The Jordanian government will revamp the Aqaba railway network to meet a growing demand to transport phosphate shipments, according to an understanding reached between Aqaba Railway Corporation (ARC) and the Jordan Phosphate Mines Co. (JPMC).
JPMC transports its output both by train and trucks; however, the Aqaba Railway does not operate enough cars to sustain the company’s export shipments, while truck transportation is also not regularly available. JPMC is seeking government financing for the purchase of several new railway cars.
JPMC’s competitiveness is dependent on the efficiency of its land or maritime transport system. The system’s relatively high costs have adversely affected the flexibility of pricing phosphate at competitive global rates.
In 2000, transportation costs amounted to 11.4 million Jordanian dinars ($16 million), translated into JD 2.11 per ton of raw phosphate. It is therefore asserted that the privatization of the Port of Aqaba will also give an indirect boost to JPMC.
JPMC requires approximately eight railway cars to carry 18,000-20,000 tons of phosphate per day. The Aqaba railway presently operates five cars per day, only enough to carry 4,000-5,000 tons.
Transport Minister Nader Dahabi told Jordan Times that the government's move does not contravene with a previous deal reached with the Jordan Rail consortium. In August 1999, the consortium, including Wisconsin Central International, Mitsubishi Corporation, CCC Contractors and the Amman-based Kawar Group signed a 25-year concession agreement with the Jordanian government to manage, operate and expand the Aqaba railway network.
JPMC increased exports by seven percent to 2.5 million tons in the first nine months of this year as compared to the same period last year, reaching a total value of $96 million. Company sources anticipate exports would reach 3.5 million tons by the 2001-end.
The rise, said JPMC Director General Khalid Sheyyab, was fuelled by opening new markets, as well as by preserving traditional outlets. He added that there was a higher demand in the third quarter of this year with the trend expected to continue until the end of 2001. — (menareport.com)
© 2001 Mena Report (www.menareport.com )