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The assessment of operation contracts of new ports (Port Said and North El Sokhna) – (April 2003)

The entity that carried out the study

The Maritime Research and Consultations Center affiliated to the Maritime Transport Sector – Arab Academy for Science, Technology and Maritime Transport.

The objective of the study

The creation of an economic and marketing atmosphere capable of attracting world and experienced companies in the field of ports and terminals operation. Urging the establishment of companies with experience and conditions complying with the international standards and helping these companies to enter the competition field through tendering the operation of North El Sokhna and East Port Said to world companies with B.O.T system.

Results

  • The study revealed the inconsistency between the existing container companies and North El Sokhna and Suez Canal Container Terminal companies with regard to both the privileges provided or obligations required in each of these companies; for a number of reasons namely (the absence of contracts or separate legal formulas governing the relation between the three container companies and port authorities).
  • The inconsistency in the relation between port authorities, world companies and concession agreements companies.
  • It is not easy to achieve the consistency between Suez Canal Container Terminal and Alexandria Container Terminal as 95% of the volume of containers handled in Alexandria container terminal is local (20L.E) while 10L.E /40 ft. container and 5 L.E/ 20 ft. container are collected for transit containers. The taxes payments item in Alexandria Container Terminal is much higher than its counterpart in Port Said and Damietta terminals.
  • The inconsistency between the obligations of Port Said Container and Cargo Handling Company and the obligations of El Sokhna Development Company whether with regard to tax treatment or chartering rate.

Recommendations

  • Translate the licenses provided by the operation contacts concluded between the three container companies and port authorities and that define the obligations and responsibilities of each party.
  • The study proposes that the existing container companies take the necessary procedures to operate according to Law 159/1981 and the Investment Law no.8/1997 in order to gain the same privileges provided to new companies as well as concluding new contracts with port authorities based on the same elements of contracts concluded with Suez Canal Container Terminal and North El Sokhna Development Company.