Incentives draw foreign capital to mega projects

PUBLISHED : Monday, 23 July, 2001, 12:00am
UPDATED : Monday, 23 July, 2001, 12:00am

Egypt is offering foreign companies investment opportunities worth billions of Egyptian pounds and covering a range of major projects, from infrastructure, petroleum and energy to ports and airports.

According to the Consul-General of Egypt, Aly Galal Bassiouny, the government is wooing foreign investors with attractive incentives such as tax holidays. 'We are offering foreign investors build, operate and transfer (BOT) terms for a period of 99 years,' he said.

According to the General Authority for Investment and Free Zones, the Ministry of Electricity and Energy is seeking investments in electricity and energy projects, while the Ministry of Transportation is promoting private sector participation in projects covering roads, tunnels, the underground metro, river ports and airports. The government is also seeking private capital in communications and information technology, petroleum (oil and gas industries) and pharmaceutical ventures.

Potential investment areas also include drinking water and waste water treatment projects under the Housing Ministry; and domestic waste water and drainage projects, drinking water, sanitation, power, health care, education, communication and youth services.

Of the 10 proposed freeway projects, the Ain Sukhna-Marsa Alam freeway - passing by Cairo, Suez and the Red Sea - will need the largest investment, about 3.52 billion Egyptian pounds (HK$6.93 billion). The mega project covers three main roads: the Ain-Sukhna/Ras-Gharb freeway (180 km plus link roads), the Ras-Gharb/Safaga freeway (230 km plus link roads), and the Safaga/Marsa-Alam freeway (220 km plus link roads). It will also comprise other development projects, toll stations and service projects. Investors will be able to generate revenue through toll fees, advertising, tourism, and mining, agricultural and industrial projects.

Three of the 10 earmarked projects - the Cairo-Ain Sokhna, Helwan-Kurimate and Alexandria-Fayoum freeways - have been privatised under BOT terms. These involve the construction of 404 km of main road and 245 km of link roads at a cost of 1.63 billion Egyptian pounds.

Two other projects - the Cairo-Alexandria-Matrouh road and the Cairo-Ismailia-Port Said projects - have attracted bids that are being reviewed by the government. These require investment of 1.56 billion Egyptian pounds and 540 million Eygptian pounds respectively.

Additional projects to be open for bids include the 180 km Cairo-Alexandria freeway, costing 720 million Egyptian pounds, and the Dairout-Al Farafr freeway, at 1.05 billion Egyptian pounds.

Besides the freeway projects, the government is seeking major investment to fund Cairo's third underground metro line, linking Embaba to Cairo airport, and the Alexandria underground metro linking Abokir east Alexandria and Amria west Alexandria.

Costs for the Embaba-Cairo airport project, now under government study, will be borne by foreign investors.

The 29 km metro link, with 31 stations, will be built in three phases, as with the Alexandria underground metro, which will cover 45 km.

Among the aviation facilities seeking foreign capital are Abu Simbel airport, which plans to increase capacity by 1,500 passengers per hour. The estimated investment is 350 million Egyptian pounds. The El Sokhna airport, to be built in Sokhna city adjacent to the Red Sea, will also require overseas capital. The facility will serve industrial areas and free trade zones.