has grown to $500 million annually. Although Egyptian exports to Holland are growing, the trade balance for Egypt is very negative, according to Ybema, who said his country can help Egypt stimulate its overall exports. He offered help in improving the quality of products, especially in the agricultural sector in such aspects as packaging and uniform size of fruits and vegetables. "Until now Egypt has not used the opportunities it has in this field. To be successful a company has to deliver a first quality product on time in the right package."
Rudd Schuurs, manager for business development at Nuon International, part of Holland's Nuon Energie Group, said his consortium of companies has done a feasibility study on export and investment related activities in Egypt's wind energy sector. One of the projects proposed is a wind farm which would generate 600 megawatts (Mw) of electricity, to be in operation by 2005 in Zafarana on the Red Sea coast. The Nuon group is cooperating with Minister of Electricity Maher Abaza and Egypt's New and Renewable Energy Authority to help develop the wind farm. The Egyptian government has an ambitious wind policy. Its long-term target is to produce 6,000Mw from wind power by the year 2017. The short-term target is 600Mw by 2005, and the Dutch companies want to provide 60Mw of that. Other governments also are providing grants or soft loans for parts of the 600Mw programme.
A dual taxation treaty between the Netherlands and Egypt was signed by Ybema and Finance Minister Mohieddin El-Gharib. The Dutch official said it would diminish the uncertainty for Dutch investors in Egypt. Companies in the delegation think it will stimulate more investment from Holland.