Saturday, 11 January 2014

GCC plans shared water network


Across the Middle East and North Africa, ensuring a reliable supply of water is a top priority, as demand soars from both rapidly growing populations and water-intensive industries in the world’s most water‑scarce region.



Desalination plant



By Peter Feuilherade


This article was first published in The Middle East magazine, London, December 2013 issue
 
 
Across the Middle East and North Africa, ensuring a reliable supply of water is a top priority, as demand soars from both rapidly growing populations and water-intensive industries in the world’s most water‑scarce region.

Figures from the World Bank in 2012 showed a decline in per capita renewable water resources from over 3,000 cubic metres/year in the 1950s to around 715 in 2011, which is below the World Health Organization's water poverty threshold of 1,000 cubic metres/year per capita.

The projected impacts of climate change on future water availability in the MENA region are not favourable, with some countries expected to experience up to 40% decreases in precipitation and runoff by the end of the 21st century. "Ever-increasing water demand - coupled with rapid population and economic growth - will likely add to the region’s water stress and pose serious challenges to the region’s future development prospects," the World Bank argues.

The rate of water extraction is also far greater than natural replenishment. The Abu Dhabi‑based Arab Water Academy estimates the collective water shortage of 17 Arab countries at over 30 billion cubic metres, a deficit which is expected to triple by 2030 and increase to over 150 billion cubic metres by 2050.

The Gulf Cooperation Council (GCC) intends to complete a common regional water network by 2020, as part of efforts to address rising population growth in the Gulf region over the next three decades,

Four of the six GCC states - Bahrain, Qatar, Kuwait and Saudi Arabia - are ranked as the most heavily affected by water scarcity in the world. According to the global management consulting firm Booz & Company, Saudi Arabia and the UAE respectively consume 91% and 83% more water per capita than the global average, while Qatar and Oman also use more than the global average.

However, the GCC countries, in the words of a recent report by the Oxford Business Group (OBG), "are in the unique position of being able to leverage their considerable wealth to invest in developing technologies and innovations with the aim of gaining a competitive advantage in the global water sector".

Most of the GCC's water supplies come from desalination. As the OBG report notes, the GCC already accounts for 57% of the world's desalination capacity, and GCC countries plan to invest more than 100 billion dollars between 2011 and 2016 to develop more efficient desalination technologies, wastewater recycling and building water treatment facilities.

Regional water network

The GCC is conducting technical studies in the Saudi capital Riyadh, eastern Saudi Arabia and northern Oman as part of plans to build a regional water network.

The total cost of building the network is estimated at 10.5 billion dollars - 3 billion to build desalination plants and 7.5 billion for pipelines, pumping stations and reservoirs.

In Oman, environmental impact assessments will also be carried out to identify the best places to build desalination plants in Sohar, the sultanate's industrial hub 200 km north of Muscat, and Al Ashkharah, on the Arabian Sea. Oman also plans to build strategic water storage reservoirs in Muscat to avert a crisis if desalination plants are disrupted.

Other GCC water projects in the next few years will see Saudi Arabia complete the world’s largest desalination plant in Ras al-Khair on the Persian Gulf. Abu Dhabi will add more than 30 million gallons per day of desalination capacity to its water network following a green light for a power and water plant extension at Mirfa. And Kuwait is constructing two reverse osmosis desalination plants that will produce nearly 50 million gallons of water per day.

High price of desalination

Desalination, however, carries enormous economic and environmental costs. Despite efficiency improving more than fivefold since 1979, to desalinate a cubic metre of seawater costs one dollar, making it a relatively expensive way of producing potable water.

The desalination process also discharges salt back into the Arabian Gulf and other oceanic sources, jeopardizing their marine life and introducing new environmental risks, the Booz & Company study said.

Seawater desalination is an energy-intensive process, consuming eight times more energy than groundwater projects, and accounting for between 10% and 25% of energy consumption in the GCC.

The current almost total reliance on fossil fuels for water desalination is not sustainable - Saudi Arabia alone uses 1.5 million barrels of oil per day in its plants. This adds to the problems of energy intensity already plaguing the region.

Many of the problems related to desalination could be reduced by replacing fossil fuels with renewable energy sources. This would cut the cost of energy consumption, which accounts for 30‑50% of total water desalination costs. A gigawatt of energy produced by oil and gas generates 700 and 460 tonnes of carbon dioxide respectively. The same amount of energy produced by solar energy (concentrated solar power – CSP) releases just 17 tonnes of carbon dioxide, according to Dr Asma El Kasmi, director of the Arab Water Academy.

Her views mesh with those of the World Bank, whose report "Renewable Energy Desalination: An Emerging Solution to Close MENA’s Water Gap" recommended greater investments in renewable energy and suggested that CSP was the most suitable source of renewable energy, owing to its scalability and ability to provide energy 24 hours a day. The World Bank report noted, however, that CSP may only be an option in the long term because of its current high cost.

Dr Nasser Saidi, founder and president of Nasser Saidi & Associates, an economic advisory and consulting company based in Dubai, notes that although the MENA region is home to 6.3% of the world’s population, it has access to only 1.4% of the world’s renewable fresh water. "To make matters worse, the region currently exploits over 75% of its available renewable water resources due to its burgeoning population, increased urbanization, mispricing of water and rapid economic growth," he warned in an article on the Gulf Business website in October 2013.

"Saudi Arabia in an ill-fated drive to increase food production has - over a 15-year period - largely depleted its water aquifer that had taken millions of years to accumulate. It will be forced to stop its wheat production by 2016. Yemen is already a hydrological basket case and Gaza is an ecological disaster," Saidi commented. In the GCC, a major policy issue is that "the bulk of the region’s water is misdirected into agriculture, a sector that provides less than five per cent of GDP".

Overcoming water scarcity, Saidi argues, requires a combination of ecosystem and water management systems, improved efficiency and pricing of water use, and investment in water infrastructure.

To close the "water gap" in this region, the World Bank estimates that approximately 104 billion dollars per year will be needed, equivalent to about 6% of the MENA region's GDP. However, the Bank warns that the costs of failing to take action could be even higher, reaching up to 300-400 billion dollars per year.

Microfinance in MENA - an untapped market

Historically, most MENA microfinance programmes date from the mid‑1990s, but the sector has made little headway in the region. MENA continues to be the smallest microfinance market worldwide, in terms of both borrower outreach and gross loan portfolio.



Container ship in Latakia, Syria




By Peter Feuilherade


This article was first published in The Middle East magazine, London, December 2013 issue 





The microfinance industry provides small loans and other financial services including savings, insurance and money transfer systems which are essential for low‑income households and small enterprises which are excluded from formal banking systems. These informal lending and borrowing organizations enable users to manage cash flows to finance day-to-day living, invest productively and respond to financial shocks. In recent years, microfinance in some parts of the world has experienced a transformation from what was originally a socially motivated movement to a broader portfolio of financial services, of which payments and savings are becoming the main products

The Washington-based Center for Financial Inclusion at Accion ranks Latin America and the Caribbean as the best region in the world for microfinance, followed by Sub-Saharan Africa, Asia, Eastern Europe and Central Asia, and lastly the Middle East and North Africa (MENA). The World Bank notes that microcredit accounts for just 0.2% of the MENA region’s gross domestic product, and lending by microfinance providers reaches only 1.8% of the adult population, half the rate of South Asia, Latin America and the Caribbean. Even in Morocco, which has MENA's most developed microfinance sector, microcredit loans account for just over 1% of total bank credit, compared with 7% in Latin America and the Caribbean and 5% in Africa.

Historically, most MENA microfinance programmes date from the mid‑1990s, but the sector has made little headway in the region. MENA continues to be the smallest microfinance market worldwide, in terms of both borrower outreach and gross loan portfolio. The reasons include poor regulation and perceived weak risk management, exacerbated by recent political events and social upheaval. 

According to a market profile by the Washington-based Microfinance Information Exchange, which provides data and analysis on some 2,000 microfinance institutions (MFIs) worldwide, in the six MENA countries which reported data in 2012 there were some 1.2 million active borrowers, with a gross loan portfolio of 742 million US dollars. Within the region, microfinance markets are in different stages of development. The number of borrowers in 2012 ranged from 674,302 in Morocco and 209,861 in Tunisia to 36,726 in Lebanon and 20,331 in Iraq. Egypt had 141,299 borrowers, while Jordan had 101,089. Other growing microfinance markets include Yemen, with more than 82,000 borrowers at the end of 2012, and West Bank and Gaza, with about 43,000 active clients.

Regulation

Many experts believe that insufficient supervision and regulation have held back the growth of microfinance in MENA countries. A 2013 report by the Economist Intelligence Unit (EIU) on the global microfinance business environment noted that the regulatory environment in MENA had seen few changes during the previous year. Morocco updated its Microfinance Associations Law and additional rules and regulations are forthcoming. "The main impact of the Law has been to encourage consolidation among smaller microcredit associations (MCAs). However, some microfinance professionals have criticised the Law because it does not assist MFIs in transforming into commercial banks, nor does it assist MFIs that would prefer to remain NGOs," the EIU report commented. In Egypt, a long‑awaited update to the 2002 NGO Law that also regulates MFIs operating as NGOs is still under consideration, while legislation specific to the microfinance industry "has been delayed repeatedly due to political turmoil," the report added.

In the view of Hoda Salman, MENA representative for the Netherlands-based microfinance investment manager Triple Jump, "many MFIs have difficulty securing commercial funds due to weak MFI structures and capacities, restrictive NGO regulations or political and economic instability that can render local currency rates on foreign commercial debt unaffordable". A major hindrance to growth in the sector, she adds, is "the absence of microfinance-specific regulations in many MENA countries, which prevents NGO MFIs from transforming into for-profit companies and/or deposit‑taking institutions".

Peter McConaghy, a World Bank microfinance analyst, agrees that a lack of regulation to support the robust growth of MFIs is to blame for the low levels of microfinance penetration in the MENA area. While noting that each country in the region poses unique challenges, he argues that "the inability of MFIs to accept deposits in many of the region’s markets, underdeveloped financial infrastructure, and low levels of financial literacy among potential beneficiaries all contribute to the limited microfinance outreach in the region."

Potential to expand

But despite microfinance in MENA being undeveloped, it has the potential to expand in a region where, as the World Bank notes, "political and social transitions in countries across MENA are placing additional economic pressure on firms and households". Unemployment levels are higher than in all other world regions and youth unemployment, at 25%, is a particularly pressing public policy issue.

TechNavio, an international technology research and advisory company, forecasts that the global microfinance market will grow at a Compound Annual Growth Rate (CAGR) of 16.61% over the period 2012-2016, with one of the key factors contributing to this growth being the increased focus on untapped markets.

ln Yemen, for instance, with only 7% of Yemenis possessing a bank account, long-latent demand among the population for financial services would seem to make the country an ideal market for microfinance. Analysts also see substantial room for growth of the microfinance industry in Lebanon, particularly in rural areas.

In many MENA countries, despite the increasing use of technology, mobile and correspondent banking is still in the pilot stage. There is great scope for the development of microfinance mobile phone services enabling the transfer of money, although central banks across the region have yet to extend their regulations to cover such innovations.

Philippe de Fontaine Vive, the European Investment Bank Vice‑President of Innovation, believes that for microfinance to expand in the MENA region, significant institutional and capacity building efforts are needed, at all levels including regulatory and supervisory capacity, and especially for smaller MFIs, in order to increase client outreach.

"Financial institutions need to strengthen their capacity to expand their offer of credit and ultimately also other financial services such as deposits. Microfinance remains limited and very few MFIs offer financial services beyond basic credit. Following the recent events in the region, expectations in microfinance as a means to fight unemployment, increase social inclusion, and provide access to finance to the 'very base of the pyramid' are high," he added.

For Hoda Salman of Triple Jump, in addition to the ongoing political and economic instability and insecurity in many of the ‘recovering’ countries, the main challenges for the microfinance industry in MENA lie in the area of regulation. "A conducive microfinance regulatory framework would allow MFIs to provide a wider range of financial services and access more sources of capital (such as equity), amongst other things, to reach more low-income, yet economically active, people," she argues.

Wednesday, 9 October 2013

Israeli green light for controversial Eilat line


 

By Peter Feuilherade

 

This article was first published in MENA Rail News on 8 October 2013

 

Ignoring objections from Israel’s Environmental Protection Minister, a coalition of activists and environmentalists, economists and even the former head of Mossad, the country’s powerful intelligence agency, a ministerial committee on 6 October approved the building of a twin-track high-speed railway line linking Tel Aviv and the port of Eilat in the Gulf of Aqaba.


 
No budget costings were included in the announcement, but latest estimates are in excess of 5.6 billion US dollars. Construction work on the 350-km line, which would carry passengers as well as freight, will take an estimated 10 years. If completed, it will be the most expensive transport project in Israel’s 65-year history.

The scheme is being pushed by Transport Minister Yisrael Katz and Prime Minister Benjamin Netanyahu, who says it would have great strategic significance for Israel. But Minister of Environmental Protection Amir Peretz opposes the project, arguing it would harm the environment. The line, with trains travelling at 250 km per hour, “is liable to turn into a fast track to destroying nature in the Negev [desert] and damaging the Gulf of Eilat,” Peretz said in a joint statement with the Israel Nature and Parks Authority and the Society for the Protection of Nature in Israel. Other critics say the project will also divert resources that could be spent on improving public transport in urban areas.

Giving details of the route, Israeli business news website Globes reported that the first 90‑km section of the line from Tel Aviv to Beersheva was already completed, and the second 35‑km section to Dimona required a second line. The website added: “The third 65‑km section from Dimona to Hatzeva will be especially difficult, with a doubling of the existing track to Nahal Zin and 9.2 km of tunnels to reach the Arava. The fourth 160‑km section will run to the northern entrance to Eilat, where the new port channel will be built. The line will not reach the current port. In addition to the tunnels, the route will require 63 bridges extending over 4.5 km.”
The announcement made no mention of a link with Israel’s Mediterranean port of Ashdod, creating a “land bridge” between Europe and Asia, which had been touted as the project’s main purpose. Options for linking the railway to the ports are expected to be discussed later.

Netivei Yisrael, Israel’s national roads company, says the proposed rail link is not meant to compete with Egypt’s Suez Canal, which connects the Mediterranean and the Red Sea. However, Israel’s Haaretz newspaper quoted estimates that Israel’s planned rail line would allow for “hundreds of thousands of crates of goods to travel between the two continents as well. In addition, Israel will be able to import more than 200,000 cars using the cargo train and export five million tons of chemicals.”

Foreign interest

According to Globes, the Prime Minister's Office director‑general Harel Locker is in favour of financing the project as part of an agreement between governments, rather than through a tender in the normal way. The Chinese, French and Spanish governments are interested in the project, and tentative plans are for the project to be managed by a Chinese company that would build and operate the railway line.

However, former Mossad chief Ephraim Halevy said Chinese involvement might damage Israel’s ties with the United States and Europe. He warned that if China “actively controlled” the track between Eilat and Ashdod, and the port that the government wants to build in Eilat, it would create a situation in which China would control “political and economic pressure points” within Israel.

In response, Israel's Transport Ministry said: “The government of Israel views positively the interest of the Chinese in the Eilat railway project, and is promoting economic ties with China, something that does not go against the close ties that Israel shares with the United States.”

The latest decision suggests that Netanyahu’s argument in favour of the project’s strategic importance for Israel is taking precedence – for the time being, at least – over the economic counter‑view that a route offering both passenger and freight transport would not be financially feasible.

Thursday, 26 September 2013

Winning hearts and minds of GCC public transport users


 
 
 
By Peter Feuilherade
 
This article was first published in MENA Rail News on 24 September 2013.
 
In the next decade, the population of the six Gulf Cooperation Council (GCC) countries is forecast to soar by 30% to over 50 million people – and more than 85% of them will be living in urban areas, according to the UN. Governments in the region are spending billions of dollars on public transport infrastructure and services, to divert traffic from roads and reduce air and noise pollution.

The total planned investment in railways, metros and trams in the Gulf states over the next 10 years is put at almost $150 billion. In addition to a GCC-wide rail network that aims to connect all six states by 2018, almost $30 billion worth of contracts have been awarded in recent months alone to build metro services in the capitals of Saudi Arabia and Qatar, while metro projects are also under way in Abu Dhabi, Kuwait, Jeddah, Mecca and Medina.

The benefits to the economy – including greater efficiency due to reduced traffic, and significant cuts to travel times – are self-evident.

But as growing populations and increasing prosperity boost car ownership, luring commuters away from private vehicles and taxis and persuading them to switch to public transport is a major challenge.

While in London, for example, public transport is used for about half of all journeys, only about 2% of Riyadh’s six million residents currently use public transport. The figures for Jeddah and Bahrain are 4% and 5% respectively. Dubai, with the most developed public transit network in the GCC, reported 165 million journeys in the first half of 2013, or almost 12% of potential users. By 2030, when construction of Dubai’s 422‑km metro and tram network is completed, the aim is to achieve a user rate of 30%.

Mattar al‑Tayer, head of Dubai’s Roads & Transport Authority (RTA), said in July 2013 that residents of the emirate and visitors “do grasp the benefits and advantages of using public transport means, including the psychological and physical relief of riders, reducing traffic accidents, cutting expenses on fuel and maintenance of private vehicles, and avoiding the hassles of finding parking space…”

But many factors are still impeding greater take-up of public transport across the GCC, including poor public perceptions, heavy dependence on private cars and taxis, the absence of standard policies and regulations and the lack of private sector capacity to support this rapid development.

With fuel prices in the region among the cheapest in the world, heavily subsidized by governments, this only serves to promote the continued high use of privately-owned vehicles.

Public attitudes towards the curtailment of subsidies remain resistant to change, but the option of raising fuel prices to promote greater use of public transport is beginning to appear on the political agenda. In August 2013, Saudi Arabia's High Commission for the Development of Riyadh mooted raising fuel prices to make more motorists use public transport. "High fuel prices will prompt a considerable number of private car owners to depend on the metro and buses for their commuting," the Saudi newspaper Arab News quoted the commission as saying. Riyadh is also considering imposing fees for car parking to discourage people from using private vehicles.

Another option is road tolls. In 2007, Dubai was the first city in the region to introduce toll systems on some major roads, but surveys have shown that many Dubai residents remain reluctant to use public transport until it becomes considerably cheaper than personal transport.

Qatar, for its part, has ruled out parking fees or congestion charges, saying they are not feasible until people have safe public transport options.

Raising attractiveness

If coercive measures against car use are to be avoided in an oil‑producing region where the public expect low taxes and import duties, the alternative must be to make using public transport more attractive.

A July 2013 report by global consulting firm Booz & Co said the convenience of passengers was paramount, and customers wanted public transportation that was easy to access and use, as well as being pleasant to ride. “To reach a sustainable level of usage, a metro in the GCC should heed lessons from successful systems that have proper feeds from high-frequency bus services and taxis, as well as ‘park and ride’ facilities for car users. Station and vehicle cleanliness and comfort are also critical to attract riders from all socioeconomic classes,” the report added.

Riyadh’s new 177‑km six-line metro network, due for completion in 2019, is described as the world's biggest current investment in public transport. The Riyadh Development Authority has hired some top international architects to design stations intended to be “tranquil oases for travel, shopping and dining”, to place the metro at the heart of life in the Saudi capital. One of the stations, Olaya, will feature elevated public gardens and an undulating roof inspired by desert sand dunes. Ibrahim al-Sultan, the official supervising the project, told Reuters news agency that the metro will "enhance the quality of life" of Riyadh's six million inhabitants.


Riyadh metro to enhance "quality of life"

Some Saudi women see the new metro as offering them greater independence by overcoming the ban on women driving in the Kingdom. The Riyadh metro will include "family class" carriages, intended to give women privacy and peace of mind like the "ladies only" carriages on metros in Dubai and Cairo, among others.

The Dubai Metro, too, plans to extend sections reserved for women and children in carriages during peak hours, after complaints and surveys found that these were often more congested than the rest of the train.

A statement by the RTA in August 2013 said the number of women and children travelling on the Metro had increased noticeably, “thanks primarily to the growth in the public transportation culture among the public from different social cross-sections”.

Constant connectivity is another essential, now that technological achievements mean public transport users worldwide expect to be able to use smartphones and tablets during journeys, as well as receive up to date travel information via smart technologies, on social media as well as display screens in carriages, on platforms and station concourses, shops and restaurants.

Dr Muna Hamdi, founder and leader of Intelligent Mobility: Future Vision (iMFV) and ITS Arab director of research, told MENA Rail News that the first priority for GCC public transport planners should be multi-modal connectivity, providing seamless travel for people and goods between transport networks.

Dr Hamdi also stressed the need for integrated planning and regulation at the GCC level.

“The most important step is to develop a multi-modal GCC regional strategy that takes into account the rapid change in technology (planning flexibility) and economic growth, as well as environmental and cultural aspects of a healthy and prosperous society. The lack of convenient travel options for a considerable time in the Arab region, personal wealth and the availability of fuel have encouraged dependency on personal transport,” she said, adding that “adaptation to the local culture user needs and aspirations” was paramount.

But experts caution that planners in the GCC must be realistic about how many people will use public transport. The Booz & Co report predicts that in the light of the current strong car culture in the region and its far‑flung populations, public transport is unlikely to account for more than 30% of motorized trips in GCC cities.

 

“Even to reach that figure, treble the current level, transport authorities will have to do more than build public transport systems based on demand and transit-oriented development. They will need a holistic approach based on integrated modes of transportation, customer convenience, reduced private-car use, private-sector involvement, and an integrated planning and regulatory framework,” the Booz report concluded.

Wednesday, 4 September 2013

Could rail be a viable outlet for South Sudan’s oil exports?


By Peter Feuilherade

This article was first published in MENA Rail News on 13 July 2013
 
Flag of South Sudan
The latest flare-up between Sudan and its landlocked neighbour South Sudan over cross-border flows of oil via pipelines raises the issue of whether building a railway line to export South Sudan’s oil via Kenya instead could turn out to be a better long-term option.

In June, Sudan threatened to block exports of crude oil from South Sudan via pipelines controlled by the government in Khartoum, following renewed claims that South Sudan was supporting rebels operating across the shared border. The allegations are denied by the government in Juba, the capital of South Sudan, which is the world’s newest nation. When South Sudan gained independence from Khartoum in 2011 after a 22-year civil war, Sudan lost 75 per cent of its oil production overnight, but retained the pipeline infrastructure, as well as the refineries and export terminal at Port Sudan on the Red Sea. This is currently the only way that South Sudan, the most oil‑dependent country in the world, can get its oil to market.

After the row was defused at the end of June, South Sudan shipped its first oil cargo through Sudan to international markets since 2011. But tensions remain between the two countries, and it is very likely that oil exports from South Sudan will be interrupted again.

In late June, the presidents of Uganda, Kenya and Rwanda agreed to build two pipelines across East Africa, one of which would run from South Sudan to Lamu port in northern Kenya. While this would give the Juba authorities a pipeline to the south, advocates of building a rail link to export South Sudan’s oil believe they have a strong case.



“Flexible, open-ended, expandable”

In 2012, two US academics and Sudanese specialists set out the case for building a railway line to connect South Sudanese oil fields to the Kenyan coast. But so far the proposal has not attracted interest either from the government in Juba or the international rail construction industry.

The railway project, if adopted, could put the new country on a path for resolving a host of pressing political and economic problems in a single blow, says Sharon Hutchinson, Professor of Anthropology at the University of Wisconsin. It could also represent an enormous business opportunity for international railway companies, she told MENA Rail News in an interview. 

Her vision is of a flexible, open-ended and expandable railway system that could begin with a route that would link South Sudan to Kenya (and Uganda) and then gradually expand, as income from oil export revenues and supplementary railway revenue streams grew, to encompass the entire country and become a force for economic growth throughout the extended region.  

She believes that a railway line could be built in stages that could gradually expand outwards from an initial cut to the coast in order to progressively link up with more and more regional urban hubs, such as Nairobi and Kampala and, later, perhaps, Dar es Salaam and Addis Ababa. “Even more importantly, it could serve as a force of political and economic growth and unification by gradually interconnecting diverse domestic administrative centres and regions,” Hutchinson added, noting that there is already a rail line extending from Khartoum to Wau in South Sudan, which could be tied in and expanded as a more effective route northwards. 


Train travelling towards Wau
Recalling how railway construction during the colonial era had stimulated rapid economic development and growth in many African countries in the past, she said that “unlike a single purpose oil pipeline, a railway line would be able to create multiple revenue streams for both the state and people of South Sudan for generations to come.  It would enable South Sudan to create an increasingly diversified import and export economy.”

But Hutchinson warned that if government officials in South Sudan do not give the railway proposal more serious consideration at this stage, they may find it very difficult to "catch up" with neighbouring states later on, once the latter have taken the economic lead. 

Eric Reeves, a Sudan researcher and analyst at Smith College, Massachusetts, also believes South Sudanese officials have not taken the railway option seriously enough. He told MENA Rail News: “The real issue is the lack of a leadership which has to date failed to assess this key transportation decision in a realistic way.  The oil pipeline can carry more oil, but will take longer to build and is one‑way - it is useless for imports.”

In reply to arguments that South Sudan critically needs maximum oil revenues now, which an existing pipeline can provide, Reeves counters: “Even if a rail line monetizes the oil reserves more slowly, that's probably a good thing.  Too much money came in too fast to escape the blight of corruption.  And when the oil runs out, the pipeline will be useless - not so a rail line.”

In a February 2013 briefing paper entitled "Railway: A Better Option than Pipeline for South Sudan”, Samuel Nyuon Akoi Nyuon, an engineering student at Cornell University, pointed out that given its current economic predicament, South Sudan cannot afford to build roads, railways and a pipeline at the same time. “It must choose what to acquire first in order to stimulate the growth of her nascent economy. Looking at the three options, railway offers the best opportunity for restarting oil exports and stimulating long‑term economic growth,” he argued.

There is already a separate plan, the LAPSSET (Lamu Port-South Sudan-Ethiopia) project, a $25 billion venture that envisages linking the Kenyan coastal town of Lamu to South Sudan and Ethiopia by building thousands of miles of roads, railways and oil pipeline over a time-scale of 17 years. Officials in Kenya, the driving force behind the project, are pinning their hopes on the World Bank, the African Development Bank and the African Union, as well as Chinese investment, to provide the finance. But funding for this ambitious mega-project is not assured.

Tuesday, 2 July 2013

Most North African Rail Markets Buoyant Amidst Uncertainty


This article appeared on MENA Rail News on 6 June 2013


By Peter Feuilherade - 6 June 2013


On top of high levels of unemployment and complex political transitions in North Africa, the weaknesses of European economies have affected those countries in the region that are dependent on European markets. In the aftermath of the Arab Spring uprisings, political and social tensions also continue in Egypt, Libya and Tunisia. But infrastructure and construction projects are still of major importance, and a steady stream of new contracts in the rail sector in recent months is cause for optimism.

The African Economic Outlook 2013, published in May 2013, predicts that the economic climate in North Africa will generally improve in the near future. “Due to the resumption of oil production and exports, Libya’s GDP bounced back by 96% in 2012, boosting growth in North Africa to 9.5%, after the region’s GDP had stagnated in 2011,” the report notes. While in Egypt growth remains below pre-revolution levels, Tunisia’s economy recovered in 2012 and is forecast to grow by around 3.5% in 2013, rising to around 4.5% in 2014. Morocco and Mauritania are predicted to enjoy continued solid growth in 2013/14 at average rates of 6% and almost 5% respectively. In Algeria, growth is expected to accelerate from 2.5% in 2012 to above 3% in 2013 and 4% in 2014.


North-Africa


Although Egypt is plagued by a mounting economic crisis, the European Union has allocated US$ 160 million towards the development of the transport sector, onethird of which will fund construction of the third phase of the Cairo Metro. Grants totalling US$ 250 million from Kuwait and the Arab Fund for Economic and Social Development will support electronic signalling projects on the Banha-Zagazig line north of Cairo. And during a visit by Egypt’s Islamist President Mohamed Mursi to Moscow in April to drum up financial support, it was agreed that Russian companies would participate in rail and metro projects. However, Egypt’s railways remain plagued by outdated rolling stock and low safety standards, and it is difficult to see how a proposed high-speed train project, costing an estimated US$ 3.5 billion, will attract either local or foreign investors while the financial situation deteriorates.

TGV is Morocco’s most important transport project


Morocco's planned TGV routes

There is better news from the other side of North Africa, where both passenger and freight traffic in Morocco are on the increase. The construction of the 350-km high-speed rail (TGV) line between Tangier and Casablanca, in partnership with France, is regarded as the kingdom’s most important transport project. In April France’s Colas Rail and its subsidiary Colas Rail Maroc, as part of a consortium with Egis Rail, won a design-build contract for a 185-km double track highspeed line between Tangier and Kenitra. The total contract value is US$ 175 million, of which US$ 160 million are earmarked for Colas Rail and Colas Rail Maroc. A consortium comprising Ansaldo STS France and Cofely Ineo was awarded a US$ 155 million contract to design and supply signalling, train control and telecommunications systems for the line, which is scheduled to open during the first half of 2016.

Eventually the TGV network will extend over 1,500 km. According to the international business intelligence firm Oxford Business Group (OBG), “the move to set up a joint venture for TGV maintenance and establish a training institute will be a key driver in the Moroccan authorities’ bid to create a qualified local workforce with know-how for future ventures.”


New tram network in Oran

In May a new 18-km tram network opened in Oran, Algeria’s second city. The rail network in Algeria is currently concentrated in the north of the country and comprises 3,660 km of standard gauge and 1,140 of narrow gauge. The government plans to modernize the network and electrify existing rail operations, as well as develop a 1,300km highspeed east-west line that will run from Tunisia to Morocco, with branches connecting with major ports and cities. Algeria has allocated US$ 32 billion to the development of its rail infrastructure during the two five-year plans covering the decade from 2005 to 2014, Ministry of Transport spokesman Nassim Mustapha said in March 2013. Much of the expenditure will be spent linking the more developed rail networks in the north to towns in the less well-connected south. But officials admit that many rail projects have been held up owing to problems connected with “expropriation”. Political issues are also affecting the sector’s expansion, with Algerian newspaper Le Matin in March 2013 referring to “the state of tension which prevails in several towns in southern Algeria”.

In Tunisia, Colas Rail, in a consortium with Siemens and Tunisian firm Somatra-Get, won a US$ 187 million contract in February to build the first two lines of a high-speed railway network in the capital Tunis. Construction work on the project, financed by a consortium of international backers and the Tunisian government, is scheduled to start in mid-2014 and is expected to be completed in 2018.
Meanwhile, a definitive announcement is awaited from Libya about the future of stalled projects agreed before the revolution and valued at US$ 12 billion. Construction to build more than 2,000 km of new railway track would have been split between the China Railway Construction Corporation (CRCC) and Russian Railways (RZhD). The Libya Herald newspaper reports that while CRCC remains silent on its future activities in Libya, RZhD has said it was “taking all possible steps to begin negotiations with Libya in order to discuss the future prospects for the resumption of the project and to develop a joint plan of action…“.

Long-term reforms

In the words of Ernst & Young’s Africa Attractiveness Survey (2013), “countries, such as Morocco, that are making substantial improvements in transport and logistics, are the ones that have implemented long-term and comprehensive reforms and investments across the transport and logistics supply chain.”
However, analysts say that the fallout from the Arab Spring revolutions continues to impede business across North Africa, even in countries like Algeria which did not go through a radical political upheaval.

John Hamilton, London office director of the business intelligence and consultancy company Crossborder Information, told MENA Rail News: “The common denominator is uncertainty created by political change and the lack of central authority… Across the whole region, the political shifts mean that investors and contractors will have to pay close attention to their local partners.”

Electric Urban Transport


By Peter Feuilherade

This article first appeared in the April 2013 issue of e-tech, published by the International Electrotechnical Commission (IEC), Geneva..
www.iec.ch/etech

It was also published by MENA Rail News

A revival after a long decline

More than half the world’s population now live in cities, according to United Nations data, and that percentage is forecast to hit 60% by 2030. By 2025 there will be 37 megacities (22 of them in Asia), each home to more than 10 million people. The growing use of electric buses, trams and metropolitan “light railways” offers an environmentally friendly option to reduce local emission of pollutants significantly in the expanding cities of the future.

Bus

Nothing new

Urban public transport systems powered by electricity can trace their origins to 1879 when Berlin launched the world’s first electric suburban railway (S-Bahn), followed by electric trams in 1881 and electric trolleybuses a year later.

With transport systems estimated to account for between 20% and 25% of world energy consumption and CO2 (carbon dioxide) emissions, electric vehicles offer greater efficiency than their diesel counterparts. Using their brakes, they can generate kinetic energy to be recycled back into the power network. Electric engines on buses and trams cause less vibration, making journeys more comfortable for passengers and reducing maintenance time and costs.

Several IEC TCs (Technical Committees) prepare International Standards for the electric buses, trams, trolleybuses and metro/light rail vehicles used in public urban transport networks, as well as the batteries, capacitors and fuel cells used in propulsion systems, and many other components.

Buses

Electric buses, which require neither great range nor speed and can be partially recharged during their journeys as they stop for passengers, are seen as the most promising area for potential growth of green urban public transport.

China is the world leader in developing battery electric buses. The southern city of Shenzhen has the world’s largest zero-carbon fleet of all-electric buses and taxis, and plans to have 6 000 electric buses in service by 2015. Shenzhen is also home to the world’s largest manufacturer of electric buses, BYD (Build Your Dreams). The company has started to enter overseas electric bus markets. At the start of 2013 its vehicles received Whole Vehicle Type-Approval from the European Union, giving the company the green light to sell its buses to all EU member countries without further certification.
The number of electric buses in countries other than China is limited but growing.
Electric Buses

The US-based market research and consulting firm Pike Research forecast in August 2012 that the global market for all electric-drive buses including hybrid, battery electric and fuel cell buses will grow steadily over the next six years, with a CAGR (Compound Annual Growth Rate) of 26,4% from 2012 to 2018. According to Pike, the largest sales volumes will come in Asia Pacific, with more than 15 000 e-buses being sold in that region in 2018 – 75% of the world total. China will account for the majority of global e-bus sales, Pike predicts. It believes that growth in the e-bus market will accelerate strongly in Eastern Europe and Latin America, the latter driven largely by Brazil. Sales in Western Europe will experience steady growth (around a 20% CAGR), according to Pike.

A December 2012 report by the research and consultancy firm IDTechEx forecast that the market for electric buses and taxis will grow from USD 6,24 billion in 2011 to USD 54 billion in 2021, of which the largest part will be buses. China will become by far the largest market for both electric buses and electric taxis. According to Dr Peter Harrop, chairman of IDTechEx, “in China… over 100 000 electric buses a year will eventually be bought as part of the national programme”.

Electric Lines

 

Trolleybuses

Trolleybuses are electric buses that use spring-loaded trolley poles to draw their electricity from overhead lines, generally suspended from roadside posts, as distinct from other electric buses that rely on batteries. Because they do not require tracks or rails, they are more flexible than trams and drivers can cross the bus lane, making the installation of a trolleybus system much cheaper. Trolleybuses operate in some 370 cities or metropolitan areas worldwide, according to the Trolley Project, which aims “to unlock the vast potential of trolleybuses to transform public transport systems” across Europe in line with the European Commission’s target to reduce traffic-related CO2 emissions by 60% by 2050.

Trams

In the 1960s the tram saw a decline in favour of diesel driven buses, but the backlash in recent years against pollution and dependence on fossil fuels has seen a resurgence of interest in electric trams as another urban transport system that can carry large numbers of passengers efficiently and generates no emissions at the point of use. Tram systems do not need vast financing compared with underground systems, which are typically four times more expensive to construct. However, in addition to its relative high cost, compared to that of buses or trolleybuses, the greatest disadvantage of the tram is its confinement to a set route by the wires and tracks it requires. The largest tram networks are in Melbourne, St Petersburg, Vienna, Berlin, Milan, Toronto, Budapest, Bucharest and Prague. Dozens of cities in North America are exploring or planning tram systems.

Metro and light rail

In a December 2012 study SCI Verkehr GmbH, an international management consultancy based in Germany, forecast the global growth in railway electrification at a CAGR of 3,4% up to 2016.
Market growth is mainly driven by new metro and electric light rail urban transport projects under way on most continents, from major cities in Asia and the Persian Gulf to North and South Africa and North American urban areas.

A metro rapid transit system is an electric passenger railway in an urban area with a high capacity and frequency, typically located either in underground tunnels or on elevated rails above street level. It allows higher capacity with less land use, less environmental impact and a lower cost than typical light rail systems.

Light rail systems use small electric-powered trains or trams that generally have a lower capacity and lower speed than normal trains to serve large metropolitan areas. They usually operate at ground level, but can include underground or overhead zones.

A common feature to rail systems: IEC International Standards

All urban rail systems rely on International Standards developed by IEC TC 9: Electrical equipment and systems for railways. Areas covered include rolling stock, fixed installations, management systems (including communication, signalling and processing systems) for railway operation, their interfaces and their ecological environment. These standards deal with electromechanical and electronic aspects of power components as well as electronic hardware and software components.

Battery Fuel

 

Batteries and fuel cells

Buses, which have defined, short routes and daily travel distances of less than 200 km, are well suited to battery-only electric technology. Li-ion (Lithium-ion) technology is the most commonly used. Pure electric buses divide into those using high power density Li-ion batteries alone and those with large banks of supercapacitors in the roof to manage fast charge and discharge and increase battery life. Hydrogen powered fuel-cell vehicles provide longer range than battery electric vehicles. Refuelling times are short and comparable with present internal combustion engine vehicles. Currently, the main drawbacks of hydrogen powered vehicles are the high cost, mainly due to expensive fuel cells, and the lack of refuelling infrastructure. IEC TCs prepare International Standards for batteries and fuel cells used in urban transport systems.

IEC TC 21: Secondary cells and batteries, has prepared standards covering requirements and tests for batteries for road vehicles, locomotives, industrial trucks and mechanical handling equipment. Its work includes standards for performance, reliability, abuse testing and dimensions for hybrid and plug-in hybrid Li-ion batteries, which are seen as one of the most promising types of secondary batteries.

IEC TC 105: Fuel cell technologies, is responsible for standards for fuel cell commercialization and adoption. It focuses on safety, installation and performance of both stationary fuel cell systems and for transportation, both for propulsion and as auxiliary power units.

Almost all fuel cell buses incorporate a battery for energy storage and there is also a balance to be struck in the hybridization of the fuel cell power plant and the supporting battery pack. While fuel cell costs remain high and hydrogen infrastructure sparse, it may be more economical to use battery-dominant buses with fuel cell range extenders. The fuel cell bus sector is showing year-on-year growth, with more prototypes being unveiled. Successful deployments have taken place in Europe, Japan, Canada and the USA but the high capital cost is still a barrier to widespread adoption.

Pike Research forecasts that global demand for Li-ion batteries in electric drive buses will be more than 162 000 kWh in 2012. It expects that demand to grow to more than 1,3 million kWh by 2018, a CAGR of 42%. Fuel cell buses will drive demand for Li-ion batteries as well, but to a lesser degree. Pike Research estimates that they will require around 1 600 kWh in 2012, but will grow to 22 240 kWh by 2018.

Electric Transport

 

More IEC standardization activities for electric urban transport

Electric urban transport systems depend also on standardization work from many other IEC TCs and their SCs, such as, TC 22: Power electronic systems and equipment, TC 36: Insulators; TC 40: Capacitors and resistors for electronic equipment; TC 47: Semiconductor devices, and obviously TC 69: Electric road vehicles and electric industrial trucks, to name only a few. Other TCs may be less obvious, such as TC 56: Dependability, which is involved in rolling stock-related standardization work. It maintains liaison activities with TC 9 and stresses that “without dependable products and services (…) transport [would be] non-functioning (…) there would be numerous car, train (…) accidents”.

“Down to Electric Avenue”

Wireless or induction charging technology to charge electric vehicles, including buses and light rail trains, is in use or undergoing testing in many countries, including South Korea, the USA, Canada, the United Kingdom, Germany, Belgium and Italy.

Wireless charging plates built into the road at bus stops and terminals enable electric buses to be charged wirelessly through a brief connection while passengers get on or off the bus at a stop. This resolves the current battery limitations that prevent an all-electric bus from operating all day off an overnight charge. It would also mean the end of unsightly overhead cables to power trams and trolleybuses. There can be a loss of energy in the transfer, but tests using a light rail train in Germany in 2011 to demonstrate the technical capability of the system under actual conditions of daily operation indicated an efficiency rating above 90%.

Researchers at the Korea Advanced Institute of Science and Technology say the transmitting technology they road tested supplied 180 kW of stable, constant power at 60 kHz to passing vehicles equipped with receivers, and they recorded 85% transmission efficiency. Installing similar chargers at busy traffic lights and junctions and in parking spaces could extend the technology to consumer electric cars.

There are concerns, however, about different competing wireless charging technologies, the costs of installing the infrastructure and its capacity to stand up to extreme weather. Meanwhile companies, notably in China and the USA, have developed ultra-fast charging technology capable of charging an electric bus battery in five to ten minutes.

Other features likely to be become standard in the electric buses of the future include regenerative charge braking, energy harvesting shock absorbers, solar panels and quickly replaceable battery packs.

These and other innovations in transportation and urban mobility are set to play a prominent part in “smart city” projects around the world, a technology market that Pike Research forecasts will be worth USD 20,2 billion annually by 2020.