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Egypt Freight Transport Report Q1 2010Published by: Business Monitor International Published: Jan. 6, 2010 - 63 Pages Table of Contents
AbstractTransport minister, Mohammed Mansour resigned on October 27 2009, taking responsibility for the serious rail accident three days earlier at El Ayyat, 50km south of Cairo, which led to the death of 18 people. The accident was caused after a water buffalo strayed onto the track and was hit by a passenger train. The train stopped - only to be hit by a second train which was following it and which smashed into the first one’s rear carriages. Eight railway workers were charged with negligence and the head of Egyptian National Railways also resigned. According to investigators, a blood sample taken from the driver of the first train revealed traces of cannabis. It was said that he let 20 minutes elapse before alerting the authorities about his unscheduled stop. Investigators also said a signalman had left work early and therefore failed to warn other drivers of delays because of the water buffalo on the tracks. The level of safety across Egypt’s rail network has been an issue for a number of years. One of the minister’s predecessors, Ibrahim el-Demery, was sacked in 2002, after a more serious accident in which 361 people died. In the latest case, political infighting was thought to have also played a part in the minister’s departure, since Mansour was identified with a group of business oriented officials in the cabinet, said to be linked to Gamal Mubarak, the President’s son and head of policy for the ruling National Democratic Party (NDP). Mansour, who after the accident had initially said he would not resign, decided to go after sharp criticism from Zakaria Azmi, another senior NDP politician, who criticised him for spending heavily on advertising rather than on railway safety.We have again adjusted our macroeconomic forecasts for Egypt, with the country set to do better through the international recession than we had at first imagined. We now estimate that GDP will have dipped from 7.2% growth in 2008 to 4.7% in 2009 (was 3.7% earlier). For 2010 we predict expansion of 3.5% (was 1.8%). Taking subsequent years into account the forecast for 2010-2014 is for an annual average GDP growth rate of 4.9% per annum, down on the average of 6.1% in the preceding five-year period in 2005-2009, but still a relatively impressive rate when compared with peer economies. The effect on our freight traffic forecasts for the period as a whole, compared with the preceding five years, is moderately negative because of the slowdown. We maintain and have fine-tuned some adjustments to existing modespecific forecasts. We have trimmed the airfreight forecast after 2008. While the government’s commitment to consider ‘open skies’ policies is positive, the force of the global downturn in the sector in 2009 remains a negative factor. Likewise, we have trimmed the mode-specific forecasts for shipping, given the slump in Egyptian and world trade levels. Taking the recovery from this low point in 2009 into account, our forecasts for freight carried across all modes and measured in million tonnes per kilometre (mntkm) stand at an annual average of 5.2% in the 2010-2014 period, just ahead of the expansion of the economy as a whole. According to our latest estimates, transport and communications GDP rose by 4.9% in 2009, just ahead of overall GDP, which grew 4.7%. For the 2010-2014 forecast period, we expect the transport and communications sector, measured by value, to remain ahead of the wider economy. It will achieve average annual growth of 5.1%, compared to the 4.9% overall GDP growth rate. The total value of transport and communications GDP will rise to US$32.2bn in nominal terms by 2014, representing 9.9% of Egypt’s GDP. The transport and communications sector employed 1.30mn people, or 6.4% of the labour force, in 2009. We see the figure rising to 1.42mn people, still representing 6.4% of the total, by 2014. BMI is forecasting moderate to strong growth in Egypt’s freight transport sectors between 2010 and 2014. Although the government has declared its intentions to improve all aspects of the transport infrastructure, these plans are long term and their benefits tend to lag a little behind expectations. As a result, the industry will have to continue to make use of the existing facilities for several years. A significant current feature of the Egyptian freight and logistics sector is that while volumes may be exhibiting slow growth in some areas, the value of the business was boosted by high oil prices. However, this factor went into reverse in the second half of 2008 and in 2009 as the real level of international oil prices fell back. We expect pipeline throughput to be the fastest growing transport mode, on the back of the development of Egypt’s plentiful natural gas deposits and strong export demand. Pipeline throughput will grow by an average of 7.4% across the forecast period. It will be followed by air freight at 6.1%, sea cargo at 5.7% inland water transport at 5.4%, and road freight at 4.9%. Rail freight will be the slowest-growing at 3.2%. Get Full Details About This Report >> |
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