Egypt has great business potential for Dubai Ports, the global marine port operator. But the company is holding back on expansion plans until industrial disputes are resolved, Sherine Abdel-Razek reports Dubai Ports is the third largest marine port operator worldwide. Alone it yields 25 per cent of Dubai's GDP. Operating 60 ports around the world, it has an annual capacity of 55 million 20-foot equivalent units (TEU), a measure used for capacity in container transportation. Its CEO told reporters visiting the company premises last week that if the containers they handled worldwide last year alone were put side by side, they would cover the globe eight times. The company entered the Egyptian market in 2008 when it acquired a 90 per cent stake of Sokhna Port Development Company through a new Egyptian arm, Dubai Ports Sokhna. "We did not consider the immediate yield on our investments when we tapped the Egyptian market amid such difficult time. We eyed the long term yields that we were sure Egyptian port would deliver," said Sultan Ahmed Bin Sulayem, chairman of Dubai Ports. Sokhna is the closest port to Cairo with the capital's 18 million consumers only 120 kilometres away and linked by a modern six-lane highway and extensive rail links. Most of the cargo from the East destined for Egypt is imported via Sokhna. "Egypt has good potential due to its human capital, but businesses and capital need security and safety to grow and thrive," Bin Sulayem added, referring to difficulties the company has been facing due to a lack of security after the 2011 revolution, as well as what he calls the "crippling demands" of emboldened workers organising strikes and protests throughout the last year. A new decision by the Customs Authority obliging the company to examine each container in every shipment, instead of 10 per cent of containers earlier, is also slowing down terminal operations. Last month, Dubai World, the holding company behind Dubai Ports, withdrew its investments in Yemen, another Arab Spring country, after a post-revolution anti-corruption body demanded the renegotiation of terms of a 30-year contract to run Aden and Maala container terminals, a demand that the company found unfair, especially that it had been working in the ports, and injecting investment, for the last four years. "There is no security in both terminals. We don't work with even half our capacity there as the shipping companies refuse to go even to the strategically located Aden Port due to security concerns," explained Bin Sulayem. However, the case is different in Egypt. "Our commitment to this country is immortal. The company has injected $55 million in the port during 2012 to date. We earmarked a budget for future expansions in the port, but we cannot inject it now amid such difficult circumstances." When asked if the company's expansion plans are currently frozen due to tensions following the anti-Muslim Brotherhood tweets of a senior Emirati official, Bin Sulayem said the government separates business from political matters. "Take Iran, for instance. Our country has a lot of political problems with [Iran], but we were told by government officials not to mix politics with business. Thus we now send 1,500 ships to [Iran] every day." Dubai Ports' Egyptian arm witnessed recurrent labour strikes since the January 2011 revolution, with workers demanding larger shares in profits, risk allowances and salaries. Strikes in February closed the port for 10 days. Bin Sulayem pointed out that the company works in countries where there are very strong trade unions, such as India, Australia and Canada, "but in Sokhna port -- and despite the fact that some workers agree we met their demands -- some have demands that we can not afford to fulfil." Representatives of Dubai Ports Sokhna's trade union admit that the management met many of their recent demands. "They gave us our share in 2008, 2009 and 2010 profits, as well as the risk allowance we asked for," said Amin Sadek, a crane operator in the terminal. But "we still want a restructuring in the salaries, to tighten the huge gap between the managers and workers," he added. Commenting on the salaries issue, Bin Sulayem said: "We raised the salaries of the port employees as soon as we became in charge of it. Now, they have full medical insurance for them and their families. The staff in Egypt is among the best paid employees of the company worldwide." Ashraf Eissa, head of the company's trade union, told Al-Ahram Weekly that Bin Sulayem's claim about salaries being among the highest in Dubai Ports' workforce is right, but it is because they take the average salary of all those on the payroll, and this does not reflect the huge gap between managers' income and that of workers in terminals. "We have workers who get LE1,200 per month compared to top managers who get 100 times this salary," said Eissa. However, this is not the pressing problem right now. "Top on our agenda as representatives of the workers is getting our full share in 2011 profits, according to the law," said Eissa. Speaking in Dubai, Bin Sulayem told reporters that the company decided to give the workers a three-month pay bonus as their share in the profits. Eissa said this is not legal, as according to the law the company should not decide the employees' share in profits unless a general assembly meeting approves the budget and decides how much to be distributed. According to the management of the company, it cashed the profits of 2011 to the workers even though the mother company has not decided yet to distribute profits. Eissa and his colleagues believe that they can prove they deserve more than three months' pay in profits if they put their hands on the company's financial results. According to Eissa, Minister of Manpower Khaled Al-Azhari held a meeting last month between representatives of the trade union and the management to settle the dispute, but the latter showed up without any documentation showing the company's financial results. While the financial results of Dubai Ports Sokhna are not available, the holding company reported net profits of $247 million between January and June 2012, up 0.4 per cent on the same period a year earlier. Revenues were $1.53 billion, two per cent higher than in the first half of 2011. The management said that because of protests the capacity of the terminal is decreased, an accusation the workers do not deny. "Yes, we tend to work at a slower pace. We cannot help feeling unfairly treated. This is our right and we have to take it," said one worker who asked for anonymity. Asked if Dubai World would consider investing in new ports in Egypt, Bin Sulayem replied: "Not before Sokhna port works at full capacity and in a way that pleases our shareholders."
