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.

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.





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.”

Impact of Arms Embargoes in the Middle East and North Africa

Protests in Syria, June 2011

This article was first published in Defence Management Journal, August 2011

Four UN arms embargoes are currently in force in the Middle East and North Africa, targeting Libya and Iran as well as non-government forces in Lebanon and Iraq. A European Union (EU) arms embargo is also in place against Syria.

On 26 February 2011 , UN Security Council (UNSC) Resolution 1970 imposed an arms embargo against Libya and put in place sanctions on members of Libyan leader Muammar al-Gaddafi's inner circle, while Resolution 1973 adopted on 17 March authorized a no-fly zone over Libya. Previous UN and EU sanctions on Libya, including arms embargoes, had been lifted in 2003 and 2004 after Libya announced that it had ended its nuclear, biological and chemical weapon programmes.

A range of UN sanctions is in place against Iran, including bans on arms sales and transfer of technology. In June 2010, the UNSC approved fresh restrictions, including prohibiting Iran from buying heavy weapons such as attack helicopters and missiles.

The EU imposed an arms sales embargo on Syria on 9 May 2011, as part of efforts intended to force Damascus to end violence against anti-government protesters. The embargo covers weapons, military vehicles and equipment, spare parts and ammunition, and equipment that could be used for internal repression.

Libya embargo violations

The UN and EU arms embargoes are impacting the two countries targeted in 2011 in different ways.

In Syria, whose main arms suppliers are Iran, Russia and China, troops already have plenty of military equipment to use since pro-democracy protests flared in March 2011. The effects of the EU arms embargo are limited, and events are more likely to be affected by international diplomatic pressure and economic sanctions.

However, there are reports that the smuggling of small arms from the black market in Lebanon to Syria has soared. Lebanese arms dealers, most of them working under the protection of political parties, have supplied light and medium weapons not only to Syrians but also to Lebanese fearful of violence spilling over into their country. Syrian activists, for their part, have denied using weapons during protests against government troops.

Tensions have escalated between Syria and its neighbour Turkey, which opened its borders to Syrian refugees fleeing embattled border towns. As a NATO member, Turkey has contributed naval vessels to patrols enforcing the UN arms embargo in Libyan waters, although it not taken part in air raids.

The UN arms embargo on Libya has been more controversial than the EU-Syria one. It has produced sharply opposed views over interpretation, as well as confusion over its precise scope. While some sides maintain that arming the anti-Gaddafi opposition technically violates the embargo, others argue that the UN sanctions apply only to the government.

Despite NATO AWACS planes and more than 20 ships patrolling the Central Mediterranean to enforce the embargo, there have been many reports of rebels bringing weapons into Libya, including within supposed aid shipments, or in small consignments across the border from Tunisia. The rebel forces have also been supplied with weapons by France and Qatar, among others. The French military confirmed that in June, it had air-dropped weapons to rebels fighting government forces in the highlands south of Tripoli, the first time France admitted arming the rebels.

Russia accused France of committing a "crude violation" of the UN weapons embargo by arming the rebels. The UK said diplomatically that, in its view, "the UN resolutions allow, in certain limited circumstances, defensive weapons to be provided".

The UK, along with France and Italy, has deployed military advisers with the rebels, and has sent body armour, uniforms and communications equipment to police officers in rebel-held areas. There have also been reports of US teams operating covertly inside Libya. As for the pro-Gaddafi forces, they have reportedly received missiles and grenade launchers from Iran, as well as 500 "military grade" vehicles supplied by Algeria.

The lack of security across large parts of Libya has also raised fears over weapons falling into the hands of hostile forces in the wider region. The US, other Western governments and Libya's neighbours, notably Algeria, are concerned that stockpiles of weapons and ammunition at former military bases in eastern Libya abandoned by Gaddafi's troops after NATO air strikes could be sold on to militant groups such as Al-Qaeda in the Islamic Maghreb (AQIM), or organized crime cartels.

Political difficulties

Enforcing arms embargoes invariably involves political as well as practical difficulties.

There are very few provisions for the UN to punish violators, other than normative condemnation. Christian Le Mière, Research Fellow at the International Institute for Strategic Studies in London, said: "This is particularly true for the world’s major arms exporters, who are all coincidentally the permanent five members of the UN Security Council, with veto power." Generally, veto wielders Russia and China are reluctant to agree with UN sanctions.

In the Libyan case, the sanctions were imposed in great haste and the UNSC did not anticipate the stalemate and potential partition of the country.

With hindsight, "it was not the best idea to impose an arms embargo on the entire country which technically prohibits support to the anti-Gaddafi forces", said Thomas Biersteker, Professor of International Security and Conflict Studies at the Graduate Institute in Geneva.

Arming the Libyan rebels might possibly be defensible in law, based on the letter of the relevant UN resolutions, but doing so is politically very questionable, in the vierws of Pieter Wezeman, Senior Researcher at the Stockholm International Peace Research Institute (SIPRI). "It will undermine the chances of getting China and Russia to agree on future UN arms embargoes if such a legalistic approach is taken. If it was the intention of the sanctions to allow rebels to receive arms, that should have been stated clearly in the resolutions," he added.

As regards enforcement of embargoes in practice, many prohibited arms are likely to get through controls undetected. Weapons, particularly small arms and light weapons, can easily be hidden in shipments. The volume of global trade makes it impossible to verify the content of every shipping container, while air transport can use falsified documents to mislead regulators about the destination of a particular cargo.

Professor Peter Wallensteen of Uppsala University, one of the authors of a 2007 report on the impacts of UN arms embargoes, believes that they are a good instrument that the international community should save for the right conditions where they are likely to succeed.

"There is often a tendency with this kind of sanctions, as well as with other kinds of sanctions, that they are generated more for domestic reasons, to appeal to public opinion and so on, rather than thinking whether they will be an effective tool," he argues.

Biggest losers

The UN arms embargo on Libya could prove costly to the global arms industry if NATO's campaign is scaled down and Libya becomes mired in a low-intensity civil war.

Russia's Interfax news agency quoted military sources as saying that Russia could lose up to 3.8 billion dollars in confirmed or possible orders as a result of the ban on arms sales to Libya.

According to EU figures, in 2009 member states granted export licences worth 490 million dollars to Libya. Italy was a prime source for border surveillance and security equipment, and several Italian firms had signed or lined up deals worth hundreds of millions of dollars.

The UK was not a major supplier of weapons to Gaddafi's forces, even before the British government revoked arms export licences this year. Since January 2011, more than 160 export licences for Middle East countries have been revoked, mainly for Libya and Bahrain.

North Africa Unrest, High Prices Hamper Continent's Economic Recovery

Although Africa weathered the 2009 global economic crisis, the unrest in North Africa combined with rising fuel and food prices could slow growth this year, a new report from the African Development Bank warns.

Article first published as Unrest, High Prices Hamper Africa's Recovery on Technorati.

 Ghana community farmers (IMAGE – Trees ForTheFuture)

Africa's economies have weathered the global crisis relatively well and rebounded in 2010, according to the African Economic Outlook 2011, launched on 6 June 2011.

But recent political events in North Africa and high food and fuel prices are likely to slow the continent’s growth down to 3.7% in 2011, the report warns.

During this year, sub-Saharan Africa will grow faster than North Africa. The report predicts a rebound to 5.8% in 2012. Economic growth in Africa has averaged 5% in the past decade.

The new report was launched in Lisbon, which later this week will host the African Development Bank’s (AfDB) annual meeting, the first gathering of African finance ministers and other officials to be held in Europe for 10 years.

"Africa is growing but there are risks. Urgent attention is needed to foster inclusive growth, to improve political accountability, and address the youth bulge," said Mthuli Ncube, Chief Economist and Vice-President of the AfDB.

New trade with emerging economies

Co-authored by the African Development Bank (AfDB), the OECD Development Centre, the United Nations Development Programme (UNDP) and the United Nations Economic Commission for Africa (UNECA), the report covers 51 of the continent's 53 countries.

It urges African countries to develop closer cross-border ties in dealing with traditional and emerging partners so they can boost sustainable and inclusive growth.

Despite its large oil and mineral exports, Africa today still accounts for only about 1.5% of global trade. However, Africa is becoming more integrated in the world economy and its partnerships are diversifying, revealing unprecedented economic opportunities.

New routes opened between Africa and emerging countries are promising, the report states. "New partners bring new opportunities for African countries," said Mario Pezzini, Director at the OECD Development Centre.

Emerging economic powers like China and India are seeking to extend their influence in Africa, not only through trade and investment but also through diplomatic alliances.

China's $126 billion annual trade with Africa is worth almost three times that of India's $ 46 billion. But India is moving to shrink that gap, as witnessed at the second India-Africa Forum on 24-25 May 2011 in the Ethiopian capital, Addis Ababa. India's bilateral trade with Africa is forecast to exceed $50 billion this year.

China now Africa's main trading partner

In 2009, China surpassed the US and became Africa’s main trading partner, while the share conducted by Africa with emerging partners has grown from approximately 23% to 39% in the last 10 years.

Africa’s top five emerging trade partners are now China (38%), India (14%), Korea (7.2%), Brazil (7.1%) and Turkey (6.5%).

While traditional partners, as a whole, still account for the largest proportion of Africa’s trade (62%), investment (80%) and Official Development Assistance (90%), the report notes that emerging economies can provide additional know-how, technology and development experiences required to raise the standard of living for millions of people on the continent.

World Bank echoes warning on fuel, food prices

On 12 May 2011 the World Bank also warned that high food and fuel prices could slow Africa's rapid recovery from the global financial crisis. Sub-Saharan Africa's economy was likely to grow by 5.1% in 2011 and 5.4% in 2012, it said. An earlier forecast by the Bank had shown the region growing by 5.3% this year and 5.5% in 2012.

The sub-Saharan African economy grew by 4.7% in 2010, rebounding from 1.7% growth in the previous year, when the world economic crisis hit output.

"Having presented a fairly optimistic picture, I should add that there are some real risks to this growth forecast. Perhaps most importantly is this increase in food and fuel prices that we are seeing right now," Shantayanan Devarajan, World Bank chief economist for Africa, told Reuters in an interview.

"If food prices and particularly fuel prices continue to rise, there is some really serious risk to the growth forecast."

On a positive note, Devarajan said sub-Saharan Africa should also see higher foreign capital flows in 2011 - after rising 6% to $32 billion in 2010 - as perceptions about the continent improve.