LATEST ECONOMIC BRIEFINGS
EMIRATES: DUBAI | 30.07.2010
Dubai’s capital markets appear to be in for significant change with plans unveiled to establish a second-tier stock exchange coming hot on the heels of Dubai Financial Market (DFM) – the government-administered domestic bourse – and the DIFC-based NASDAQ Dubai’s move to formally link their trading platforms. All of this is happening as speculation of a merger between the bourses of Dubai and Abu Dhabi mounts.
ALGERIE | 30.07.2010
Les efforts importants déployés par l’Algérie pour augmenter la production céréalière commencent à porter leurs fruits, dans la mesure où les récoltes record de l’année dernière et les rendements importants de 2010 aideront à réduire les coûts d’importation et à créer des emplois sûrs dans les zones rurales. Cependant, l’objectif de l’autonomie alimentaire fixé par le pays reste encore bien éloigné.
SENEGAL | 30.07.2010
Le Sénégal est en train de devenir un leader en matière de développement de l’énergie solaire comme énergie de l’avenir, et ce, à la fois à l’échelle nationale et continentale. Pour y parvenir, le pays veut augmenter l’utilisation des énergies renouvelables afin de surmonter ses propres manques et promouvoir un grand programme international ayant pour but de mettre fin à la dépendance de l’Afrique de l’Ouest à l’égard des combustibles fossiles.
BULGARIA | 30.07.2010
Though Bulgaria’s economy is likely to remain in the slow lane for the rest of this year, the country’s banking sector continues to show resilience in the face of global economic contraction. There are concerns, however, that increasing levels of bad loans carried by some lenders could add to pressures on the sector.
OMAN | 28.07.2010
A raft of new agreements recently signed by the Ministry of Transport and Communications will see a significant round of investment in Oman’s transport infrastructure. The 15 agreements, signed earlier in July, cover projects in land, sea and air infrastructure and are worth a total of OR136.9m ($355.9m).
COUNTRY COVERAGE
Slow Train to Aqaba
Jordan, Volume 65
25.06.2004
25.06.2004
After protracted delays, the privatisation of one of Jordan's key railways rolled a little further down the tracks this week, with the announcement that five international companies had qualified for the consultancy tender. The news brought fresh deliberations on the kingdom's rail system, and on its transport links in general, with plenty of room still for new investment in both.
The Executive Privatisation Commission (EPC) announced June 23 that out of 29 companies originally expressing interest in the consultancy for the sale of the Aqaba Railway, five had qualified. These were Ernst & Young, UBS Investment Bank, CPCS Transcom Ltd, PricewaterhouseCoopers and Maxwellstamp.
Now these companies will be sent the tender documents, and it is widely hoped that the process of sale can be completed as soon as possible. The privatisation was agreed by the government last year, yet has been on the agenda since the late 1990s. Yet, as Minister of Public Works and Housing and Minister of Transport Raed Abu Saud told reporters this week, the railway privatisation project will be implemented in two stages, both of which could take some time.
The first stage involves the railway's restructuring, including turning the Aqaba Railway into a shareholding company with its shares owned by the government. Then comes the privatisation stage, in which the sale of all or part of the company's shares to a specialised strategic partner, will take place.
So, what might be the attraction to foreign investors - whom the Jordanian government is specifically targeting - of buying a stake in the Aqaba railway? To begin with, it is one of the country's only two lines, the other being the Hijaz railway that links Damascus with Medina, in Saudi Arabia, via Jordan.
It is also a highly strategic property when it comes to one of the kingdom's chief exports - phosphates. The Aqaba line is the domain of the state-owned Aqaba Railway Corporation (ARC), and provides rail services from phosphate mines owned by the Jordan Phosphate Mines Company (JPMC) at el-Abiyad and el-Hassa. The ARC also transports phosphate from the JPMC mine at Eshidiya, but through a trans-shipment facility at Aqabat Hedjaz, as the Eshidiya mine is not connected to the railway. The phosphates are transported down the line to fertiliser complexes and export facilities at Aqaba.
About 2.8m tonnes of phosphates - which, together with related products, traditionally account for around two-thirds of Jordan's export earnings - are currently transported by the ARC. However, with construction of extensions of the railway and upgrading of its operational capabilities, this tonnage could rise dramatically. With estimates of Jordan's proven, indicated and probable phosphate reserves ranging from 1.5bn to 2.5bn tonnes, there is room for expansion, too.
Yet improving the line could take some serious investment. One of the principle difficulties - as with the Hijaz line - is that of gauge. Both lines were built over a century ago and are narrow gauge (105 cm), which would need to be expanded to standard gauge (143 cm) if they were to take more modern, higher-capacity, rolling stock. The total length of the Hijaz railway stretch that passes through Jordan is about 452 km, while the Aqaba line is around 250 km longer.
Upgrading the gauge is also important if Jordan is to realise its long-term plan of expanding rail services and integrating them with other regional routes - real or projected. As a result, the kingdom has been financing improvements on the lines, with help in financing from organisations such as the US Overseas Private Investment Corporation (OPIC). They provided some $52m in financing and $6m in political risk insurance for the railway back in 1999, with the US company Wisconsin Central International, Inc involved in the privatisation and upgrade of the line.
There is also some evidence that investment in railways pays. The Hijaz line, while still in need of great improvement, is proving to be a great success in shipping goods between Jordan and Syria. In the last two years, official Jordanian figures show a 600% increase in demand. A 25% discount on freight costs was also announced earlier this year, with that likely to push up demand still further.
However, the Aqaba and Hijaz railways are just two of the many transport infrastructure projects that the kingdom's authorities are currently looking at. Upgrading and expanding the road network has also been a priority, with this week bringing news of developments within the major al-Urdun road project.
This work, begun in 2000 and comprising five phases, has estimated costs totalling JD21m. On completion, the new road scheme is expected to accommodate 200,000 cars per day. This, it is hoped, will alleviate current congestion problems around Amman. The al-Urdun road will connect the capital city's downtown with the kingdom's northern cities, easing traffic on Queen Rania Road (University Road).
This week saw Greater Amman Municipality (GAM) announce that construction work on the Jubeiha-Abu Nuseir intersection - the third phase of the project - is almost finished, with the upper lane now open to traffic.
"The construction of the intersection is on schedule and GAM and the Ministry of Public Works and Housing are expected to complete al-Urdun Road by the end of the year," deputy Amman Mayor Abdul Raheem Boucai said on June 22.
More still needs to be done if the kingdom is to achieve its goal as a regional transport hub and take full advantage of its geographical position, which naturally makes it a regional corridor for land transportation - by rail or road. Yet the signs are that this is increasingly on the horizon, with the kingdom's trains - and trucks - now picking up speed.
The Executive Privatisation Commission (EPC) announced June 23 that out of 29 companies originally expressing interest in the consultancy for the sale of the Aqaba Railway, five had qualified. These were Ernst & Young, UBS Investment Bank, CPCS Transcom Ltd, PricewaterhouseCoopers and Maxwellstamp.
Now these companies will be sent the tender documents, and it is widely hoped that the process of sale can be completed as soon as possible. The privatisation was agreed by the government last year, yet has been on the agenda since the late 1990s. Yet, as Minister of Public Works and Housing and Minister of Transport Raed Abu Saud told reporters this week, the railway privatisation project will be implemented in two stages, both of which could take some time.
The first stage involves the railway's restructuring, including turning the Aqaba Railway into a shareholding company with its shares owned by the government. Then comes the privatisation stage, in which the sale of all or part of the company's shares to a specialised strategic partner, will take place.
So, what might be the attraction to foreign investors - whom the Jordanian government is specifically targeting - of buying a stake in the Aqaba railway? To begin with, it is one of the country's only two lines, the other being the Hijaz railway that links Damascus with Medina, in Saudi Arabia, via Jordan.
It is also a highly strategic property when it comes to one of the kingdom's chief exports - phosphates. The Aqaba line is the domain of the state-owned Aqaba Railway Corporation (ARC), and provides rail services from phosphate mines owned by the Jordan Phosphate Mines Company (JPMC) at el-Abiyad and el-Hassa. The ARC also transports phosphate from the JPMC mine at Eshidiya, but through a trans-shipment facility at Aqabat Hedjaz, as the Eshidiya mine is not connected to the railway. The phosphates are transported down the line to fertiliser complexes and export facilities at Aqaba.
About 2.8m tonnes of phosphates - which, together with related products, traditionally account for around two-thirds of Jordan's export earnings - are currently transported by the ARC. However, with construction of extensions of the railway and upgrading of its operational capabilities, this tonnage could rise dramatically. With estimates of Jordan's proven, indicated and probable phosphate reserves ranging from 1.5bn to 2.5bn tonnes, there is room for expansion, too.
Yet improving the line could take some serious investment. One of the principle difficulties - as with the Hijaz line - is that of gauge. Both lines were built over a century ago and are narrow gauge (105 cm), which would need to be expanded to standard gauge (143 cm) if they were to take more modern, higher-capacity, rolling stock. The total length of the Hijaz railway stretch that passes through Jordan is about 452 km, while the Aqaba line is around 250 km longer.
Upgrading the gauge is also important if Jordan is to realise its long-term plan of expanding rail services and integrating them with other regional routes - real or projected. As a result, the kingdom has been financing improvements on the lines, with help in financing from organisations such as the US Overseas Private Investment Corporation (OPIC). They provided some $52m in financing and $6m in political risk insurance for the railway back in 1999, with the US company Wisconsin Central International, Inc involved in the privatisation and upgrade of the line.
There is also some evidence that investment in railways pays. The Hijaz line, while still in need of great improvement, is proving to be a great success in shipping goods between Jordan and Syria. In the last two years, official Jordanian figures show a 600% increase in demand. A 25% discount on freight costs was also announced earlier this year, with that likely to push up demand still further.
However, the Aqaba and Hijaz railways are just two of the many transport infrastructure projects that the kingdom's authorities are currently looking at. Upgrading and expanding the road network has also been a priority, with this week bringing news of developments within the major al-Urdun road project.
This work, begun in 2000 and comprising five phases, has estimated costs totalling JD21m. On completion, the new road scheme is expected to accommodate 200,000 cars per day. This, it is hoped, will alleviate current congestion problems around Amman. The al-Urdun road will connect the capital city's downtown with the kingdom's northern cities, easing traffic on Queen Rania Road (University Road).
This week saw Greater Amman Municipality (GAM) announce that construction work on the Jubeiha-Abu Nuseir intersection - the third phase of the project - is almost finished, with the upper lane now open to traffic.
"The construction of the intersection is on schedule and GAM and the Ministry of Public Works and Housing are expected to complete al-Urdun Road by the end of the year," deputy Amman Mayor Abdul Raheem Boucai said on June 22.
More still needs to be done if the kingdom is to achieve its goal as a regional transport hub and take full advantage of its geographical position, which naturally makes it a regional corridor for land transportation - by rail or road. Yet the signs are that this is increasingly on the horizon, with the kingdom's trains - and trucks - now picking up speed.
