CAIRO: A panel addressing the development of Egypt’s infrastructure, moderated by Euromoney Institutional Investor Managing Director Richard Ensor, conveyed an optimism somewhat belied by the cars crowding the corniche outside the window.
Hisham Fouad, senior advisor to the chairman of the General Authority for Roads, Bridges, and Land Transport (GARBLT), announced LE 10 -15 billion of government funds allocated for transport, but admitted that LE 25 billion would be needed to implement a truly safe and well-managed transport system.
Acknowledging the transport sector as the area of infrastructure most in need of attention, Ensor asked Tim Arnsby of Trowers & Hamlins LLC to compare Egypt to other developing countries. Arnsby’s reply, that traffic in Mumbai, India is worse than Cairo’s, drew several raised eyebrows.
Trying to keep the mood upbeat, Ministry of Investment representative Yasser El-Kady described the “paradigm shift in the government’s approach to infrastructure, specifically 52 flagship projects identified as strategically necessary.
“A profile and visibility study accompanies each project, allowing investors to gain a clear picture of its profit potential, he said.
Ensor quipped that countries all over the world are desperate to attract foreign investment in their infrastructure, and asked Robert Hambleton, chief commercial officer for the Suez Canal Container Terminal, to answer whether Egypt can beat the competition.
Hambleton replied that the Suez Canal Container Terminal is actually “bucking the global trend and indeed continues to attract investors, but admitted that without developing the system for land transportation, investors would begin to look elsewhere.
Vodafone Egypt’s Corporate Affairs Director Khaled Hegazy echoed the problem of land transportation, citing the example of Smart Village, a product of the booming telecom sector that remains crippled by the insufficient means of transporting employees to its location on the Alexandria Road.
Ensor asked Fouad to speak for GARBLT regarding the most effective balance of infrastructure funding, adding, “It seems telecom can take care of itself. Perhaps the government should focus on transport.
Fouad agreed, listing projects to increase the use of railroads and the recently completed Nile dredging project as efforts to ease clogged highways. Hambleton laughed, “We were warned as panel members not to agree with each other but voiced his acquiescence that the railroad system is particularly necessary in order to allow efficient transport of imports and exports.
Ensor asked for the audience members to raise their hands if they were satisfied with Egypt’s transport infrastructure. Only one hand went up. Ensor asked for a show of hands showing satisfaction with the telecom sector; almost everyone raised a hand.
The panel acknowledged that transport infrastructure is stigmatized as unprofitable, making it difficult to encourage investors to share the government’s burden in funding it. El-Kady reasserted the new direction taken by the government’s 52 flagship projects, explaining that the ministries have collaborated to offer more integration.
“For example, an investor that provides funding for a railroad would then receive rights to build something more profitable, such as a fiber optic plant, El-Kady explained.
An audience member asked Hisham to address the lack of infrastructure maintenance. Hisham pointed out that the budget for maintaining roads and bridges has quadrupled in the past five years, but pleaded for patience. “These things take time to show, but the Ministry of Transportation is maximizing maintenance funds.
Ensor asked the chairman of GAFI, seated in the front row, to speak about GAFI’s efforts. “We are working to allow more approvals of new projects by decentralizing. The system has worked in Cairo and we’re spreading autonomous offices to all the governorates.
The panel ended with a question from the audience as to whether the government had shifted the priorities of any of its flagship projects in light of the global crisis.
“No, El-Kady replied, “the projects remain of strategic long-term necessity to Egypt. They address various sectors, from tourism to water treatment to railroads. Egypt’s priorities have not shifted.
