Transport Projects and Investment Opportunities
for the Private Sector
Dr. Ibrahim El Dimeery, minister of transportation, spoke on September
26 at the Cairo Conrad Hotel about current projects to develop Egypts
transportation network and how the private sector can take part
in them. "Transportation systems can play a vital role in the
economic development of any country, and certainly Egypt is no exception,"
El Dimeery said. "The question is how to support economic development
in view of shrinking budgets for services."
The minister outlined the priorities in the plan that the ministry
has been working on for the past two years. The transportation system,
he said, should provide the highest possible levels of safety and
security, while permitting the efficient movement of resources and
products, locally, nationally and internationally. In addition,
expansion of the system should go hand in hand with the governments
efforts to expand the inhabited area of Egypt from the present 6
percent to more than 20 percent in the next two decades.
In the short term, El Dimeery said, the ministrys most pressing
task is to preserve the countrys existing transportation assets
while improving safety and efficiency. Medium-term goals are to
increase capacity and enhance performance, while the long-term strategy
is to add "new capabilities and capacities to address future
demands and competitive requirements."
With the road network, for example, safety can be improved by increasing
the number of divided roads, but in the long run the intention is
to build a new freeway system.
The private sector is sure to play an important role. "The
general policy of Egypt now is for the government role to shift
from production to regulation," the minister said. "We
are opening the door to other players, local and foreign, in the
production of goods and services."
He acknowledged that legislative changes were still needed to open
up investment opportunities and create the basis for "solid
and fair public-private partnerships."
Having clarified the ministrys broad agenda, El Dimeery went
on to give an overview of key projects in the transportation development
plan.
The proposed freeway project is expected to cost LE 20 billion
and take 20 years to complete. Incentives for investors include
collection of road tolls and use of adjacent plots of land.
Plans for the railways include the electrification of the Alexandria-Aswan
line in three phases, at a cost of LE 10 billion over 12 years;
the construction of a new line from Ismailiya to Rafah for LE 650
million over four years; and a Cairo-Ismailiya line, also serving
some of the new desert cities, for LE 2 billion over four years.
Incentives for investors will include revenue sharing, concession
rights at railway stations and opportunities to use adjacent land.
There is also a three-phase plan to develop a high-speed train
service between Alexandria and Aswan at a cost of LE 15 billion
over 15 years. The upgrading of Egypts roughly 400 railway
stations, meanwhile, is expected to cost LE 20 billion over a 20-year
period, with similar incentives for investors.
The completion of the Cairo Metro network will involve building
four new lines (92 kilometers in total) over the next 30 years,
at a cost of LE 25 billion. Incentives will include revenue sharing
and concessions at metro stations.
The plan for commuter services also calls for light rail lines
from Alexandria to Borg Al Arab (three years, LE 2 billion); Cairo
to 10th of Ramadan City (three years, LE 3 billion); and Cairo to
Sixth of October City (two years, LE 2 billion). Again, incentives
include revenue sharing and concessions at stations.
Maritime transport will benefit from the construction of the East
Port Said terminal (two years, LE 2 billion) and the "Ain Sokhna
2020" port facility (20 years, LE 6 billion), as well as the
improvement of the Alexandria port (three years, LE 1 billion) and
other ports (six years, LE 3 billion). Investment opportunities
include management and operation of port facilities on a revenue-sharing
basis, along with concessions for the utilization of adjacent land.
Construction of new airports is another major part of the ministrys
plan. The improvement and expansion of Cairo International Airport
with the construction of a new terminal will take four years and
cost LE 2 billion, El Dimeery said. The expanded airport should
be able to handle 11 million passengers per year. The long-term
goal, however, is the construction of Mubarak Airport, with the
capacity for another 15 million passengers annually, for LE 2 billion
over four years.
Construction of other new airports in accordance with the National
Tourism Development Plan will cost LE 4 billion over six years,
while improvements to other existing airports will cost LE 5 billion
over five years, the minister said.
According to El Dimeery, the Ministry of Transportation will seek
a balance between local and foreign investors in all of these public-private
projects. The transportation sector holds tremendous opportunities
for investors amenable to "sharing responsibilities, risks,
costs and benefits," he said. "These are the forms of
partnership that suit both government and investor needs."
In the question and answer session that followed, the minister
explained how potential investors are being made aware of opportunities
for BOOT and BOT schemes, partnerships and joint ventures in the
Egyptian transportation sector. He urged his listeners to "let
us know your ideas and offers."
El Dimeery also went into greater detail about how the upgrading
of airports and railway stations could be financed.
As for the possibility of EgyptAir being privatized, the minister
said that the airline would have to be made "more appealing
to investors." For the past year, he said, the ministry had
been working on a five-year plan to restructure EgyptAir with a
view to creating a holding company and segregating the companys
activities into three distinct areas.
The luncheon was attended by more than 320 guests, several of whom
responded enthusiastically to the newly improved set-up of the speaking
platform, flanked by two screens for video and data shows.
SPONSORS:
- Investia Holding Co.
- M.A. Kharafi Group
- Maersk Egypt S.A.E.
- Orascom Construction Industries
- Tecnico Contracting & Trading Co. / MenaRail
- Rafima
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