CAIRO: At least four infrastructure projects may have their bid submission deadline extended in Egypt due to the current situation in the country.
The Egyptian government, under the Public Private Partnership (PPP) unit, is pondering the possibility of delaying bidding deadlines for more than a few public infrastructure spending initiatives, which are worth an estimated LE 15 billion ($2.6 billion) and to be completed over the next five years.
“It may be better to wait, but I have another issue: these are high-priority projects and I’m scared to lose the pre-qualified bidders,” Rania Zayed, senior advisor to the Ministry of Finance and director for the PPP Central Unit, told media at the Middle East Project Finance conference in Dubai.
The value of the projects also may increase by about $5 billion, but nothing has been cemented as of yet.
The projects are said to be in the construction of roads, which has a bid submission deadline currently set for May and two hospitals with a bid deadline for March.
They also include two water sewage plants that presently have a bid deadline in August.
The discussion of the PPP projects will be held next week between Prime Minister Ahmed Shafiq and a committee that has been formed.
“We are still working on the process of tendering, but the bid submission deadline needs to be discussed with the prime minister,” Zayed said, as cited by Reuters.
Last year, a law was passed to regulate PPPs in Egypt, which saw the legislation permitting the private sector to construct and operate infrastructure projects as well as bearing the burden of infrastructure’s heavy financial cost with the government only providing periodic funding.
The action of PPPs being implemented existed before the law was passed with tenders being awarded through the Tenders and Auctions Law, but it was said that the new law was put in place as a way to increase the efficiency of the projects being carried out.
PPPs have now gained growing popularity and become widely used in the Middle East as success by Western government’s implementation has been shown over the past couple decades.
Interest from foreign investors have somewhat come to a halt due to the level of uncertainty with the Egyptian government and the derailing of the region’s economic and investment outlook.
According to Beltone Financial, an investment bank, the lack of foreign investors is due to the current environment and “will remain hinged against gaining further visibility of economic policy and stability.”
Beltone also reported that the Ministry of Investment’s data has shown that there are currently 46 projects lined up with an estimated investment cost of $16.137 billion and spans a number of different sectors and will be carried out under the PPP umbrella.
“We’re not expecting the FDI to make a comeback or investors to show interest until there is more stability,” said an economist at a Cairo investment firm.
He added that the investors are watching though and monitoring the situation in the country.
“The delay in the return of investor confidence and a retrenchment in FDI may mean that government finances would be further burdened, going forward, by implementing much needed infrastructure projects across different sectors such as water, health, education and transport,” said a statement by Beltone.