New Investment Horizons
Region: EgyptNot only is the state encouraging more foreign and inland investment in the country "s burgeoning industrial and ser\ ice sectors, but they have also allowed the private sector to deepen its participation in the economic reform process through a public-private partnership ( PPP) strategy that aims to enhance the quality of services available in the country while simultaneously decreasing the financial burden on the government.
In 2006. the Ministry of Investment initiated a comprehensive PPP promotion strategy, which included the creation of a legislative and institutional framework that will facilitate the execution of major PPP infrastructure projects and encourage more local and foreign investors to partner with the government in priority sectors including water, transportation, health and education.
On the legislative front, the Ministry of Finance is currently drafting new PPP legislation to govern the relationship between the government and the private sector detailing the responsibilities of each side. The law is expected to become final later this year.
On the institutional and capacity building fronts, a joint PPP Unit has been established by the Ministries of Investment and Finance. Sector specific regulatory agencies have also been established to deal directly with various projects that are already in the works.
Between 1990 and 2005. the private sector was involved with PPPs in four infrastructure domains, including telecommunication, transportation, water and sewage, carrying out 20 projects with a total investment cost of US$ 7.5 billion. The telecom sector accounted for the lion's share of investment at US$ 5.27 billion. This was. however, just the beginning of a successful experiment that the government intends to replicate and vastly expand in the future.
In the transportation sector alone, a projected US$ 16.45 billion in public and private investments will target upgrades in railways, roads, ports and Nile transportation during the next five years. According to the Egyptian Ministry of Transportation, US$ 9.14 billion of private-sector investments will go into ports; US$ 5.48 billion will go into building and upgrading roads and US$ 3.66 billion will go into railways. Approximately one third of the total investments will come from the state and the rest will come from private investors.
Foreign companies have already placed sizeable investments into Egyptian ports. Danish shipping and oil group AP Moeller-Maersk signed an agreement with the Egyptian government to double the capacity of its East Port Said terminal by 2011. In October 2007, Dubai port operator DP World acquired a 90% stake in the Egyptian Container Handling Co., located near the mouth of the Suez Canal for US$ 670 million.
In the field of education, the Egyptian Education Initiative (EEI) is a PPP between the government of Egypt, the World Economic Forum's IT member community and multinationals including Cisco, HP, Intel, Oracle, IBM, Microsoft, Siemens and Computer Associates. The initiative supports Egypt's overall education reform efforts and maximizes the potential for a collaborative partnership. The main objectives of the initiative are to improve the development and delivery of education, to raise the quality of teacher training, to develop skills needed for a knowledge society and to provide education to a wider sector of the population.
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