THIRD NATIONAL COUNTERPART TEAMS (NCT3) Meeting
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1 EuroMed Regional Transportation Programme THIRD NATIONAL COUNTERPART TEAMS (NCT3) Meeting Brussels, June 1 & Blue Paper Part I Overview and Diagnosis of the MEDA Transport System (Core Factors Constraining the Development of the Regional Transport System) Presentation: Mr. Ali Anouti 1
2 Blue Paper - Part I Overall Structure and Organisation General Data and Statistics Maritime Shipping and Ports Civil Aviation and Airports 4 Road Transport 5 Rail Transport 6 Multimodal / Intermodal Transport Border-Crossing Issues Global Navigation Satellite System (GNSS) Major Findings and Core Problems 2
3 Blue Paper - Part I Section 1 1 General Data and Statistics 3
4 Section 1 General Data and Statistics Recapitulation of the key data and statistics that are necessary to provide a clear understanding of the characteristics of the regional transport system Some major items to be re-emphasised North-South trade comprises almost 50% (by value) of the total MEDA trade South-South comprises less than 7% (by value) of the total MEDA trade Maritime shipping is the predominant mode of transport in the region EU-MEDA Sea-borne trade is almost 77% by weight, and 54% by value 4
5 Blue Paper - Part I Section 2 2 Maritime Shipping and Ports 5
6 Section 2 - Maritime Shipping and Ports Regular Shipping and Short Sea Shipping International maritime shipping Public sector is involved in international shipping services in several countries Management and operations of public vessel fleets show low levels of efficiency. Shipping is liberalised in the region, but the private sector is generally not supported by the governments, and faces strong competition from foreign carriers Most vessel fleets are old and in a poor condition Short Sea Shipping (SSS) SSS might not be a feasible alternative to land transport for domestic trade or for trade within the same sub-region SSS might play a role in the future for trade between sub-regions, when borders are opened and free-trade becomes a reality 6
7 Section 2 - Maritime Shipping and Ports (Cont d) Port Structure Port organisation and management Centralisation of port management is a common phenomenon in the region Government intervention in Port Management exists in all countries Exceptions exist in the privately owned or managed ports in the region Port Operations and Services The level of liberalisation and PSP varies significantly between countries Fragmentation of handling services exists in some ports ( Larnaca & Casablanca) 7
8 Section 2 - Maritime Shipping and Ports (Cont d) Port Structure (cont d) Port ownership and financing Port infrastructure is, to a large extent, publicly owned and financed in the region. Previous PSP failures are due to unwillingness of governments to share risks or to unrealistic government demands. 8
9 Section 2 - Maritime Shipping and Ports (Cont d) Port Efficiency, Competition and Hub Ports Port costs At a sub-regional level, port costs are relatively similar between countries At a regional level, port costs in Maghreb countries are higher than other countries. Port efficiency Container terminals are managing to accommodate the current demands, but are operating at low levels of efficiency. Common causes include the insufficient availability of handling equipment, the suboptimal use of stacking areas and the long dwell times of containers. Dwell times of containers in ports have an average value of 15.3 days Dwell times in privately owned/managed ports (e.g. Ain Sokhna) reach 4-5 days 9
10 Section 2 - Maritime Shipping and Ports (Cont d) Port Efficiency, Competition and Hub Ports (cont d) Hub ports Shipping costs from EU to MEDA region can be significantly reduced by routing containers through a hub port rather than using direct scheduled shipping service. These practices are not as commonly used in the region as would be expected, possibly due to inactive attitude of freight forwarders There are few hubs in MEDA region, and other hubs in Northern Mediterranean It should be kept in mind that the region cannot sustain an infinite number of hubs 10
11 Section 2- Maritime Shipping and Ports (Cont d) Maritime Safety, Security and Environment Protection Joining of International Conventions All countries are members of IMO and have adopted its basic conventions Several important conventions have been neglected by several MEDA countries Implementation of the International Conventions Most countries do not, and cannot, properly perform their FSI/PSC duties This limits the efficiency of regional initiatives for PSC such as the MED MoU This resulted in placing all countries on Black List of Paris MoU (except Israel) Implementation of Security Codes (ISPS) Several ports are still gathering the necessary capacity and funds to fully deploy the required security and contingency plans Implementation of security plans on board vessels is often incomplete as ship-owners are not fully aware of the requirements of this recent code 11
12 Section 2- Maritime Shipping and Ports (Cont d) Maritime Safety, Security and Environment Protection (cont d) Vessel Traffic Systems (VTS) Syria and Algeria have not installed VTS Other countries have installed a VTS, but only at their major ports. Full coverage of national coastlines & territorial waters is lacking in all countries Waste Reception Facilities Syria and Lebanon have not installed such facilities yet Other countries have installed such facilities, but mainly at the major ports. The reception facilities are often lacking in secondary ports. 12
13 Section 2 - Maritime Shipping and Ports (Cont d) Port Infrastructure Water-Side Facilities These facilities (channels, berths, docks) are adequate in most ports in the region to accommodate current vessel demands Container Terminals Investments will likely be needed at some ports to handle the projected rapid growth in container traffic Enhancing the efficiency of existing facilities may delay the need for new ones (new equipment, optimising the use of stack yards, reducing dwell times, etc) Hinterland Connections Some port-road connections require maintenance or upgrading, while other links require extreme treatments including grade separation (e.g. Casablanca port) Some port-rail connections need maintenance or rehabilitation, and some strategic rail links connecting ports with centres of demand or production are missing Special Cases Some ports are heavily constrained by urban settlements (Rades and Algiers ports), and future expansion is not possible VTS Relocating some ports may be the only answer to meet future demands 13
14 Blue Paper - Part I Section 3 3 Civil Aviation and Airports 14
15 Section 3- Civil Aviation and Airports Market Access and Open Sky Policy Access to the Air Transport Market A single flag carrier exercises monopoly over the aviation market in Egypt, Jordan, Lebanon, Syria, Palestine and Tunisia In other countries, privately-owned national airlines exist but on a limited scale (one or two companies as a maximum, except for Turkey) Open Sky There are some regional efforts to liberalise international air traffic exchanges 8 MEDA countries are members of ACAC Programme (Arab Civil Aviation Commission programme for air transport liberalisation among Arab countries) Egypt is member of COMESA Programme (Common Market for Eastern and Southern Africa liberalisation programme) Algeria, Tunisia and potentially Morocco are members of Yamoussoukro Declaration for liberalising air transport across the entire African Continent Morocco, Jordan and Israel have negotiated bilateral open skies agreements with the United States (Algeria in final stages of negotiation). Agreements with the EU Lebanon has initialled a horizontal agreement with the EC to put existing bilateral air services agreements in conformity with the EU Law (horizontal mandate) Negotiations between EC and Morocco to negotiate a new global agreements are expected to start soon (vertical mandate). 15
16 Section 3 - Civil Aviation and Airports (Cont`d) Airport Structure Airport organisation and management Category 1 (Syria and Lebanon): airport regulator is also the airport manager Category 2 (Egypt, Jordan, Turkey): regulatory and management roles are separated, but management authority is placed under government control Category 3 (Israel, Morocco, Algeria, Tunisia): regulation and management roles are separated. Airport management authority is autonomous, but acts at a national level (centralisation) Malta and Cyprus (in the near future), regulation is undertaken by CAA and airports are owned and managed by joint stock companies. Airport Operations and Services PSP is common in catering, fuelling, duty free shops, parking garages, etc PSP in ground handling operations shows significant variation across the region Air traffic control, navigation and meteorological services are publicly-operated. 16
17 Section 3 - Civil Aviation and Airports (Cont`d) Airport Structure (cont d) Airport ownership and financing Airport infrastructure is, to a large extent, publicly owned/financed in the region Previous PSP failures are due to unwillingness of governments to share risks or to unrealistic government demands.. 17
18 Section 3 - Civil Aviation and Airports (Cont`d) Air Traffic Management All countries are taking solid steps, although at a different pace, to upgrade their ATM infrastructure and equipment, and to enhance ATM procedures and techniques. EMAC (Europe Middle-East Air Traffic Management Coordination) involves Cyprus, Lebanon, Syria, Jordan and Egypt. AEFMP Group involves Algeria, Spain, France, Morocco, Portugal Both initiatives provide only limited geographic coverage of the region. EMAC is suspended due to financial difficulties 18
19 Section 3 - Civil Aviation and Airports (Cont`d) Aviation Safety, Security and Environmental Protection All countries follow ICAO standards Some countries have undergone ICAO safety audits and have been certified on safety matters, while others are preparing for such audits that will take place in the future The adoption of JAA standards shows significant variation among countries Environmental air transport regulations vary considerably across the region 19
20 Section 3 - Civil Aviation and Airports (Cont`d) Airport Infrastructure Passenger Terminals Capacity and congestion problems exist at a large number of terminals Real cause is not related to the lack of physical infrastructure, but to heavy peaking (suboptimal slot allocation). Runaways and Taxiways Current systems at most airports seem adequate to meet aircraft demands for the short and medium terms. Some specific, but limited, improvements are required at some airports Special Cases Some airports are heavily constrained by urban settlements (Istanbul Airport) Expansion of such airports to meet future demands is difficult and might warrant relocation 20
21 Blue Paper - Part I Section 4 4 Road Transport 21
22 Section 4 - Road Transport Access to the Road Freight Transport Market Access to the market has been greatly liberalised in all countries The majority of trucking services in all countries is provided by the private sector. Licensing mechanisms Existing licensing mechanisms in most countries are sub-optimal. This results in low quality of companies, drivers and trucks, which threatens the economic dimension of transport, as well as safety & environmental aspects Market Structure The market is fragmented with numerous owner-drivers in the market who are not able to benefit from economies of scale This results in high operation costs and reduced profit margins, which promotes the deterioration of this industry (e.g. maintenance of vehicles is neglected) 22
23 Section 4 - Road Transport (Cont d) Regulation & Harmonisation of International Road Freight Industry International Road transport in the region is governed by numerous bilateral agreements There are some (sub) regional initiatives aimed at harmonising road freight transport Arab Transit Agreement promoted by the Arab Union of Land Transport ESCWA Agreement on the International Roads in the Arab Mashreq Agreement between Jordan, Syria and Lebanon on Vehicle Circulation Booklet Road Transport Agreement of the Arab Maghreb Union (AMU) All these agreements neglect fundamental aspects of international road transport International Conventions All countries are inactive with respect to ratifying UNECE conventions on road transport 23
24 Section 4 - Road Transport (Cont d) PPP in Road Construction and Maintenance There are no successful PPPs in the region in relation to construction of roads (except in Israel) Private investors are hesitant to invest in such projects Uncertainties regarding traffic volumes requirements to collect tolls in local currency impose exchange-rate risks Governments to willing to share risks and provide guarantees to private investors Road Maintenance All countries contract out maintenance to private sector using traditional contracts Jordan & Lebanon are considering the use performance contracts 24
25 Section 4 - Road Transport (Cont d) Road Sector Financing Motorway tolls Applied only in Morocco, Tunisia, Turkey, Egypt and Israel Some shortfalls exist in the system (e.g. tolls in Tunisia are insufficient to meet the maintenance needs, and in Turkey, collected tolls are returned to Treasury) Road Fund This concept exists only in Morocco for the national motorway system, and can be recognised as good practice The majority of countries manage their road networks based on funds from the General Government Budget The allocated amounts are usually insufficient to meet maintenance needs, resulting in substandard road networks. 25
26 Section 4 - Road Transport (Cont d) Infrastructure Condition of the Regional Road Network In general, there are no missing links in the regional road network A continuous highway system connecting all the region currently exists, with even a further link to the EU through Turkey At current, most problems of the regional road corridor relate to political, operational or capacity issues, rather than to inexistent links 26
27 Section 4 - Road Transport (Cont d) Road Safety In Year 2000, nearly lives were lost in road accidents in the MEDA region. In the majority of the MEDA countries, road safety remains a serious concern as the number of killed and injured has been on the rise The EU average is 0.23 persons killed per 1000 passenger cars while in the MEDA region the average is 2 (i.e. 8 to 10 times more). 27
28 Blue Paper - Part I Section 5 5 Rail Transport 28
29 Section 5 - Rail Transport Railway Reform and Liberalisation Group 1 (Egypt, Syria and Tunisia): limited independence of rail authorities, no legal framework to allow PSP, and no separation of infrastructure management from operations. Group 2 (Jordan) is at an intermediate stage as a restructuring programme is underway for the Aqaba rail network Group 3 (Morocco, Algeria, Israel, Turkey): infrastructure management and commercial operations separated, and legal framework allows PSP in rail operation and ownership. 29
30 Section 5 - Rail Transport (Cont d) Regulation and Harmonisation of International Rail Transport This issue is given very little attention by countries at the time being, due to the absence of regional rail links and traffic. Sub(regional) initiatives for harmonisation (ESCWA Agreement on International Rail, AMU Agreement on Rail Transport) are not adopted or not implemented. UNECE rail conventions have not been ratified by the majority of MEDA countries. 30
31 Section 5 - Rail Transport (Cont d) Infrastructure Condition of the Regional Rail Network There is no regional rail corridor that connects the region together from east to west. Regional rail links are often missing, deteriorated or outdated. At the sub-regional level, Maghreb countries have relatively developed and compatible network. Relatively well developed connections between Syria and Turkey also exist Studies demonstrate that The introduction of a railway corridor (with minimum engineering standards) spanning the entire region would be difficult to achieve Construction costs would be very high Revenues might not be sufficient to cover even operation and depreciation costs. This may be feasible only in long term when traffic levels are sufficiently mature 31
32 Blue Paper - Part I Section 6 6 Multimodal / Intermodal Transport 32
33 Section 6 - Multimodal / Intermodal Transport Transport Planning Practices Transport authorities often lack the capabilities and resources to prepare transport plans. Transport plans are not well coordinated among the various authorities at a national level Transport plans are hardly ever coordinated with those of neighbouring countries. The end result is an incoherent transport system, at both the national and regional levels 33
34 Section 6 - Multimodal / Intermodal Transport (Cont d) Mode Specific Problems Internal inefficiencies of transport modes increase the costs and durations of door-to-door multimodal/intermodal trips. Road transport suffers from fragmentation and lack of professionalism, etc Rail transport suffers from government control and from limited PSP, etc Maritime transport suffers from limited government support to private shipping companies, inability of authorities to perform their FSI/PSC duties, etc. Physical interfaces between the various transport legs are usually poor Road and rail connections to ports are often underdeveloped Dedicated rail terminals are often missing in ports 34
35 Section 6 - Multimodal / Intermodal Transport (Cont d) Transport Logistics Container share of maritime traffic in MEDA countries is significantly lower than the international and EU average rates (except for Cyprus, Malta and Israel) Transhipment practices and the use of hub ports are still low A standard legal framework for liability & insurance of multimodal carriers does not exist Logistics platforms (freight distribution centres, storage and warehousing areas, container consolidation and breaking centres, etc.) are often missing in the region 35
36 Section 6 - Multimodal / Intermodal Transport (Cont d) Electronic Data Interchange Technology The smooth flow of information across actors and across modes is very important in multimodal transport, and EDI is very beneficial in this respect. The use of this technology is not widely, or evenly, spread in the region. EDI is implemented in Egypt, Israel, Lebanon, Cyprus & Malta, but only at the major ports Even when EDI exists, it is sometimes not fully exploited, due to the general lack of computerisation or know-how among traders and agents 36
37 Blue Paper - Part I Section 7 7 Border-Crossing Issues 37
38 Section 7 - Border Crossing Issues Customs Procedures All countries (except Palestine) are members of WCO and UNCTAD. The actual implementation of best practices of these organisations varies highly across countries. Almost none of the countries adopts the Single Administrative Document (SAD) With respect to the automation, some kind of customs computer system exists in all countries (except Syria and Algeria s export system). However: Customs computer systems allow limited data sharing with other authorities Customs computer system in many countries (Morocco, Tunisia and Egypt) do not support risk analysis/management techniques Customs computer systems in many countries do not support EDI technology Concerning the application of risk management concepts: Cyprus, Malta and Turkey are successful in these applications Lebanon & Jordan still make a lot of inspections, despite using these applications ). In other countries, these applications are not supported by the computer system. Other administrative problems Personal presence of importer or forwarder for payment Truck convoy requirements Incompatible driving time zones or working hours between neighbour countries. One stop shops are not implemented in some countries 38
39 Section 7 - Border Crossing Issues (Cont d) Implementation of Conventions and Agreements Several UNECE conventions that have an impact on facilitating border crossing are largely neglected by countries (e.g. ATP, ADR) Transit agreements Egypt and Palestine are not members of TIR, and Algeria does not implement TIR The Arab Manifest is used instead of TIR, as Saudi Arabia is not member of TIR. This Manifest, however, does not propose financial guarantee throughout the trip Concerning the application of risk management concepts Cyprus, Malta and Turkey are successful in these applications Lebanon & Jordan still make a lot of inspections, despite using these applications ). In other countries, these applications are not supported by the computer system. Other administrative problems Personal presence of importer or forwarder for payment Truck convoy requirements Incompatible driving time zones or working hours between neighbour countries. One stop shops are not implemented in some countries 39
40 Section 7 - Border Crossing Issues (Cont d) Status of the Freight Forwarding Industry The freight forwarding industry in the region is relatively underdeveloped National freight forwarding associations, linked to FIATA, do not exist in some countries (Jordan, Palestine, Syria, Algeria, and Malta) Even where such associations exist, they do not necessarily have an active role (e.g. Lebanon, Tunisia and Morocco) In some countries, legislation does not allow freight forwarders to also be customs broker 40
41 Section 7 - Border Crossing Issues (Cont d) Infrastructure and Equipment at the Border Points Infrastructure/equipment at border points, particularly land borders, are often insufficient Offices for authorities, laboratories, warehouses, road approaches, etc Reliable power sources, reliable telecommunications services, scanners, etc 41
42 Blue Paper - Part I Section 8 8 Global Navigation Satellite System (GNSS) 42
43 Section 8 - Global Navigation Satellite System (GNSS) Satellite navigation is very useful in enhancing the efficiency, safety, security and environment protection of the transport sector, in all its modes. The EU is in the process of developing its own satellite system (GALILEO), which will be operational from 2008 onwards All countries share the interest to implement GNSS but at different levels Morocco, Algeria, Tunisia and Turkey have implemented, or will implement, RIM Stations to be able to use the services of EGNOS. Galileo Cooperation Office has been established in Egypt. 43
44 Blue Paper - Part I Section 9 9 Major Findings and Core Problems 44
45 Section 9 - Major Findings and Core Problems Cooperation on policies/regulations affecting international transport is insufficient. National policies impacting transport are not well adapted to the needs of the system Liberalisation in transport is progressing, but at a slow and uneven pace The mechanisms for financing transport investments are insufficient and vulnerable Ports do not fulfil enough their role as focal nodes in multimodal transport chains Air transport sector is organised under the traditional restrictive bilateral agreements International road haulage sector suffers from fragmentation and low professionalism The rail sector is subject to strong government controls and needs to be reformed Border-crossing & customs procedures are still cumbersome and time consuming Intermodal connections not enough developed (hinterland links multimodal platforms) Logistics & freight forwarding sectors have not yet evolved into fully-fledged industries. 45
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