LOCATED JUST 130KM southeast of Egypt's capital, Cairo, and 40km from the Suez Canal, Sokhna Port and Logistics Centre is strategically placed to serve one of the world's busiest commercial shipping lanes. This port has already begun to capitalise on Egypt's location at the global crossroads between the East and West and the explosive growth of maritime trade in recent years.
The Egyptian authorities have a powerful vision for this development and by 2020, cargo volumes of 90m tons (m/t) are forecast with some 4m TEUs (20 foot equivalent) of containers, more than 10m/t of agri-bulk, nearly 10m/t of other dry bulk cargoes, 30m/t of liquid bulk cargoes and a million tons of general cargo passing through the port each year. Handling these volumes of cargo will require over 8,000 ship calls a year and at least an extra 12km of berths will need to be built. Port-related rail traffic alone is forecast to reach 100 trains a day.
The move to develop the area dates back almost a decade to when the government realised that to meet the demands of the domestic economy and the projected needs of Asian economies to move more goods to markets in the West, there was an urgent need to increase Egypt's port capacity and, in particular, provide efficient transhipment services.
The UN trade organisation UNCTAD estimates that in 2003, up to 80% of the world's 6bn tons of cargo was moved by maritime shipping. Asian countries, including Japan, have the largest share of the total volume of seaborne world exports (37%), and Asia-Europe routes have recorded annual growth rates of 20% since the turn of the millennium, directly attributable to the increasing trade between the two regions.
The choice confronting the government in the mid-1990s was between expanding the country's existing port facilities at El Dikheila, Damietta, Port Said, Safaga and Suez--or to build a new port. The government finally decided to do both by building an entirely new port at Ain Sokhna and developing Port Said East adjacent to the existing Port Said port.
It was forecast that the economy of Egypt--the largest nation in the region with a population of 70m and a burgeoning domestic market--as well as the growing volume of international shipping passing through the region, could be served by developing these two facilities at either end of the Suez Canal.
According to the IMF, the Middle East already has one of the world's strongest trade growth rates, averaging 4.5% a year; and Egypt's export markets make the country a regional economic powerhouse. It was crucial for Egypt to meet the demands of its own domestic economy--an economy that posted a 5.2% increase in 2005, is expected to achieve a 6% rise this year and wants to meet a 7% target for 2007.
The government took the view that a build operate transfer (BOT) model was the best option for financing the new port at Sokhna, and even as it began developing the infrastructure at Basin 1, constructing the breakwaters and, through the Red Sea Port Authority, dredging the port's entrance channel--it invited international bids to operate and manage the facility as well as build the port's superstructure. The Sokhna Port Development Company (SPDC), an operating company of the Amiral Group, won the Egyptian government's renewable 25-year BOT concession agreement. To improve efficiency, add capacity, streamline procedures and reduce costs, Egypt introduced legislation in January 1998 enabling the privatisation of the maritime sector, allowing private companies to operate ports and act as maritime agencies. Sokhna was to become the first fully private port in Egypt.
SPDC developed the superstructure for the port and purchased two post-panamax ship-to-shore gantry cranes, …