Three wars in little more than four decades have left their mark on Port Said. Once the grand gateway to the Suez Canal, the port is now little more than a regional centre for Egypt's pervasive maritime bureaucracy and a one-stop shop for bargain-hunters seeking cheap consumer durables from Port Said's "free zone" outlets.

But the 21st century is just around the corner, and with it may come Port Said's rebirth and a future for northern Sinai.

Across the Suez canal at East Port Said - in an area which is known as Sharq el-Tafria, the eastern branch, because it lies astride the Port Said bypass of the canal to the east of Port Fuad - the government is creating Egypt's first port to be dredged, built, equipped and operated in partnership with foreign private sector companies.

East Port Said's container terminal will, it is hoped, be the hub port for the eastern Mediterranean and north Africa, luring shipping companies away from rival hubs in Greece, Malta and southern Italy.

Even the Suez Canal Authority, whose revenues fell last year, for the fourth year running, to $1.77bn, could benefit from the government's plans to bring private sector investment into the north-eastern part of the country.

The EŁ3bn ($880m) plan, according to consultants and industry specialists, is a tacit admission by the government that it has abandoned any hopes of modernising and expanding Alexandria port, through which passes 60 per cent of the country's imports; or of streamlining either Damietta in the delta, or Port Said itself, which handles 20 per cent of imports.

A new bulk cargo port at Ain el-Soukhna, in the Gulf of Suez, to be built in close co-operation with Egyptian private sector firms, also indicates the fact that the government has finally given up on trying to modernise Suez and Port Tewfik, at the southern end of the canal.

Entrenched vested interests, notably in the customs, have made these ports, in particular Alexandria, a byword for corruption and inefficiency, where unloading and clearing goods can take between two and six times as long as ports in Europe or Asia.

"Mafia-types are typical of all ports," says one western embassy consultant. "But an entirely new port is less likely to be diverted by vested interests. The government is hoping that success at East Port Said will stimulate expansion at all ports and so encourage Alexandria and the others to reform themselves."

According to consultants, the success or failure of East Port Said container terminal will hinge on the speed and quality of operations, and on the nature of the partnership between the international operator and the three Egyptian public sector entities with which the operator is required to set up a joint-venture.

Two companies, P&O Ports of Australia and ECT International of the Netherlands, have bid to equip and to operate the terminal. The client, the maritime division of the transport ministry, is expected to award the concession within the next two months.

Four companies have already started work on the $210m two-year contract to build the breakwaters and dredge the harbour basin. The dredging, according to Pierre Tison, project manager for Belgium's Jan de Nul, involves digging the harbour basin to a depth of 20 metres and clearing channels 10km out into the sea and 6km into low-lying soft desert.

Next to East Port Said will lie industrial and residential zones, to employ and house nearly 1m workers and their families, more than twice today's population of the Port Said area.

A road tunnel 3km long is to be built 20km to the south of Port Said, linking East Port Said in Sinai with the rest of Egypt on the western side of the canal.

The tunnel, along with a road bridge near Qantara, a railway link and, possibly, a new airport, could revitalise the economy of the whole area. Further south, beyond the desolate landscape of Suez and Port Tewfik, past the rotting hulls of half-submerged wrecks at the old naval base of Adabaia, is being built the new industrial zone and bulk cargo port at Ain el-Soukhna.

The main purpose of the port will be to serve the new Suez industrial zone, where four groups of Egyptian investors have already been allocated land for industrial and residential development.

Energy for the zone will be provided by City Gas, one of the four new private sector consortia bringing Egypt's abundant natural gas reserves to future industries.


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