Government appeals to businesses to execute public service projects at regional conference

Ahmed A. Namatalla
3 Min Read

IFC Regional VP: visible results, transparency a must to earn public, private sector confidence

CAIRO: The Ministers of Investment and Finance (MoI) and (MoF) continued their 2006-launched drive to encourage businesses to enter public-private partnerships to implement infrastructure and public service projects at the inaugural Middle East and North Africa PPP Summit launched Monday.

Speaking to businesses and government officials from across the region and Europe, Minister of Finance Youssef Boutros Ghali said the newly-established PPP Central Unit at the ministry is part of the government s efforts to improve the investment climate and attract more interest from the private sector.

Ghali also said the government is now drafting legislation to regulate its relationship with investors in executing projects.

Since 1991, the private sector has participated in developing 16 infrastructure projects in four traditionally public domains including telecommunication, transportation, irrigation and sewage with $6.2 billion in total investment, according to MoF figures. The numbers lag in comparison to other developing countries over the same period of time. Malaysia, for example recorded 81 projects worth almost $38 billion and the Philippines came in with 78 projects worth almost $32 billion, according to MoF.

The challenge in Egypt, as in other Mena region countries, is changing public and government perception and reliance on the public sector to implement vital projects, Edward Nassim, International Finance Corporation (IFC) vice president for Europe, Africa and the Middle East told The Daily Star Egypt.

Nassim added that the success of PPP projects often relies on the contracts regulating the relationship between the government and businesses.

The government has to make very clear the expected output, the levels of service expected and penalties if contract terms are not met, he said.

Since 1990, about 5 percent of PPP projects globally have been implemented in the Mena Region, compared with 50 percent in South America, according to IFC.

Most importantly for the Egyptian Government to attract private sector interest and change public perception is promoting sectors where private sector interest is already high, such as telecommunications and transportation, so improvement in service-levels can quickly become visible, Nassim said. The government then needs to ensure transparent bidding processes to earn the confidence of businesses and the public, he added.

In February, MoF announced a tender for the construction of 2210 schools to be built throughout the country, estimated in value at LE 200 million. And, in January, the ministry announced it will make available more than LE 7 billion in fresh and sewage water sanitation projects for private sector participation in 2007.

TAGGED:
Share This Article