Dry Port of 6th of October PPP

Dry Port of 6th of October PPP

Egypt

Freight and containerised traffic in Egyptian ports has shown robust growth in recent years and this trend is expected to continue. To cope with this booming market, there is a need for an Inland Customs Clearance Depot (“ICCD”) to debottleneck the various ports on the Mediterranean and Red Seas. The 6th of October Dry Port Project (“DP6” or the “Project”) is Egypt’s first inland port project, based 20km SW of 6th of October City, in the Giza Governorate of Egypt. DP6 is an important part of the development of the National Transport and Logistics Strategy of Egypt. The Project grantor, the General Authority for Land and Dry Port (“GALDP”, “Grantor” or “Authority”), has allocated a site of 400 feddan, with 100 feddan allocated for the Project.

Service Offering
With a direct rail connection to the Greater Port of Alexandria (“GPA”) container ports (Port of Alexandria and Port of El Dekheila), DP6 will function as an ICCD for containers imported through the various ports in the north of Egypt whilst also servicing both 6th of October City and the Greater Cairo region. A 24-hour operations dry port with a design capacity of 720 TEU per day, DP6 will open with a capacity of 360 TEU per day, and will expand as the existing rail infrastructure servicing the Project is upgraded (see right). It is envisaged the tender will be for the full three phases.

The project will construct the largest logistics center within the Cairo region, occupying nearly 400 acres of land. The site overlooks the Wahat highway near its intersection with the regional ring road of the Eastern Cairo region (currently under construction). The center will include 13 specialized zones to receive and store containers and liquid and dry bulk cargo. In addition, the center will include multipurpose storage warehouses, an administrative area and customs offices.

Milestones
Construction is estimated to take two years; the first concession period will be 30 years, after which the Project can be retendered to the private sector or operated directly by the Authority. Memorandums of Understanding (“MoUs”) have been signed with key stakeholders of DP6.

Commercial Matters
The project has an estimated capital expenditure of US$100m, and will be tendered as a Design, Build, Finance, Maintain and Utilize under Egyptian Public-Private Partnership (“PPP”) law. DP6 construction is split into two parts: (i) port infrastructure, and (ii) port superstructure. The Private Sector Participant (“PSP”) will develop both parts. The Project’s commercial structure will be via a Special Purpose Vehicle (“SPV”), which will be established by the PSP in the PPP tender, solely for the purpose of carrying out the Project. The Project will be denominated in USD (the expected revenue currency). Tariffs are to be pre-agreed by the PSP and DP6 customers will remunerate the PSP directly through end-user payments. A revenue sharing mechanism will also be agreed between the PSP and the Authority.

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