swot analysis of road transport sector in the arab region

SWOT Analysis of Road Transport Sector in The Arab

Region

Alexandria , 4 November 2012

Prof. Dr. Ismail Abdel Ghaffar Ismail FaragPresident , AASTMT

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Presentation Outline

IntroductionRegional legislations and agreementsTransport for sustainable development in the Arab RegionInsights on Roads and Road Transport in EGYPTSWOT Analysis in Arab Region

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1 .Introduction

1.1 Regional Trade: Intra - Arab Trade

Total intra-Arab trade witnessed an overall increase over the period 1996-2010, equivalent to around

302% .

The increase in the value of trade in transport services is due to the soaring logistics costs in the international arena that are correlated with the price of fuel exports.

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1.2 National Transport Strategy

Develop a comprehensive transport Master Plan inclusive of various transport modes and related infrastructure.

Emphasize safety, the integration of environmental considerations, and inter‐modality.

Develop a regulatory framework through institutional building and organizational re‐structuring

Assess financing strategies with a focus on the participation of the private sector.Strengthen and develop better asset management procedures.

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1.3 Road Transport Infrastructure and

Capacity Utilization

Egypt’s road network comprises 91,173 kilometers of roads, divided into 67,728 of main roads and 23,445 kilometers of

artery roads .

85% of domestic freight and 60% of passenger movement is carried out by road. By mid-2010, the roads network expanded to 81,932 km of paved roads.

There is currently no logistics provider in Egypt with a consistent distribution infrastructure

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There is also a lack of services around road based transportation.

If a network of transit points and connection links were established, an estimated 86 million tons per year (16% of internal freight moved by road) would pass through it.

To meet projected usage, Egypt’s roads will require an additional 11.4 million square meters and a total investment of USD 8 billion over the next five to ten years.

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Major Traits of Transport Infrastructure

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Logistics Performance Index (LPI) in Arab Countries

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2 .Regional Legislations and Agreements

2.1 Regional Policy Centers on Transport

Major transport policy centers in the Arab world include primarily:

The UN-ESCWA

The Organization of Islamic Conferences

The League of Arab States (which created the Council of Arab Ministers of Transport)

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2.2 UNECE Transport Agreements and Conventions in the Arab World

The United Nations Economic Commission for Europe (UNECE) Inland Transport Committee created the framework for intergovernmental cooperation to facilitate international transport along with improving its safety and its environmental performance.

The UNECE conventions on transport are concerned with issues of transport infrastructure, road traffic and road signs and signals, road vehicles, legal instruments related to road transport, inland water transport, border crossing facilitation, transit by road, transport of dangerous goods and transport of perishable food stuffs.

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The Status of the UNECE Transport Agreements and Conventions in the Arab World (2009)

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The Status of the UNECE Transport Agreements and Conventions in the Cont. )) Arab World

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3 .Transport for Sustainable Development in the Arab

Region: Measures, Progress Achieved, Challenges and

Policy Framework

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4 .Insights on Roads and Road Transport in EGYPT

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4.1 Road Transport Network in Egypt

key points within a well-planned and sustainable :road transport system

•Promoting the use of public transport•Vehicle emissions testing and tuning

•Replacing old cars with new ones•ADOPTING ADVANCED TRANSPORT TECHNOLOGIES

•Electric vehicles

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4.1 Road Transport Network in Egypt ( Cont. )

Roads constitute the dominant means of internal transportation for both passenger and freight operations .

Egypt has 52,000 km of paved roads, in addition to a network of bridges .

The number of passengers increased as well as cargo transport, reaching 46,288 million tons/km during the year 2007/08.

The number of vehicles registered in Egypt has almost doubled over the last ten years, reaching almost 6.6 million

in 2005 .About 50 per cent of the total vehicles were registered in the Cairo metropolitan area.

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The Numbers of Licenses Vehicles by Types from 2005 up to end of December 2010 in EGYPT

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The Numbers of Licenses Vehicles by Types and Governorate up to end of December 2010 in EGYPT:

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4.2 Operational and Legal Loads of Trucks in Egypt

•The load on the single front axle calculated by 7 tons and single rear by 13 tons, that rides 4 rubber tires.

•The load on the single front axle of the trailer calculated by 13 tons, that rides the 4 rubber tires.

•Equivalent load is calculated on the dual narrow axis by 20 tons and riding on the condition that each axis contains 4 rubber tires that the distance between the

axes less than 2 meters .

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4.2 Operational and Legal Loads of Trucks in Egypt ( Cont. )

Equivalent load is calculated on the wide axis by 13 tons per axle and riding on the condition that each axis contains 4 rubber tires.

•Equivalent load is calculated on the trio narrow axis by 30 tons and riding on the condition that each axis has 4 rubber tires.

•The load of cargo transported could exceed the range of 5% to overcome the problem of different weights and packaging.

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4.2 Operational and Legal Loads of Trucks in Egypt ( Cont. )

The length of the vehicle must not exceed the specified lengths:

Vehicle with two or more axes is not more than 12 meters.Vehicle with the joint (Simi Trailer) or more is not more than

17 meters in accordance with the new traffic law.Vehicles with a regular trailer no more than 20 meters.

The height of the vehicle including the shipment height must not exceed 4 meters from the road surface and the distance between the bottom of the vehicle and the road surface must be 28 cm or more.

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4.3 Road Sector Strategy

Develop, construct and maintain an efficient, safe, well managed network of intercity freeways in order to:

Support the rapid pace of economic development by providing access to new development areas (industrial, agriculture, and residential).

Accommodate the growth in population and social demands.

Prioritize infrastructure projects in view of the above demands.

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4.4 Reform Policies in the Road Sector

Improve design and construction practices through the use of Performance Based Contracts (World Bank project support).

Develop an integrated action plan for road safety. (Twining project with the European Union‐ Germany and Austria)

Introduce a transparent regulatory process for the issuing of “Transport Operator Licenses” for both freight and passenger, granting access by the Private Sector to the land transport profession.

Develop regional border crossing (TIR‐under study), and upgrading the corridors specifications under the UNESCWA agreement.

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4.5 Twinning Project in Road Safety

The project aims at enhancing road safety in Egypt through the reform of road safety planning and operations. It covers areas including:

Coordinate National Road Safety Activities

Legislative Reforms when applicable

Institutional Development and Capacity Building

Establish a road safety audit system

Improve standardsCoordinate information W.R.T. road accident database

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4.6 Road Infrastructure Investment

Egypt raised road construction investments from US$73.3 million in 2003 to about US$366.3 million

in 2008 .

In addition, it raised road maintenance investments from US$36.6 million in 2003 to about US$146.5

million in 2008 .

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4.7 Salaries in Transportation Sector

An average worker in the transport sector cannot achieve the average expenditure upon his or her family.

The annual salary of a worker in the private transport sector represents just 71% of the average annual income of an Egyptian family living in a city, while it represents 39.3% if the worker is employed in the private sector.

The salaries level explains the reason of vast immigration of skilled workforce to other Arabian countries.

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5 .SWOT analysis in Arab Region

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Strengths . High imports/exports rate

.Competitive costs

Long road network between major cities and villages

High percentage of freight and passengers transported by road

.Cheap workforce

.Positive business climate

.Developed road infrastructure

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Weaknesses

Unprofitable road transport sectorLow salaries for the skilled workersPoor road safety record Poor road infrastructure and links Between Arab countriesLack of skilled and trained laborBad working condition and long working hours No laws and regulations protecting workforceInadequate implementation mechanism Complexity of laws and regulations or Judicial framework related to road transport

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Weaknesses( Cont.)

Lack of road monitoring (enforcement of road laws and punishment application)Lack of pedestrian regulationsLack of efficient specialized courtsLow level of integration with other modes of transport (rail, river, sea)Poor Multimodal Traffic network

CorruptionHigh Cost of capitalLack and inaccuracy of industry data

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Weaknesses( Cont.)

Culture of family enterprisesLack of professional managementLittle openness to outside equity partnersLittle understanding of global competitionLack of long term financingInsufficient road transport companies (public or private)

Lack of co-ordination between road companies and ministry of transportRecruitment of unskilled candidates

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Weaknesses( Cont.)

Lack of road signs (directions, limitations…etc.)Trucks overload

Improper loading and lashingTrucks bad technical conditionsNo counter measureIrregular road maintenance

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Opportunities

Growing national/neighbouring economySufficient technical expertiseSufficient knowledge and access to know-howCheap energy

Sufficient environmentally friendly energy supplies (natural gas and scholar energy)Large manpower reservoir

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Opportunities( Cont.)

Well equipped free zonesDeveloped banks’ servicesPositive business EnvironmentPrivatization of enterprisesGrowth of SMEs

Development of private infrastructures

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Threats

Poor economyUnsupportive/combative regimeHigh taxation levelsUnstable local and regional political situationInsufficient free trade movements within the Arab and African regionNo unified Arab or African road regulationsNo system for transport/logistics operations developments

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Threats( Cont. )

No liberalisation of trade (some treaties not activated)

Inadequate institutional and regulatory framesInsufficient fundingUnemployment and social unrestLack of transparency and corporate governance

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Threats( Cont. )

Delays in implementation of necessary infrastructuresRecent increase in crime ratesIncreased number of permanent disabilities that reduce productivity (productive age groups)Increased social spending on repair rather than improvement and developmentLack of data base and analysis of accident reporting (road crash database).Lack of school and parents education to create the awareness of traffic safety rules and importance.Poor emergency call system.

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Priority Training Needs Which Might Arise from the SWOT:

To up skill existing workforce

To train young nationals (Male/female)

To recognise needs for additional training

To organise training at lower levels

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