Home / About Economy / New Investment Horizons

New Investment Horizons

Region: Egypt
Created: Jan 12, 2010, modified: Jan 12, 2012, overall rating: 0.000
AN IMPRISSIVE ECONOMIĺ°? growth rate thai lopped 7.1% in 2007 and accelerated to 7.5% for the first half of 2007/08 has put new demands on Egypt's infrastructure. The government has consequently stepped up to the challenge by pledging to involve the private sector in every aspect of the eco­nomic reform process.

Not 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.

More recently, the government has tendered for the construction and operation of schools as part of a program aiming to build 2,210 new schools; fresh and sewage water treatment projects in Cairo and Borg El Arab; and billions of dollars in new highway projects that will speed traffic between the nation's north and south, between industrial zones and ports. Tenders for many more projects are in the pipeline.

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.

The increased involvement of the private sector in major initiatives such as these reflects the govern­ment's firm commitment towards up­grading the quality of services and fa­cilities for its citizens.

Your Rating:          

Overall rating: 0.000

Totally voted: 0

Add to bookmarks Leave comment Leave question

Comments

No comments
Login/Registration

Weather in:

Exchange Rates

1 USD = 16.200 LE
1 EUR = 18.040 LE
News