The historic train line linking the UAE and Israel among new infrastructure projects

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The historic train line linking the UAE and Israel is among several agreed infrastructure projects following the Abraham Accords in 2020. The two countries seek to forge closer relations, with the line set to allow Israel to access new markets in the UAE, eventually carrying passengers from the Mediterranean to the Gulf. 

A historic re-opening to a historic line connecting Dubai and Haifa

At one time in the past it was possible to take the Hejaz Rail Line from Medina in Saudi Arabia to Damascus, and then onward to Haifa. After the establishment of the State of Israel however, this stopped, but based on comments made at Expo 2020 in Dubai from Merav Michaeli, Israel’s Minister of Transportation and Road Safety, the Al-Marj Train, built on the historic Hejaz line, may soon be running again. According to Michaeli, a train out towards Jordan, Saudi Arabia and the Gulf states, from Dubai to Haifa, is one of several big infrastructure projects being discussed between the UAE and Israel to build better relations and increase co-operation.

A sign of improving relations

The joint infrastructure projects are a sign of improving relations between the two countries which have had strained relations in the past. Israel was called ‘The Enemy’ by the first president of the United Arab Emirates, and there was another rocky period following the assassination of Mahmoud Al-Mabhouh in 2010. In recent years though, the relationship has taken a big step forward with the signing of the Abraham Accords in 2020, the first public statement normalizing relations between an Arab country and Israel since that of Jordan in 1994, and the establishment of diplomatic embassies in Abu Dhabi and Tel Aviv. More than 50 agreements have now been signed between the two nations in diverse sectors, including the train line from Haifa to Dubai.

The Al-Marj train line in Israel, connecting the towns of Haifa and Beit She’an re-opened in Israel in 2016, connecting the Jordan River Crossing, Jalamah, and the Jenin area in the West Bank. The idea was that it could be extended towards Saudi Arabia and the gulf. Eventually, it would link Haifa to Dubai. As far as infrastructure projects are concerned, this is a relatively easy one to start with as the tracks needed for the rail connection are nearly all in place. With the exception of 200-300 kilometers of line that remains to be built in Jordan, the line is ready to connect the UAE and Israel.

Benefits for everyone involved

Once all the tracks are in place, goods from Israel can be transported to the UAE within a couple of days, rather than the approximately 12 days it currently takes when shipping along the Suez Canal. It will also allow Israeli producers to access new markets – fresh vegetables in particular are in demand in the UAE.

The project, backed by the United States, will also benefit the economy of Jordan. Jordan is in desperate need of an economic boost, with unemployment on the rise and reaching 25% in 2021, with youth unemployment rates reaching an unprecedented 48.1%. Both the employment created by the building of the infrastructure for the rail line, and revenue from the long-term operation of the line will inject much-needed funding to the country.

Egypt watches with wary eyes

Not everyone in the region is excited about a possible new railway line between Israel and the UAE. In Egypt, where Suez Canal revenue is the third largest source of national income, representing 10% of the GDP and an important source of hard currency, a land passage between Israel and the Gulf states is not welcome news. Nor are reports that the UAE intends to buy Haifa Port in Israel, leading Egyptian economists to talk about the upcoming impact on Egypt’s economy from the two states forging closer relations.

While the agreement is a big step, there are still many challenges before the line becomes operational. Nonetheless, the prospect of rail travel from Abu Dhabi to Israel leads to the question: Will Israeli passengers be able to travel to Abu Dhabi by train, like they could on the famous Hejaz Rail Line back in the time of the Ottoman Turks? According to the ministry, the network will one day be able to transport passengers from the Mediterranean to the east, and between the Gulf states, Saudi Arabia and Iraq to the west. Perhaps in time, after the successful launch of rail transit of containers between Dubai and Israel via Jordan and Saudi Arabia, passengers will be a possibility again.

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Transmashholding’s African Adventure

Comments (0) Africa, Business, Transport

Andrey Bokarev’s railway machine manufacturing company, Transmashholding, acquires its First Factory in Africa as the Continent Seeks to Revitalise its Railway Systems and Trains

With Africa, the second-fastest-growing continent from an economic perspective, development of efficient and cost-effective transport and logistics infrastructure are of paramount importance. The continent is not only rich in resources but is also fast developing as a robust manufacturing centre. The challenge for these economies is to ensure swift transport of containers and goods to the various African ports and onto global markets. 

Rail transport is at the forefront of any logistics development and recent years have seen increased investment and new initiatives. And with the planned Africa Integrated High-Speed Network – part of the Agenda 2063 Continent Development Plan – gathering steam, almost every African country is now looking to invest, or seek investment, in improving their railway infrastructure and stock.

The Real Way Forward is the Railway

The main hurdle facing these plans is that existing railways systems, mainly dating from the colonial era, are often in poor states of repair or the routes are unsuitable for future plans. The latter of these factors is mainly due to colonial planners usually using the shortest or quickest routes rather than ones which brought benefits to the country as a whole. Another long-range hurdle to continental integration is the fact that there are at least six different gauges in use. 

The inauguration of Transmashholding’s (as TMH Africa here) first African factory in April of 2019 illustrates the Russia-based conglomerates’ commitment to expansion and investment across Africa and Company’s president Andrey Bokarev business talent (a few months after a €1bn five-year contract between Egyptian National Railways and Transmashholding-Hungary  were signed in 2018.) The 45,000m² plant, situated in Boksburg, Gauteng, has been producing rolling stock since 1911, thus allowing TMH Africa to hit the ground running with an existing facility and workforce. 

The South African factory marks stage one of TMH International’s planned investment in Africa of over $32 million, and initial plans at Boksburg include the upgrading of the factory and machinery as well as retraining and upskilling of current employees.

TMH Enters the South African Train Market

It is also worth noting that Gauteng Province is the location of the Tambo Springs Project, a greenfield transport hub comprising road, air, and rail, and valued at $15 billion. There is also the planned container terminal at Ekurhuleni, some 20km from the new TMH International facility. 

South Africa is now the leading country in Africa for rail freight – at 99.5Mt a kilometre – and the map below shows not only how intensive the African Union’s plans for developing transport infrastructure is, but also how central to that plan South Africa is. 

Jerome Boyet, CEO of TMH Africa, sees the company’s role in Africa as being a local partner with local and global manufacturing companies seeking to fulfil orders across Africa as well as producing their own rolling stock. As Boyet pointed out, a large part of their decision to choose this location was based on: “…our understanding that South Africa’s real potential to become a leader in rolling stock manufacturing for Africa remains untapped.”

With continued economic growth and inward investment to transport systems across the continent, most observers would agree that TMH Africa’s investment is one with long term promise.

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Transmashholding Signs Major Egyptian Deal

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Summary: The deal between Egyptian National Railways and Transmashholding-Hungary Kft. looks like being the start of a long and fruitful relationship.

When Egypt’s first railway system was commissioned by the Regent of Egypt and Sudan, Abbas I, in 1851, he chose for it to be built by one of the 19th Century’s greatest engineers, Robert Stephenson. The vision was that Egypt’s transport system would rival the best transport systems globally.

Sadly, after many years of poor maintenance and management, Egypt’s rail system has in the last few decades become known as one of the world’s most dangerous. This has led to the Egyptian government making the decision to revitalise the entire infrastructure and rolling stock as well as investing in new routes. This was an important decision, not only in terms of improving safety but also in terms of economic development. Egypt’s rail network not only transports some 1.4 million passengers a day but is also a vital component in goods and container transport, especially when you consider that Egypt has the highest container traffic in Africa with almost 7 million units shipped annually. As most of this traffic passes through the Suez Canal, increasing rail capacity would help the country diversify its commercial transport networks.

1,300 passenger cars in 5 years with ENR Worth Over 1 Billion Euros

The announcement in September 2018 that Egyptian National Railways (ENR) had signed a contract with Transmashholding-Hungary Kft. (a Russian-Hungarian consortium) to produce and deliver 1,300 passenger cars represents a major part of the Egyptian government’s plans. Worth in excess of 1 billion Euros, the contract is for five years from the date of signing. Such a deal is also based on the close economic links between Egypt and Russia, and the choice of Transmashholding is no coincidence: the company led by an influential Russian businessman, Andrey Bokarev, is a world leader in railway manufacturing.

Transmashholding-Hungary Kft.’s production of the rolling stock represents a major part of Egypt’s planned investment in their railway systems, with over 3 billion Euros of total investment already announced. It is also the largest single contract ever agreed by Egyptian National Railways (ENR). Transmashholding-Hungary Kft. beat bids from companies from several other countries, including China, India, and Italy.

Production of the five different classes of passenger car will be split equally between the Hungarian side of the consortium, Dunakeszi Jarmujavito Kft., and the Tver Carriage Works in North-western Russia, which is owned by Transmashholding.Final assembly and fitting of the rolling stock will take place at a specially created plant in Egypt which will be a partnership between TMH International AG (part of JSC Transmashholding) and the National Organization for Military Production in the Arab Republic of Egypt. The plant will also enable maintenance of the new passenger cars.

A radical change for Egypt

Martin Vaujour, CEO of TMH International said: “This move could mean a radical change for the country because Egypt, despite being a very large country, has not really developed any railway industry at all.”

Even with such a massive project just signed, Transmashholding-Hungary Kft. is already looking to the future with plans to improve the connectivity of, and invest in, Cairo’s metro system which carries 4 million passengers per day. They are also looking at the potential of suburban trains for future projects.

With this initial contract signed at the beginning of Egypt’s redevelopment of their railway infrastructure and stock, future projects and involvement look promising for the Transmashholding-Hungary Kft. consortium.

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Angola looks to hydropower, shipyards to boost its economy

Comments (0) Featured, Transport

A major shipbuilding company based in the Middle East has forged a partnership to bring a shipyard, naval vessels and hydropower to Angola. Privinvest announced the launch of a major shipbuilding and maritime development project with the Republic of Angola in early September. The agreement builds on a previous pact to develop hydrokinetic power in the southern African nation. Both efforts are to be joint ventures of the government and Privinvest.

Under the latest agreement, Privinvest will provide a range of ships of the Angolan Navy. At the same time, the company will work with the British firm Simportex to develop and operate a shipyard in Angola. The modern shipyard will be able to build and service ships. In addition to supplying ships, Privinvest will provide state of the art technology to enable future construction of naval vessels in Angola.

“This marks a step in cooperation with one of the most dynamic economies in Africa,” Boulos Hankach, President of Shipbuilding Investments at Privinvest, said. “It shows that we have the skills and capabilities to promote high-level programs in countries around the world.”

Projects to generate 9,000 megawatts

In July, the government of Angola and Privinvest signed an agreement to bring hydrokinetic power generation to the country over the next 10 years. Angola wants to be able to generate 9,000 megawatts of power by 2025, with much of it coming from the capture of energy from water flows. The project will initially develop three test sites with a total expected output of 12 megawatts or more. The first site is expected to be operational next year. Privinvest will build hydrokinetic turbines and develop hydro-energy fields under the agreement. The Angolan public utility Prodel has agreed to buy all of the electrical output of the venture.

Joao Baptista Borges, Angolan minister of energy and water, noted that the country is a major source of untapped hydropower. With the introduction of new technology, it will be possible to produce low-cost energy for rural areas of Angola with the goal of providing access to energy to more than 14 million residents in the next decade.

Company based in Lebanon

Privinvest, based in Lebanon, has shipyards and other facilities in the Mediterranean region, the Arabian Gulf, France, Germany and the United Kingdom. The company was founded and is led by Iskander and Akram Safa, two French brothers of Lebanese descent.

Long a global leader in shipbuilding, the company designs and manufactures naval and commercial vessels as well as luxury yachts worldwide. Privinvest also provides technology and training to countries that want to develop their shipbuilding industry along with logistical support and supply management, training and supply management services for navel fleets.

Privinvest said its shipyards have produced more than 2,000 vessels and more than 40 navies use its ships globally. Currently, the company is working with six national navies in addition to private customers.

The company began working in hydrokinetic power in 2012 with affiliates that manufacture turbines for use both in rivers and at sea.

Angola hurt by oil slump

Angola, meanwhile, is under pressure to diversify its economy. As the second-largest oil producer in Africa, the nation has been hard it by falling crude prices. Last year, the World Bank agreed to give the country $650 million in financial support – a loan of $450 million and guarantees amounting to $200 million – to help stabilize its economy, the first such aid to Angola since 2010. Even with the aid, the government was forced to cut its budget by 25 percent while its currency lost 15 percent against the dollar. Nonetheless, growth in the country’s gross domestic product was nearly 5 percent in 2014.

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Prosperous brand new african car market 

Comments (0) Africa, Featured, Transport

Second-hand cars have been winding their way to African markets for many years. A road trip from Europe West Africa to sell your used vehicle has long been synonimous with both adventure and profits. It has remained uite easyt to find major export-import enterprises that will whisk your used car away to Africa.

Motorization ripe to take off across Africa

In addition to European car makers both North America and the Far East send second-hand vehicles to the continent en masse. The market is thoroughly established today: according to the consulting cabinet Deloitte an overwhlming majority of the 42.5 million vehicles on use on African roads today come from second-hand exports. This trend is likely to increase. Africa is the least motorized region on the planet with only 44 registered vehicles per 1000 inhabitants. The global average on world scale stands at 180 vehicles per 1000 which paves the way for tremendous growth of African market in the future. Demand for used cars is soaring due to an emerging African middle class and an improving economic climate.

Nigeria takes the lead

Nigeria is the biggest car market in Africa, and is also one of the most affluent in the Sub-Saharan region. The country boasts a population of over 140 million with approximately 40 million currently belonging to the rapidly emerging middle class. While new car sales are slowly picking up across the country, used sales still best those of new vehicles by a ratio of 4:1. In Nigeria, car ownership is seen as aspirational, whereas in the western world only new, high end cars represent a genuine status symbol. However for the burgeoning Nigerian middle class, car ownership itself is a highly coveted distinction. While the highly affluent will choose to buy new cars, Nigeria’s used car market is expected to grow for the foreseeable future.

Grey market evolves in Benin to meet Nigerian demand

Benin has dramatically benefited from the of Nigeria car market when Nigeria places high tariffs on the importation of used vehicles far above that of Benin. However this loophole is soon likely to close given that both Benin and Nigeria are working on a single import tariff for the block. Similar to Nigeria, Kenya has a large population and an emerging middle class. Citizens have been readily buying used cars, aided by the country’s strong banking sector that offers attractive lines of credit. In 2015 used cars outsold new cars by a ratio of 5:1, and according to forecasts this ratio is expected to be maintained for many years.

Kenya, Uganda and Tanzania look towards Japan for quality used vehicles

Japan has a strong record of car export, driven by tight environmental regulations and high service costs that incentivise any citizens to sell their car merely after few years. Japanese models such as Toyota and Nissan are fanatically popular across Africa due to reliability, strong 4×4 models, fuel economy and comparatively cheap repairs.

Many of Kenya’s neighbors such as Uganda and Tanzania are also seeing a surge in the second-hand car market. Given that Kenya has the largest port in East Africa it is likely to become the main import hub for Japanese second-hand cars, creating jobs and businesses throughout the region. Ultimately, apart from South Africa and the North African countries the rest of the continent is going to fce with a major increase in demand for second-hand cars over the coming years as economic conditions keep improving. Some estimates suggest that by 2030 car ownership will more than double to reach a healthy number of 90 million registered vehicles.

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