A new regional shipping agreement is set to bolster Tunisia’s links to key hubs in the Mediterranean, as part of the country’s efforts to improve the performance of its maritime sector.
The “Motorway of the Sea” (MoS) project will take the form of a high-frequency, roll-on/roll-off (ro-ro) freight service connecting the Tunisian ports of La Goulette and Radès with facilities in Turkey and Italy.
The initiative, which has been in the planning stages since 2008, is expected to support regional development by facilitating concentrated, intermodal freight movement by integrating short-sea shipping with road and rail transport.
The new maritime-based logistics chain is slated to open in January 2017, with the project being pioneered by the Union for the Mediterranean (UfM), a 43-member-state intergovernmental organisation tasked with promoting regional cooperation.
A boost for the maritime sector
The route is being developed as a public-private partnership (PPP), spearheaded by the UfM and three other stakeholders: the Turkish Chamber of Commerce in Italy, the Italian College of Railway Engineers and Titi Shipping, a Brindisi-based maritime agency.
Under the agreement, Tunisia will benefit from high-frequency shipping service links to the Turkish ports at Izmir and Mersin and the Italian hubs of Bari, Brindisi and Taranto, in the Puglia region.
With a view to enhancing the global competitiveness of Mediterranean shipping, the UfM expects the benefits of streamlined maritime transport to spill over into other countries in the region.
Initial forecasts suggest the overall cost of the project will reach around €477m, with expected revenues over a 20-year lifetime cycle estimated at €602m.
Efficiency gains
While Tunisia’s external trade stands to benefit from the maritime project, officials are aware of the need to upgrade the country’s port and shipping capabilities if the country is to maximise the line’s potential.
In December Mahmoud Ben Romdhane, then-minister of transport, warned that inefficient ports had cost the economy around TD600m (€266.6m) over the course of 2014. The Tunisian-flagged merchant fleet had dwindled to just eight ships, he noted.
Tunisia has historically enjoyed ample capacity and high-frequency sea links to key markets in Europe, but the past few years have seen traffic fall somewhat on the back of the post-revolution turbulence.
The World Bank’s logistics performance index, which measures a range of factors that contribute to a country’s transport capabilities, has seen Tunisia’s ranking decline: it fell from 41st of 155 countries in 2012 to 110th of 160 in 2014.
Tunisia ranked reasonably well in the fields of timeliness and handling international shipments in 2014, but less successfully when it came to Customs, infrastructure and logistics competence, according to World Bank figures.
What has to be prepared ?
Tunisia has already begun taking steps to improve its ports, with expansion work under way at the port of Zarzis. According to Romdhane, plans for a new dock tailored for oil products are included in the project.
Slim Chaker, minister of finance, told media in February that if Tunisia wants to compete with other ports in the region, which offer deepwater facilities and sophisticated container-handling equipment, greater investment will be needed.
Further improvements are already planned at several of Tunisia’s other ports, including La Goulette and Radès, which are both facing growing congestion, according to Chaker.
Tunisia’s Office of the Merchant Navy and Ports (Office de la Marine Marchande et des Ports, OMMP) launched an assessment of the infrastructure requirements of the La Goulette, Radès, Bizerte, Sousse, Sfax, Gabes and Zarzis ports, with funding from the French government, in late 2015.
During a visit to the country in September, Alain Vidal, France’s minister of transport, pledged support for Tunisia’s port development in the form of a €12m concessional loan to finance installation of new equipment at three priority ports – La Goulette, Radès and Bizerte – although the bulk of the project financing will be sought under a PPP agreement.
For its part, the Radès port is also set to benefit from a new 50-ha business and logistics park, which is expected to cost around €100m. In addition, construction of a new container terminal at the port and an upgrade to three of its docks is being rolled out, Imed Zammit, CEO of the OMMP, told media. The project is being structured as a PPP, worth a reported €30m.
Trade prospects
In trade terms, Tunisia will be looking to the MoS to boost international commerce, particularly on a regional level.
Italy already accounts for a sizeable share of Tunisia’s exports, with goods sold to the country totalling €2.92bn in 2014 – equivalent to 19.1% of Tunisia’s total. Italian imports to Tunisia, meanwhile, reached €3.31bn, or 14.7% of the total. Bilateral trade with the broader EU was much higher, at around €20bn in 2014, according to the European Commission.
Although trade with Turkey is developing from a relatively low base, there are prospects for future growth through the new freight service. Tunisian exports to Turkey reached $157m (€142.9m), or 0.9% of the total, in 2014, while goods imported from Turkey stood at €829.6m, equivalent to around 0.6% of imports.
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