With guidance provided by MTBS(1), a new multi-purpose terminal concession under development in East Port Said, Egypt will see the country adopt a first of its kind operating model.
A concession signed by Sky Investments and Reliance with SCZone for a new Multi-Purpose Terminal in East Port Said, Egypt, heralds the introduction of the first terminal of this kind to be awarded on a whole terminal basis.
Sky Investments, in cooperation with Reliance, has signed a Concession Agreement with SCZone for the new Multi- Purpose Terminal (MPT) in East Port Said. This strategic deal aims to expand the port’s cargo services and increase the competitiveness of the service levels offered in East Port Said. For the development of this new terminal, featuring a 900m quay and landside area of 38 hectares, a total investment of USD65 million is to be implemented by the consortium.
Sky Investments is a private investment group, consisting of 12 subsidiaries and 7000 employees across four diversified industries, and has its core focus on the Egyptian market. Among its main subsidiaries is Sky Logistics which is specialised in providing integrated and customised logistics solutions including customs clearance, road transport and stevedoring activities.
Reliance is a group specialised in bulk commodity trading, logistics, mining & mineral supply, concrete ready mix production and shipping & waste management. As such, Reliance is well positioned in, among others, the Egyptian clinker and cement industries and thereby complements the strategic fit for the MPT.
The Egyptian Suez Canal Economic Zone Development Authority (SCZone) is the port authority of East Port Said (EPS). SCZone announced at COP27 multiple developments to expand the port’s cargo activities, including the new MPT. With the concession in place, the Consortium becomes the first private organisation in Egypt to operate their own entire MPT. This creates a paradigm shift in Egypt which has typically been characterised by practices whereby MPTs are operated by public organisations and only the stevedoring is performed by private companies.
It is Sky Logistics’ ambition to handle over five million tons of cargo in the near term, including, among others, coal, clinker, cement and scrap metals.
To align with SCZone’s green port ambitions, a package of measures have been adopted by the Consortium ranging from investing in electrical equipment and energy efficient LED lighting on the terminal to installing rooftop solar panels, performing waste separation and so forth.
During their study phase, the consortium was supported by Maritime & Transport Business Solutions (MTBS)(1) to conduct a fully-fledged feasibility study. The entire project took more than a year to complete, explains Dirk van Niekerk, manager at MTBS. The first part of the project focused on the market analysis in which the potential of the terminal was verified by determining the commodities with the most potential and originating a detailed forecast for each. This formed the foundation on which the financial feasibility and bankability of the terminal development was tested. A key area of analysis was identifying the competitive advantages the EPS MPT could offer to its clients for various cargo segments with this focus including:
- The ability to handle larger vessels due to the CD -18 metre depth alongside the quay.
- The superior vessel productivity, which is enabled thanks to investments in state-of-the-art vessel handling equipment and the benefits flowing from Sky Logistics operating its own terminal, and
- A location in the proximity of Egypt’s main production and consumption centres including Cairo, the 10th of Ramadan, the Sinai region and Sokhna.
Omar El-Badry, CEO, Sky Logistics, underlines his satisfaction with the concluded results: “Thanks to MTBS we were able to fine tune our investment planning with the aim of achieving our intended operational excellence as well as optimising the provisioned financials of the project.”
(1)MTBS is an international finance and strategy advisory firm, offering entrepreneurial business solutions to clients in the maritime and transport sector. Since the company was founded in 2005, MTBS has specialised in ports and terminals, and provides expertise in PPP transactions, strategy, valuation, institutional analysis, financing and economic analyses. The firm combines its market sector knowledge and state-of-the-art financial competences into one value proposition: “4P: innovative solutions for Port Public Private Partnerships”
