CAIRO: Egypt will invest LE 60 billion in the local transportation sector, announced Minister of Transportation Mohamed Mansour.
This allocation of funds will be used to make improvements in the national road and railway networks, enhance public transportation capacity and develop seaports and river transportation services, Al-Ahram reported.
Priority will be given to the country’s overburdened public transportation networks, including the railway network, with LE 2.2 billion to be allocated for establishing new stations and investing in new infrastructure.
Investments in local seaports will be implemented through 2011 with a total allocation of LE 44 billion to be invested in port facilities in Alexandria, Port Said and Ain Sokhna.
The remainder of the budget will be used to improve river transportation facilities through construction of new ports at Alexandria, Banha and Qena.
The new investments are part of the ministry’s long-term plan to improve Egypt’s transportation infrastructure through new investments and public private partnership (PPP) projects.
Transportation systems can play a vital role in the economic development of any country, and certainly Egypt is no exception. The question is how to support economic development in view of shrinking budgets for services, the minister said.
Special attention has been given to enhancing the role of private companies in infrastructure building, as the government seeks to transition its role as a service provider from producer to regulator.
The general policy of Egypt now is for the government role to shift from production to regulation. We are opening the door to other players, local and foreign, in the production of goods and services, the minister said.
While more legislative reforms will be necessary to ensure the smooth progress of PPP projects into the future, the government has already begun to apply this model to the local transportation sector.
Last week, Prime Minister Ahmed Nazif focused on this issue during a ministerial meeting, emphasizing the transportation sector’s high growth potential and the need to attract local and foreign investments to the sector.
Nazif announced the signing of an agreement with the National Bank of Egypt to establish an LE 10 billion fund for investments in transportation as a first step towards attracting new investments to the sector.
During a visit to Madrid in May, Mansour reviewed investment opportunities in the transport sector with Spanish minister of transportation Jose Blanco Lopez.
Mansour and Lopez discussed how Egypt could benefit from Spanish expertise in railway development and public transportation as a first step towards cooperation on a new railway line linking Upper Egypt governorates to the Red Sea ports to facilitate tourist movement between Red Sea coasts and archaeological sites in Luxor and Aswan.
Minister Mansour has also sought World Bank funding to help support the expansion of transportation services in the country.
Last month, the ministry announced that an LE 1.5 billion loan was extended to help upgrade the efficiency and enhance the safety of railway services between March 2010 and September 2012.
The loan extends over 30 years with a grace period of 5 years, after which it will be charged an interest rate of 1.5 percent annually.