Public offering of ports raises criticism of the Egyptian governmental economic plan

Economic experts, including the well-known Egyptian economist Gouda Abdel Khaleq, criticized the State Ownership Policy plan, which the Egyptian government issued to propose a governmental program to handle the state-owned assets, as the program included the abandonment of the land and seaports, which they considered vital for the national security. According to several experts, Egypt’s strategic location made her ports coveted by many regional actors who endeavour to dominate them. Some experts suggested that there is no need to privatize the docks. Instead, it could be outsourced administration to international companies, as in the case of Eastern Port Said Port, which Maersk Line administrates.

The privatization of ports raised questions about the possibility of privatizing roads and monorails founded by the government over the past few years. The concerns are well-established due to the experience of DP World, which acquired the usufruct of Ein Sokhna port, which led to the deterioration of the port as shipments were left overcrowded due to the shortage of unloading equipment and the failure to accommodate the large cargo ships due to the small port draft.

Al Jazeera’s video investigation in 2019 showed that DP World’s administration of Ein Sokhna Port since 2008 denied the port of development over the past 13 years as the Emirati company made layoffs and decreased the trading in the port. This raised concerns over the Emirati company targets in the port and its endeavour to cripple it, favouring Jebel Ali Freezone in Dubai and other ports the company seizes around the Red Sea.

The governmental plan

Days ago, Egypt’s PM Moustafa Madbouly declared the State Ownership Policy Document, which included the public offering of seven main seaports in the stock exchange market. The most prominent ports to be sold are Alexandria, al-Dekhila, Damietta, and Eastern and Western Port Said ports on the Mediterranean. On the Red Sea, there are Safaga, al-Adpia, Sokhna and Suez. The governmental plan resulted from the shortage of greenback reserves in the Egyptian banks.

The spokesman of the cabinet, Nader Saad, commented on the news saying that the government aims to support the private sector as a solution to the current crisis. Saad added that on Wednesday, the state seeks to engage the private sector through the public offering of the state-owned companies in the stock exchange market. And regarding the ports, Saad said the ports would remain Egyptian. The idea aims to create an Egyptian holding company to manage all Egyptian ports to develop the ports considering the increased competitivity in this sector worldwide. Some stocks of this company will be offered for private investment.

Ports’ underdevelopment

According to the sea sector of the transport ministry, the Egyptian seaports recorded a merchandise trading rate of 162.7 million tons compared to 156 million tons in 2020. Alexandria port recorded 55.6 million tons, Damietta 32.7 million tons, and 63 million tons for Port Said and Shokhna ports.

In the same vein, the transport and loading services represent 2.5% of the total market value of companies listed in Egypt’s Stock Exchange Market. They are distributed mainly to three state-owned companies: Canal Shipping Agencies, the United Arab Shipping Company and Alexandria Container and Cargo Handling, and one private company, ETRS.

However, the Egyptian ports suffer several backdrops like the small size of the ports’ drafts, which reach only 13 meters on average, which prevents accommodating large and even medium-sized containerships. Another problem is the governmental interest in oil tanker ports and quays while neglecting the fish boats. And regarding the human resources, there are no training centres for the ports’ workers and little rescue equipment to save them. In contrast, the maritime safety centres have few authorities to inspect and check the provision of safety equipment in the ports. Accordingly, the seaports sector needs major rescue centres and to improve the capabilities of the ports to provide services further than the reception of the ships.