The Egyptian regime has, on an irregular basis, relied on major national projects which contribute to boosting the economy and the economic development and raise operation rates.
Although some projects failed, the Egyptian dream is still hoping to create a national project. Can the current regime during Al-Sisi’s rule fix the economic growth through national projects?
Since the start of Al-Sisi’s rule in 2014, he stated that national projects are the gateway to providing Egyptians with job opportunities and reviving the economy. This is especially so during a time of political unrest and low security between the 25 January Revolution until June 2013. One of these projects is the New Suez Canal Project, new Road Network Project of 4,400 km, 1m acres from the Land Reclamation Project and the Development of the northwest Coast.
Al-Sisi is working on reviving several old projects, including the Toshka project, the Qattara Depression area for generating energy, and the Golden Triangle for mining in the Eastern Desert. This comes in addition to redefining the borders and the road network. Recently, he announced that a new national project will be built to establish a global logistics centre for storage and trading of grain. The details of the projects are yet to be announced.
Prior to Al-Sisi’s rule, Adly Mansour was appointed interim president following the ouster of former president Mohammed Morsi, but his rule did not witness any national projects since it was a transitional phase. Ousted president Morsi proposed a national project, the Nahda project, but the political unrest and the unclear nature of the programme did not allow him to implement the project.
Morsi had also said that he planned to build national projects, including the development path, projects east of Port Said, development of East and Central Sinai, renewing the irrigation system and establishing 14 cement factories, as well as adopting new policies for the management of resources and assets. However, one year in rule was not enough before the regime was ousted and it was not enough to decide whether he had a national project or not.
New Suez Canal project
In August 2014, President Al-Sisi announced the implementation of the new Suez Canal project, which will be parallel to the original canal, with a 72 km length, and with the aim of developing 67,000 square metres on the banks of the canal, increasing transit to the canal, and transforming the region from a commercial passage to a global logistics centre for supplying transport and trade. The project is scheduled to be implemented within a year instead of three.
Al-Sisi believes that the new Suez Canal is a gate to providing new job opportunities for all Egyptians, improving Egypt’s rank internationally, transforming it to a major commercial axis, and increasing the revenues of the Suez Canal to $13.5bn by 2023.
The Suez Canal development project was previously proposed three times, twice during Mubarak’s rule, during Kamal Ganzouri’s government and then Ahmed Nazif’s. The third time was during Hisham Qandil’s government, during Mohammed Morsi’s rule.
Vice Admiral Mohab Mamish, Chairman of the Suez Canal Authority, said that “the new Suez Canal project opening will be on 9 August, 2015.” Until now, water drilling has reached 11m cubic metres, out of the total 250m cubic metres.
Chairman of Sarie Eldin & Partners Legal Advisors, Hani Sarie Eldin, who is a partner of the agreement for planning the development project of the new Suez Canal axis, stated that the project and what it holds in developing the Suez Canal region is a gate for Egypt to the world as a commercial axis, adding that the implementation rates are getting higher.
The project drilling costs are at $4bn, and it aims to provide one million job opportunities and to reclaim around 4m acres.
The Suez Canal is the fastest marine gate to Europe and Asia. Its revenues are roughly $5bn, and it is an important source of hard currency in the country, which is going through declines in the tourism and the foreign investment sector since the 25 January Revolution.
Sarie Eldin affirmed that the Suez Canal axis is the major national project that will help attract real investments, making a significant shift in the Suez Canal region and providing many job opportunities that will decrease unemployment rates, which are getting higher as a result of the weak recovery of the economy with the political and security unrest. He expects that the general plan for the development of the canal will be completed by Q1 of 2015.
The chairman further expressed his fear that the project would follow all other national projects, which were announced but incorrectly implemented, noting nonetheless that “the project has a time frame and we saw implementation rates that confirm the commitment of the government.”
He also declared that he is working with the government to establish a specialised authority to facilitate the procedures that the investors will go through in the canal region, using a legislative framework separate from the current laws, which will unify procedures and facilitate them, while providing transparency.
“The project cannot fail during this phase. I expect it will be a success because of the current regime’s commitment, as well as the operational procedures that were done to implement it. The project fund and the investment desire are available. The political regime is also supporting it. With all of this it will of course be a success, especially as we are working on creating a legislative framework for the investments in the region, which will fix all past issues,” Sarie Eldin said.
New road network
The government is implementing a new national project for a new road network through establishing the biggest development road network, 24,000 km in length, representing is 10% of the Egyptian road networks built in the 1920s.
The new roads and links rely on the development axes service, with a total cost of EGP 23bn, of which EGP 17bn are for the road network project, implemented by the Ministry of Transport, including 15 roads with lengths of 1,200 km, expected to be completed within a year.
Official cabinet spokesperson Hossam El-Kawish stated that the new road network will connect governorates, help in building new cities and increase the population expansion on Egyptian lands. Expansion rates in Egypt are only at 7% of the total 1m square metres.
El-Kawish said that the expansion will grant space for more Arab and foreign investments, and that the government is now working with the Road Network Authority to build a new road network which will facilitate transportation from one governorate to another, while providing new job opportunities to Egyptians and lowering poverty rates.
Aliaa El-Mahdy, Professor of Economics at Cairo University, pointed out that operational rates are still low and there is no time frame for the implementation of the project, although it is an important project for creating new job opportunities, developing and expanding the land areas to absorb the population density, and providing an opportunity for the largest number of investments.
She also expressed fear that this project might fail, like other projects, as such squandering the state’s capital. She demanded that the Egyptian government set a schedule for the completion of the project through phases.
Minister of Transportation Hany Dahi announced that investments in the new road network are at EGP 36bn, and that it consists of 22 new roads with investments from the public and private sectors, with the implementation of both sectors in coordination with the Armed Forces Engineering Authority.
Executive steps to reclaim 1m acres in 2015 within a national project to reclaim 4m acres: Minister of Agriculture
In August, the government announced a new project to reclaim 1m acres across Egypt within a year, in efforts to fulfil the first steps towards self-sufficiency.
Minister of Agriculture and Land Reclamation Adel El-Beltagy said: “President Al-Sisi set a plan to reclaim 1m acres of land with a total cost of EGP 11bn within a year, while focusing on the quality of work and the speed of implementation so that the people could feel the real life impact”.
An agreement was made with the Ministry of Water Resources and Irrigation stating that the implementation steps of the project will start in 2015, following Al-Sisi’s orders, to reclaim 1m acres of land as Phase I of the national project for reclamation of 4m acres in several regions of Egypt.
The General Authority for Reconstruction Projects & Agricultural Development (GARPAD) pointed out that 12 projects are to be established as part of the reclamation of 1m acres of land, with the announcement of a schedule for each project name, its land area and the source of irrigation, with a total area of 68,000 acres.
The National Service Project Organisation and the Armed Forces Engineering Authority, in cooperation with the Ministry of Water Resources and Irrigation, conducted studies on the reclamation of lands and the capacity of aquifers. The land areas were set for the project through the common technical committee between the two ministries.
The project of 4m acres of land reclamation consists of 3 phases. Phases I and II will reclaim 2m acres, while Phase III will reclaim 2m acres in several locations like Sinai, the North Coast, the Western Desert, New Valley, East of El-Aouinet, Toshka, Halaib, Shalateen, and some areas in Upper Egypt, while specifying land areas to Nubia, according to Agriculture Minister El-Beltagy.
He also added that they are currently looking to appoint the General Holding Company for Land Reclamation for the reclamation of these lands and supplying it with equipment. El-Beltagy said that the private sector will be part of this since it is a main partner in all development projects in Egypt.
Development of the Egyptian Northwest Coast
On 23 August, Prime Minister Ibrahim Mehleb announced the launch of the Northwest Coast Development Project, and its desert hinterland. This project is considered the largest development project in terms of scale.
Mehleb said that the northwest coast area contains different resources. These resources contain Egypt’s hope to accommodate the increase in population over the next 40 years, which is estimated to be about 34 million people. The projects planned within the scheme are estimated to come up with about 11 million jobs, until the year 2052.
The scope of the northwest coast extends from El Alamein to Salloum for a distance of about 500 km. The hinterland extends in depth for more than 280 km, to occupy about 160,000 km2.
Minister of Housing Mostafa Madbouly said that the most important strategic objectives of the northwest development project are achieving a high economic growth rate of no less than 12% a year, and the resettlement of at least 5 million people, and generating about 1.5 million jobs, in addition to the integration of the region into the national and global economy. This will be achieved by increasing the area’s contribution to the GDP from the current 5% to 7%.
Madbouly said that the project also aims to improve the social conditions as well as the living conditions of the local communities. He added that the Human Development Indicator should be at least 77%. Development of infrastructure networks and promoting trade networks between the studied area and the rest of the surrounding provinces is also included in the project according to Madbouly.
Mohamed Farid, who served as deputy of the former minister of investment Mahmoud Mohiuddin, said that the most important elements of any successful national project in general, and the northwest coast development project in particular, is having a road network as the arteries of the development project. The network should support communication between the urban centres of this developmental project and the rest of the republic, especially Upper Egypt. He called on the government to quickly implement the national roads network.
He stated that the northwest area includes multiple patterns and elements to attract beach tourism along the coast for about 400 km west of Alexandria. The area extends to the western border of the republic, with a length of about 90 km west of Alexandria to El Alamein, and 130 km from El Alamein to Ras El Hekma. The next part is also about 130 km long, from El Negaila to Salloum. This last part includes the East and West parts of Marsa Matrouh, which is about 90 km in length.
The Toshka, Qattara Depression and Golden Triangle projects
President Al-Sisi issued a decree to authorise the Minister of Electricity and Renewable Energy to establish an entity entrusted to implement the amended Qattara Depression project following law No. 38 of 1984. The idea is to connect the waters of the Mediterranean by tunnels, an open canal or both to the depression using the level variance between the plateau and its edge on the depression, which is up to 50 metres above sea level.
Fakhry El Fiki, former deputy executive director of the International Monetary Fund, said that the government is serious about implementing the Toshka project, “due to its bad reputation because of the government’s announcement years ago without any progress”. He added that speeding up the implementation of the Qattara Depression and Golden Triangle schemes will contribute to reducing unemployment and reviving confidence in the Egyptian economy, which will help mobilise Arab and foreign investments.
President Al-Sisi has advised Prime Minister Ibrahim Mehleb to revive the Toshka project and exploit investments and money spent on this project over the past years, which amounted to EGP 7bn.
The revival of the Toshka project, as one of the most promising areas to renew hopes of getting out of the narrow valley and expand to agriculturally develop the society, may be followed by industrial and social development.
According to Major General Ismail Gaber, Chairman of the General Authority for Industrial Development, the date of the announcement of the company that will be awarded with the rights to the implementation of the Golden Triangle development project in Safaga, Al-Quseir and Qena should be made early February. He added that the authority has approved the technical studies submitted by the three global alliances; English, Italian, and American. He noted that these studies will be reviewed carefully, and one will be chosen in January.
The Golden Triangle project is located in the Red Sea Governorate in the Eastern Desert. It should be established on an area of 840,000 acres. The project aims to establish a mining, economic, industrial, commercial, agricultural, and tourist area to achieve the development requirements for Upper Egypt.