Egypt inviting private firms to build, run services

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CAIRO: Egypt will rely increasingly on private companies to provide social services and infrastructure through public-private partnerships (PPP) and expects to offer a string of new projects soon, officials said.

The government awarded the first such contract, to build and run a wastewater treatment plant near Cairo, last May and will invite bids for more wastewater plants and hospitals in coming months. They typically involve operating the projects 20 years.

Egypt has also simplified the procedures for public-private partnerships and hopes to enact a law governing the entire process later this year.

In five or 10 years, I see that the PPP will be one of the main tools of developing the infrastructure in Egypt in different sectors, Atter Hannoura, a tendering manager at Egypt s Ministry of Finance, told Reuters.

In May, the New Urban Communities Authority awarded a $459 million contract to build a 250,000 cubic meter per day wastewater treatment plant in New Cairo City to a joint venture between Egypt s Orascom Construction Industries and Spain s Aqualia, a unit of FCC.

The Ministry of Higher Education has invited bids for contracts to build and run two university hospitals and a blood bank in Alexandria, with the deadline for submission in May.

The Ministry of Housing plans to invite bids in March for a 150,000 cubic meter per day wastewater treatment plant in Sixth of October City, a satellite town of Cairo, and another in May to upgrade a 1.2 million cubic meter plant in Abu Ruwash, both on the outskirts of Cairo.

I think the government has gone outside the two sectors it was doing things in. Previously there had been concessions in oil and gas, said Moazzam Mekan of the International Finance Corporation, which has been working with Egypt on the program.

They were very narrowly defined. Now the government wants to do it in education, in health, in roads, in every sector, really, he added.

Egypt is tendering the projects under old laws pending the passage of the new one later this year by parliament.

Lawyers say current laws are restricting the government s ability to attract partners from the private sector.

Hannoura, who works in the Finance Ministry s PPP unit, said: We are using all of the current capacities of the (old) law that will match the transaction. And we ve done it successfully in the first project.

However, the new law, the PPP law, will give us much more opportunity in terms of the procedures of the procurement and will give the different committees a legal authority to monitor things, he said.

Hopefully we can get it (the new law) by June. Practically I think it will be something like the third quarter, Hannoura said.

Egypt plans to invite bids for another seven or eight water plants, a 34 kilometer highway on the northern edge of Cairo, six or seven health centers and hospitals and a large number of schools, Hannoura told the British Egyptian Business Association.

It eventually hopes to award construction of a 77 kilometer railway between Cairo and Tenth of Ramadan City, he added.

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By Reuters
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