Egypt looks to the future with help from UAE
Newspaper Title: the National
Newspaper Number:
Tuesday - 17 February 2015
Cairo // Mega projects including the new Suez Canal Corridor are expected to take centre stage at a conference in Egypt that hopes to draw international investors and showcase the government of Abdel Fattah El Sisi’s new economic vision.
The economic summit, “Egypt the Future,” is scheduled to take place from March 13 to 15 in the Red Sea resort town of Sharm El Sheikh.
The minister of investment Ashraf Salman has said more than 40 private-sector projects are being prepared ahead of the conference, 30 of which, worth an estimated total of US$10 billion to $15bn, will be offered to investors.
According to Alaa Ezz, the secretary general of the federation of Egyptian chambers of commerce Fedcoc and an ambassador for the conference, most of these investment opportunities fall within the energy sector or the master plans of Egypt’s current mega projects.
The Suez Canal Corridor sits prime among these mega projects, along with its accompanying components, namely four ports and logistics zones, two airports, four tunnels beneath the canal, four million acres of agricultural development, 77,000 acres of fish farms and 16,500 acres of industrial zones.
Additional projects include the new Damietta grain storage and manufacturing hub, a mega retail city in the Gulf of Suez, and numerous opportunities in the housing and tourism sectors in particular.
The economic summit was originally proposed by the late Saudi King Abdullah in a congratulatory speech following Mr El Sisi’s election in June. In his speech, King Abdullah extended an open invitation for a “Friends of Egypt” donor conference, calling on assistance for Egypt to “overcome its economic crisis”.
Subsequent collaboration for the summit commenced in August last year. Since then, a ministerial group chaired by the Egyptian prime minister Ibrahim Mehleb along with UAE and Saudi ministers has been meeting at least once a month to discuss the evolving goals and projects of the conference while their respective teams have been gathering daily.
According to Mr Ezz, the outcome of this collaboration in terms of joint investment projects between Egyptian and Arabian Gulf partners will be announced at the conference.
Securing additional Arab investment is a major aim of the summit. Gulf capital has played a significant role in keeping the Egyptian economy afloat in the aftermath of the 2011 January 25 Revolution, particularly following the removal of the former president Mohammed Morsi in July 2013. Since then, commitments from Saudi Arabia, the UAE and Kuwait have exceeded $20bn, consisting of a mix of cash grants, petroleum products, central bank deposits and project aid.
Non-aid investment from the Gulf is also considerable, with the UAE, Saudi Arabia and Kuwait taking the top three places, for the largest investments in Egypt according to Egypt’s state information services.
In advance of the conference, Gulf investors in particular have been pushing for quick dispute resolution and legal assurances that their billions in investments will be secure. Following the January 25 Revolution, a number of Gulf investors faced trial for disputes over privatisation and land sale deals signed with the deposed Mubarak government.
One such long-standing dispute was resolved in November for the Dubai-based Al Futtaim Group. As part of the settlement the conglomerate, which began work in 2008 on the major property development Cairo Festival City, agreed to pay $30.5 million to the government alongside a pledge to invest an additional $700m investment in future projects.
The current Egyptian government aims to settle outstanding cases before the summit in order to boost investor confidence. According to Mr Ezz, a ministerial committee chaired by the minister of justice has been formed to expedite investment dispute resolutions, with 259 out of 395 disputes resolved in the past three months. He adds that an additional committee chaired by the prime minister has been created for settlement of contract disputes, with 14 out of 25 resolved.
