Egyptian seaports suffer heavy losses under Emirati seizure

Observers have pointed out that the UAE, represented by the Dubai Ports World Company, controls several important Egyptian ports, which exacerbated widespread anger in Egypt over the Egyptian regime’s mismanagement of state resources in Egypt.

Dubai Ports World controls Ain Sokhna port and is heading to possess other ports and a large part of the Suez Canal Corridor project’s shares. Last December, the Ministry of Transport announced a reduction in port fees for the second time within a few months, which raised questions about the reasons why, and the repercussions. Especially since it leads, according to the Minister of Transport’s statements, to losses exceeding EGP 1 billion ($63.2 million), and it is not considered sufficient for the return of shipping lines migrating from Egypt, according to experts.

The decision mentioned above stipulates the granting of discounts for ships with a tonnage of fewer than 80,000 tonnes, 30 per cent, and up to 40 per cent for vessels higher than 80,000 tonnes. The vessels handling loading-unloading transit containers, whose number exceeds 50 containers, is granted a reduction multiplied by the number of boxes, with a maximum of 60 per cent.

Port losses

The government is trying to avoid port losses and achieve navigation stability with a set of decisions, most notably the reduction of high port fees. Kamel Minister, Minister of Transport, said: “Port fees have been reduced to stimulate navigation.” In televised statements, the minister added: “Last year, international shipping lines migrated from Egyptian ports due to the increase in service fees.” He pointed out that there were great global alliances that took place, and they owned ports and container terminals and began to withdraw from the Egyptian ports, under the pretext that the fees are high.

The Egyptian ports one by one were surpassed by many ports in the Arab region, the Mediterranean and the Red Sea. During the past two years, Port Said Port was severely affected by competition with the Mediterranean corresponding ports. Shipping lines moved from the East Port Said area due to the high fees.

Navigation lines migration

The loss is due to the Ministry of Transport Decision No. 488 of 2015 regarding regulation for services rendered to ships in Egyptian seaports, covering about 16 shipping lines. For his part, Major General Ayman Saleh, Head of the Maritime Transport Sector at the Ministry of Transport, said, “Egypt’s share of transit is meager.” He added in press statements that the global alliances that deal with East Port Said, for example, represent only 40 per cent of those lines’ volume. Therefore, there is another 60 per cent that must be worked on attracting them and increasing the importance of their business.

Others explained that the ports need to solve the problems accumulated over the long years of short berths, lack of depth of the draft, and inadequate services provided to transiting ships. These issues have made global maritime commercial companies head to other ports bordering the White and Red Seas. Egypt has 15 ports, six ports located on the Mediterranean, and nine ports on the Red Sea and fishing ports. Some of these ports need to deepen the draft and lengthen the berths to be suitable for receiving large commercial vessels, which transport large loads of goods and containers.

The UAE occupation

This comes at a time when the new incursion of Dubai Ports World in Egypt has raised the suspicion of Egyptians after the Emirati company signed in late 2018 a partnership agreement with the Suez Canal Authority to acquire 49 per cent of the project to develop the economic axis of the canal. At the time, the pioneers of social networking sites interacted with the news of the Egyptian regime’s announcement of the partnership between the UAE’s Dubai Ports and the Suez Canal Authority, which activists considered new Egyptian sale facilities exchange for Gulf money.

Dubai Ports World was established in 1999. It currently operates 78 ports worldwide, including Ain Sokhna Port in Egypt, where its work has not been free of legal disputes and unfair accusations on Egyptian workers’ rights. According to the company’s executive director, the company plans to establish a port on the Mediterranean coast in Egypt, to become its second port after Ain Sokhna. He said that Dubai Ports is studying three investment opportunities in Egypt, one of which is establishing a port on the Mediterranean coast.