Given Jordan’s strategically important location at the crossroads of the Middle East, the country’s transport sector is well placed to become one of the most competitive in the region. With more free trade agreements than any of its neighbours, the sector has continued to show growth over the past year despite ongoing regional instability. At the centre of Jordan’s advanced transport infrastructure is the kingdom’s well developed road network, which was estimated to have carried 3.6% more tonnage in 2013 than it did in the previous year.

Further upgrades to the road network are planned for 2014, many financed with development grants from the Gulf Cooperation Council (GCC). With a new terminal at Queen Alia International Airport (QAIA) nearly complete, air freight remained strong in 2013 compared with the past two years. The transport sector continues to post impressive numbers, growing from 10% of GDP in 2010 to roughly 12% in 2013, according to The Jordan Times. The sector also remains a major source of employment in the country, currently providing jobs for approximately 10% of its total workforce.

Jordan is a major player in the Iraqi import trade, with many goods destined for the country traveling through the kingdom’s Red Sea port at Aqaba. Thanks to a slew of progressive initiatives, such as the National Railroad Project, Jordan’s transport sector is responding to rising energy costs in order to continue playing a key role in regional trade flows. The kingdom’s stable political environment and ideal geographical location have undergirded the country’s excellent transport fundamentals.

Strengths & Challenges

Building on this stable political situation, the kingdom is looking for investment of JD2bn ($2.82bn) for a national rail network that will connect the Red Sea port of Aqaba with the Syrian border, as well as to neighbouring Saudi Arabia and Iraq, helping to rebuild the latter’s infrastructure. Jordan remains dominant in the Iraqi import market, but other Gulf countries, including Kuwait, are also rushing into the lucrative sector. Moreover, looking to capitalise on trade with Iraq, plans are afoot to update the kingdom’s energy transport sector in the hopes of opening an oil pipeline connecting Iraq and the port of Aqaba.

At the time of writing, it was unclear how the rapidly deteriorating political situation in Iraq might affect such plans, and indeed the prospects of trade as a whole with Iraq. “Although regional upheaval is not healthy in the long term, it has benefitted Jordan in the short to medium term,” Hussein Al Souob, managing director of AB Maritime, told OBG.

Energy Prices

One of the most pressing challenges currently faced by the industry is the volatility of energy prices. Without the hydrocarbons reserves that underpin the economies of many of its neighbours, Jordan is forced to import 97% of its energy resources, with much of this coming in the form of natural gas from Egypt; however, bouts of political instability in Egypt from 2011 onwards have contributed to a sharp reduction in gas supplies.

To address the resulting gap, Jordan took out a $2bn loan from the IMF in 2012 to purchase more expensive energy resources from other countries. The cost of repaying the loan impacts long-term investment in a range of economic sectors, including tourism and transport. However, recent deals to secure natural gas from eastern Mediterranean gas fields suggest national energy stabilisation may be within reach. Jordan also remains open to foreign direct investment in its transport infrastructure. While the government controls much of the sector, private companies, both local and foreign, are allowed to invest in a range of segments, especially in shipping.

Aside from concerns relating to energy, the ongoing conflict in Syria and the resumption of fighting in Iraq present major challenges for the Jordanian transport sector. Prior to 2011, Syria was a crucial transit point for goods flowing through Jordan from Turkey and Europe destined for points across the Gulf. While trade continues in some capacity, political events have forced a large part of Jordan’s transport trade to shift from overland cargo to air freight. “Jordan requires long-term thinking in order to handle the current challenges to the sector,” Osama Aza, CEO of Premier Transport Technologies, told OBG. “The creation of dry ports along with the national railroad will see Jordan emerge as a central player in a new Silk Road crossing the Middle East.”

Government Role

The Ministry of Transport is the main government body charged with overseeing sector development and facilitating growth, along with providing a regulatory framework for operators. The government body has been instrumental in pushing development for the national railroad, as well as updating infrastructure at key ports and airports.

With oversight by the Ministry of Transport, the government has created two state-owned companies, Aqaba Railway Corporation (ARC) and Jordan Hejaz Railway Corporation (JHRC), to work in the rail segment. In order to oversee air, land and sea transport logistics, the government has also created the Jordanian Civil Aviation Regulatory Authority, the Land Transport Regulatory Commission (LTRC) and the Jordanian Maritime Authority.

Regulatory reforms have had limited effect in making the transport sector more efficient; however, they have made it easier for foreign firms to do business in Jordan. According to the World Bank’s “Ease of Doing Business” index in 2014, Jordan’s ranking remained unchanged from the previous year, at 119 out of 189 countries measured. In the trading across borders subcategory, the kingdom improved its 2013 rank, moving up to 57th in the world. The index cited improved transit times for goods at border crossings, thanks in part to the introduction of advanced X-ray scanners. “The implementation of new shipping terminals, complete with advanced X-ray machines, has helped reduce transit time in Aqaba Port dramatically,” Kareem Naouri, director of business development at the Naouri Group, told OBG. “Expansion of the port facilities will help Jordanian transport companies to remain competitive in the lucrative Iraqi import market.”

Over the past several years, Jordan has updated its public transportation infrastructure in major cities like Amman in order to facilitate movement and ease traffic congestion. According to the LTRC’s last published statistics in 2011, Jordan’s intra-city transport network consisted of 2630 vehicles, of which 586 were small vehicles, 1277 were medium-sized buses and 767 were large buses. Private cab operators run just over 16,000 vehicles. Additionally, companies, universities and schools accounted for 10,141 private transport vehicles in 2011.

Road Infrastructure

Jordan enjoys advanced land transport infrastructure that provides vital trade connections with the Gulf region, Syria and Iraq. The kingdom’s highway network includes 2878 km of primary roads and 4325 km of secondary roads, according to the most recent figures from the Ministry of Transport. These highways connect the kingdom to its seven land borders at Al Karama (Iraq), Prince Muhammad Bridge (Israel), Sheikh Hussein Bridge (Israel), Omari (Saudi Arabia), Al Mudawara (Saudi Arabia), Jaber (Syria) and Jordan Valley Crossing Point (West Bank). As part of a programme to upgrade roads, the Ministry of Public Works and Housing began work on a 25-year plan for the country’s roads in 2002. In 2013, work accelerated on the plan, specifically in the southern areas of the country. Jordan and Saudi Arabia signed new agreements to update the infrastructure on several key highways connecting the kingdom with its southern neighbour in 2013 and 2014. The central highway linking the Jordanian city of Zarqa with the Jordanian-Saudi border at the Omari crossing point will see $155m in joint investment to update infrastructure. Funds for the project stem from previously signed deals between Saudi Arabia and Jordan designed to boost transport projects in the kingdom.

Additionally, Saudi Arabia provided $1.25bn to the $5bn Gulf Development Fund extended to Jordan by the GCC for development projects in the kingdom. The other major contributors to the fund are Qatar, Kuwait and the UAE. Gulf countries have remained particularly interested in contributing to transport projects in Jordan. Qatar, for example, has earmarked mas much as 10%, or around $125m, of its contribution towards transport projects.

The most important highway in the kingdom links the port city of Aqaba with Iraq, given the high volume of transit trade destined for Iraq from the Red Sea. Jordan has encountered difficulties over the past several years with securing agreements that will facilitate the movement of cars across the border into Iraq. With a fresh outbreak of violence in Iraq, bureaucratic issues at the Jordanian-Iraqi border, such as the time necessary to issue visas for business purposes, will persist in 2014. However, demand for import trade is not likely to slow down, given Iraq’s dependence on foreign goods.

Airport Extension

Among the most significant projects currently under way in the kingdom is the Amman airport road extension. The four-year project, valued at $100m, was conceived by the Greater Amman Municipality back in 2007 and aims to develop one of the kingdom’s most important corridors connecting Amman’s QAIA with the greater municipal area of the capital. While the highway project has sparked an ongoing debate about the layout of the city of Amman, investors remain convinced that the costs will be justified by the benefits of more integrated transport. The international furniture company IKEA has already taken advantage of the road with a new outlet located just outside Amman.

With financial assistance from the UN High Commission for Refugees, Jordan also renovated a 25-km road in the Syrian border region near Ruweished in early 2014. The road, which opened in February of 2014, will facilitate greater transport links between the Azraq refugee camp, which currently houses more than 55,000 refugees, and the rest of Jordan. Various projects have also been launched along the kingdom’s lengthy border with Syria that have aimed at enhancing the transport infrastructure. This would enable a more efficient flow of international aid deliveries to Jordan’s ballooning refugee population.


Jordan’s extensive road network is an advantage for the kingdom’s trucking fleet. One of the region’s largest, the country had a total of 15,161 operational heavy vehicles in 2011, according to the Ministry of Transport. Ownership of the fleet is spread across a number of individuals, local companies and multinational corporations. Almost two-thirds of the trucks are owned by individuals, and the remaining third by companies and multinational corporations. More than half of the trucks currently operating were manufactured before 2000, with as many as half of these made between 1995 and 1999. This has implications for emissions and safety.

The sheer number of players and lack of a cohesive central authority has led to significant issues within this important sector. As a major employer, a reduction in the work available has translated into unrest. In a bid to tackle this, the Jordanian government agreed to facilitate the creation of a private shareholding company in September 2011. The decision was held up by delays, which resulted in more strikes. In early 2012, the LTRC agreed to allow for the creation of a private company that would organise and divide work among independent operators. However, challenges remain and strikes have affected Jordanian cities such as Maan, where intense competition and falling prices have made for difficult times for the trucking industry. Additionally, subsidy reductions for petrol and diesel have further added to the difficulties faced by the industry. Trucking union leaders have called for the creation of a shareholding company that would establish secure work and fair wages for drivers.

National Railroad

While road systems have been instrumental in the movement of goods, especially from the Red Sea to Iraq, the kingdom is not resting idly, and is currently seeking to develop a national railroad. Jordan has less than 1000 km of rail track, which is divided both along its southern phosphate transport lines and the northern Hejaz railway from Amman into Syria. These lines are operated by the ARC and JHRC, respectively.

After the creation of the ARC in 1972, the state-owned entity constructed lines to transport phosphate from mines located in the country’s southern regions to Aqaba Port. ARC currently operates about 500 km of narrow-gauge track, part of which is rehabilitated from the Ottoman-era Hejaz railway. Between 2m and 3m tonnes of phosphate make their way to Aqaba along these lines every year.

Rail Connections

The northern portion of Jordan’s railway infrastructure includes a 217-km line connecting Amman to Damascus and another 111 km of abandoned lines. Services include a daily Amman-Damascus route and freight trains on request. The continuing violence in Syria, however, has disrupted passenger operations.

While there are plans to capitalise on the potential for a partnership with Turkish State Railways, attention has shifted to the creation of a new railway line connecting Iraq with Aqaba Port. “Our major focus now is the creation of a national railway system,” Naim Hassan, the director of planning and studies at the Ministry of Transport, told OBG. “Not only will this boost tourism in the kingdom but it will allow Jordanian companies to remain competitive in the Iraqi and Saudi Arabian transport markets.”

Jordan plans to build an 897-km rail network that will extend well beyond the currently existing lines in the kingdom. The proposed plan will link the capital with Jordan’s sole seaport in Aqaba, as well as facilitate more international connections with Iraq, Syria and Saudi Arabia. Named the Jordanian National Railway, the project initially focused on a 509-km north-south line that would connect Aqaba with the Syrian border. Estimated construction costs for the line have been set at $2.43bn and would allow Jordan access to Turkish and European markets, thus boosting the EU’s stake in Jordanian transport.

Energy Exports

Additionally, the line would link up with Amman, the phosphate mine at Eshidiya and the industrial city of Zarqa. Given the political crisis in Syria as well as Baghdad’s interest in exporting energy resources through Jordan to third countries, plans are now focusing on a line that would connect Aqaba with the Iraqi border and have the ability to carry energy resources such as crude oil.

Phase two of the railway project, a 290-km east-west line between Zarqa and Iraq, would tie the kingdom’s central industrial areas with the lucrative Iraqi market. A proposed third segment would link to Saudi Arabia with a 91-km line. This portion is expected to provide a main connection point to the GCC market. Government officials hope that a 2750-km line connecting Riyadh with Jordan will be carrying passengers and cargo by the end of 2014. To facilitate the construction of the national railway, the government has divided the project into two components: infrastructure and operations. A state-owned company, Jordan Railway, is responsible for the financing, building and maintenance of the railway network. The government plans to enlist a consortium of companies through a bidding process to oversee the operation of the rail network. The winner would operate rail services on the new infrastructure, buying and maintaining their own rolling stock.

Regional Prospects

The rail network would have enormous benefits for the Jordanian transport sector. Not only would the railroad cut costs and transport times for virtually all goods transported by land, but it would also provide the infrastructure necessary for Jordan to remain a major player in the Iraqi market. “In the transport sector we fear losing our slice of the Iraqi market over the coming years,” Abdulrahman Taleb Ali, marketing manager of T. Gargour & Fils, told OBG. “Without the national railway or the creation of dry ports, it will be increasingly challenging for Jordanian transport to stay competitive in Iraq.” Progress on the national railway’s first phase is under way in the south of Jordan. In November 2012, then-Minister of Transport Alaa Batayneh told delegates at the International Union of Railways Regional Assembly of Middle East High Level Conference that feasibility studies had already been completed and that land acquisition had commenced for the 22.5-km single-track line connecting the phosphate mine at Eshidiya to the existing ARC line.

Jordan’s regional partners have expressed consistent support for the national railway as a way of strengthening regional connections. At a 2014 meeting with Egyptian Transport Minister Ibrahim El Demiri and acting Iraqi Transport Minister Salman Jassim, Jordanian Prime Minister Abdullah Ensour underlined the importance of a railway that connected eastern and western Arab countries. The prime minister noted that the Arab Bridge Maritime Company, established jointly by Jordan, Iraq and Egypt, has seen profits exceeding $1bn since its creation in 1985. Future plans for the company are expected to hinge on Jordan’s national railway. In June 2014, the government allocated $850m, from a GCC development grant, to start vital transport projects in the kingdom, including for the national railway.

Port Facilities

Despite the trimming back of various economic projects in the kingdom in recent years, Aqaba continues to attract investment and plans to expand port facilities promise to provide new opportunities within the transport sector. As Jordan’s only port, Aqaba is also home to the country’s first special economic zone, the Aqaba Special Economic Zone. Shipping activities are divided into three areas: the main, middle and southern port. In 2006, Aqaba’s main port was relocated away from the city centre to an area closer to the Saudi Arabian border to provide access to deeper water. The move also allowed for the development of a mixed-use waterfront neighbourhood and business district. The seven-berth middle port handles containers, cement and livestock, while the four-berth southern port handles primarily oil, timber and industrial products, including chemicals and potash.

The port has been transformed in the past 10 years from a small, dusty and neglected maritime operation into a leading shipping facility. “Given Jordan’s central geographical location and its overall socio-political stability, shipping constitutes a clear area of strength for the kingdom to cultivate and develop,” Jeppe Jensen, CEO of the Aqaba Container Terminal, told OBG. The introduction of special X-ray machines as well as additional capacity has helped address the port’s long-standing Achilles’ heel: cargo waiting times. Another problem hampering the port’s former operations was a disconnect between decision-makers in Aqaba and those located in the capital, Amman. In order to streamline the process and ensure smooth operations in Aqaba, the Jordanian government created a private company, the Aqaba Development Company, in cooperation with the Aqaba Special Economic Zone Authority (ASEZA).

The move appears to have been successful as shown most clearly by the introduction of more efficient cargo transit regulations and better port facilities. The result has been broad-based growth. The port handled 210m tonnes of goods in 2011, more than any year in the past two decades, according to the Ministry of Transport. In 2013, however, this fell to 122m tonnes of goods, a reflection of the political instability in the region.

Energy Hub

Furthermore, the growth at Aqaba Port is moving beyond shipping lines and sea passengers. The ASEZA master plan, established in 2002, includes a plan to transform the main port area into an expanded entertainment, residential, hotel and cruise service centre. In addition to this, Jordan’s second-largest airport, located just outside the Aqaba city centre, is seeing expansion with renovations to its passenger and cargo facilitates aimed at attracting new international flights and business.

Aqaba’s King Hussein International Airport recently unveiled a new 1500-sq-metre arrivals wing. Served by more than 20 airlines, the airport is part of a new tourism push that, coupled with the port complex, has steadily become a primary engine of local economic activity. The government’s bid to raise the profile of Aqaba has resulted in the announcement of several large projects in the port city. For instance, one such project, announced in 2012, is a $1.2bn real estate development scheme run by Ayla Oasis that will expand Aqaba’s tourist and business infrastructure, while improving Jordan’s existing logistics facilities on the Red Sea.

Jordan has sought to capitalise further on the success of Aqaba Port by turning the area into an energy hub. Plans are afoot to update Aqaba’s energy capabilities as a prospective destination for Iraqi energy resources. Jordan has been purchasing discounted crude oil from Iraq over the past two years to help stave off the effects of interrupted natural gas shipments from Egypt. Negotiations are under way to build a new pipeline that would reach from southern Iraq’s oil-rich Basra Province to Aqaba.

Recent moves by Turkey to export oil from Iraqi Kurdistan underline the strategic importance of a new pipeline from Baghdad to the Red Sea. For Jordan, the pipeline would spur development in Zarqa, which currently hosts the country’s only oil refinery. The project will also provide the basis for plans to build an oil refinery in Aqaba and a new export terminal designed for energy resources, especially shipments of Iraqi oil destined for third countries. ASEZA reports that earnings nearly doubled in 2013, rising from $27m to $53m. In the past 10 years, the zone has overseen the creation of more than 30,000 public and private sector jobs, securing more than $12bn in investment and raising Aqaba’s regional and international profile in the field of transport.


With continued local and foreign investment, as well as grants from GCC countries, Jordan’s transport infrastructure looks set to expand on every front. However, the authorities are mindful that a long-term plan needs to be in place to ensure adequate and sustainable transport networks. The IMF approved a $2bn loan to the kingdom in August 2012 to help fund development projects, while in 2013, Jordan’s Ministry of Transport invited technical and financial bids for a consultancy contract to develop a long-term national transport strategy.

Despite these grants, short-term problems continue to persist, making it difficult to raise capital for infrastructure investment and causing delays in railways and public transport projects. However, the success of public-private partnerships at Aqaba Port is helping to solidify Jordan’s position in the Iraqi trade market and provides a potential method to keep other infrastructure projects on track. Continued privatisation, as seen in the expansion of Amman’s QAIA, will help expand existing operations in this sector. Jordan’s underlying strengths, its central location and political stability, are two qualities that will ensure forward movement in the future.