Mansour’s message outlasts him

MansourÆs message outlasts him Egyptian minister gives update on infrastructure mere days before he resigns.

      In mid-October, American Shipper attended the annual meeting of the American Chamber of Commerce in Egypt to hear the country's then transport minister, Mohamed Mansour, describe the state of the country's port, road and rail infrastructure system.
      As if to underscore the fluid nature of politics and development in emerging markets, two weeks after the speech, Mansour resigned over the fallout from a passenger train wreck that killed 18 people.
      Mansour had survived for four years as transport minister, and had been through these types of disasters before. Less than a month after taking office, 1,000 people perished in a Red Sea ferry accident.
      But the most recent incident seemed one too many to survive.
      In his speech, Mansour described how over the past four years his office had been trying to implement the road upgrades, both in freight and passenger transportation, his country needed to progress.
      The Ministry of Transport, he said, has a plan to upgrade all one-lane arteries (in each direction) in the Nile Delta to two lanes each way in the next five years. In the same period the ministry is planning to convert six two-lane roads into highways.
      It's only the first step of many needed to transform Egypt's antiquated transportation network into one worthy of the country's potential as a freight hub in the Middle East and Mediterranean regions.

'The transport sector is growing almost twice as fast as GDP. It is brining growth to the country.'

      The government has identified 18 billion Egyptian pounds ($3.3 billion) worth of road projects that need to be undertaken. Much of the spending (about 60 percent of the government's road budget) is being spent in the southern, more undeveloped, part of the country to help develop its industrial and agricultural sectors.
      Mansour said the government in the previous 25 years up to 2005 had averaged building 300 kilometers of road per five years. In the last four years, the government has constructed 2,300 kilometers of road, he said.
      A fixture in the country's business community (his family is the sole distributor of GM cars in Egypt) Mansour said he hadn't gone public with much of what the ministry has accomplished because he wanted more action than words. The AmCham speech was to be the beginning of a change in that regard, as he sought to outline how infrastructure construction was helping drive development.
      'The transport sector is growing almost twice as fast as GDP,' he said. 'It is bringing growth to the country.'
      An APL report on Egypt's freight transportation and logistics scene, Connecting Egypt: Opportunities and Challenges in Freight Transportation and Logistics, projects that Egypt's freight volume traveling by road will increase 22 percent by 2012. During that time, the government expects to expand capacity by 23 percent, yet the report finds that of six major road connections in northern Egypt, all will be inadequate to handle projected traffic by 2022. The six roads connect Cairo with Egypt's four main seaports.
      To alleviate the burden on Egypt's roads, Mansour said there must be a push to move cargo to the country's waterways, most notably the Nile.
      'We don't see any freight going back and forth on the river and the question is why,' Mansour said.
      While he didn't have an answer to that rhetorical question, the reasons are myriad. There's shallow draft in the Nile Delta region north of Cairo and a total lack of river terminals and barges. The government is seeking to address that situation, as well as upgrade ports, the rail network and roads, through increasing public-private partnerships.
      'The government can't be a jack of all trades and master of none,' Mansour said, in explaining the need for private sector involvement.
      In an incredibly prescient moment, Mansour sighed and looked out over the crowd before launching into a discussion about the troubles of Egypt's rail system.
      'The railway is frankly my biggest headache, and what a headache it is,' he said. 'For many years, the railway was neglected. Trying to change the mindset of how things are to how they will be is very difficult. The railroad was losing 1.2 billion Egyptian pounds (about $220 million) per year and had borrowed another 1.8 billion ($330 million). The Ministry of Transport asked the government for $5 billion ahead of time and said 'we won't ask for anything else.' '
      The idea was to turn the railways into a profit-making unit rather than a loss-making one within four years from 2006, a plan that Mansour says is ahead of schedule
      'Last year's losses were 178 million Egyptian pounds and hopefully this year we will be break even,' he said.
      Mansour said he is expecting 6 billion Egyptian pounds ($1.1 billion) in investment from the government in the transport sector for short-term projects. Of that, 105 million Egyptian pounds will be spent on river transport, 3.4 billion on ports and 1.6 billion on roads.
      It's interesting to note that double the investment is going into ports as in roads, while road capacity may be the greater need in the short term.
      'I have not asked for anything reasonable that has been refused by the government,' Mansour said. 'If it makes sense, it has been funded. Have we got to where we wanted to? My direct answer is 'no.' There is more to come.'
      Unfortunately for Mansour, it won't come under his watch.