UAE Extends its Dominance in Egypt's Port Sector

Egypt has concluded a series of deals with AD Ports and DP World which, taken together, have put the operations and revenue generation from Egypt’s principal ports and maritime logistic services into Emirati hands for the foreseeable future - in return for capital investments and payments up front.

In the latest deal, the Abu Dhabi Ports Group has signed a 50-year agreement covering the East Port Said industrial and logistics zone at the northern end of the Suez Canal, which allows AD Ports to build and operate a new shipping and cruise liner terminal. AD Ports has previously signed a 30-year agreement covering a multi-purpose port in Safaga, midway down Egypt’s Red Sea coast, and a 15-year agreement for two cement terminals in West Port Said and El Arish. AD Ports is also planning for two cruise terminals at Hurghada and Sharm El Sheikh on the Red Sea, and is building an integrated logistics park at the Port of Alexandria.

In 2022, DP World signed a similar agreement covering the port of Sokhna at the northern end of the Red Sea, 25 miles southwest of the canal entrance at Port Suez. With an initial $80 million investment to build a logistics park, DP World is committed to building a second basin and jetty, with liquid bulk facilities, specialist warehousing, a sugar refinery and a livestock handling facility, all linked to a planned industrial zone adjacent. The first phase is already operational. DP World also signed a memorandum of understanding in late 2024 to build a free trade zone in Egypt’s New Administrative Capital.

AD Ports is Abu Dhabi-sovereign owned, and DP World is Dubai-owned, meaning that UAE state entities will have a controlling grip on logistics in Egypt for some time to come. This fits in with the UAE’s strategic aim of dominating trade routes from the Gulf through the Bab el Mandeb to the Mediterranean, a trade route on which the UAE depends for survival. All along this trade route, the UAE has invested in military control, building airfields on Socotra, Perim and Asmara, and forming military alliances with governments and militias controlling the coastline. This strategy also serves a commercial purpose: as of last count, DP World handles about 10 percent of global container capacity, with operations in 34 nations around the world.

Egypt has faced some criticism for indebtedness, for investing in ‘vanity’ infrastructure projects such as the New Administrative Capital, and for favoring military-owned companies in major projects. But for Egypt, concluding agreements such as those with the UAE entities brings capital investment into the country without affecting the formal external debt balance, and in time it will recover control of much-improved port infrastructure. For now, Egypt owes the International Money Fund $11 billion (the second biggest debtor behind Argentina), and its debt-to-GDP ratio at the end of 2024 was 91%. But this was down from 96% in 2023, and was a better ratio than that of the US (98%) or UK (98%).

In the immediate short term, Egypt’s principal fiscal problem is the loss of revenue from the Suez Canal, impacted by Houthi attacks on shipping in the Red Sea. Canal revenues have fallen from $9.4 billion in 2022-23 and $7.2 billion in 2023-24 to an estimated $1.8 billion in 2024-25. The US-Houthi ceasefire is unlikely to restore canal traffic to previous levels for some time. Egypt has invested $8 billion in improving the canal since 2014, and had hoped for a major boost in revenues as a return on its investment.