Egypt seeks private sector participation in airport overhaul
Egypt Ministry of Transportation has embarked on an ambitious drive to revamp its existing 19 airports and build seven new ones within four years’ time. In a bid to meet the needs of the 10 million visitors expected in Egypt annually by 2005, the ministry encourages private sector participation in the airports’ establishment and development.
In the framework of the national scheme, five new airports are to be established in Ain Al-Sukhna, Assiut, Sohag, Al-Wahat Al-Bahariya and Al-Farafra, with a four billion EP ($940 million) investment, Al-Hayat reported. The overhauling of existing airports in Borg El-Arab, Sharm Al-Shaikh, Hurghada, Luxor, Taba and Aswan is expected to take place during the next five years at a cost of LE 5.5 billion, according to Minister of Transport Ibrahim Al-Dumairi.
The private sector’s growing role in Egypt’s transportation sector is directed mainly through Build-Operate-Transfer (BOT) and Build-Own-Operate-Transfer (BOOT) schemes. However, despite the tremendous opportunities for investment in Egypt’s air transport infrastructure, several problems still face the private sector.
The Egyptian Civil Aviation Authority (ECAA) has recently decided to re-offer Sohag and Assiut airports’ construction to investors under the BOT system. The two previous BOT offers failed to generate any interest amongst investors, Al-Alam Al-Youm reported. Official sources now say that two foreign companies have already purchased the prequalifcation booklet for the Assiut airport, although the LE 200 million financing required for the project has not yet been secured.
The government focus on BOT type projects, without diversifying investment methods and without granting the management of other activities within the airport, such as free shops, hotels and restaurants, has been cited as one of the reasons behind the lack of private sector interest. Another problem is the lack of independence enjoyed by the entity responsible for supervision over airport activities.
Nonetheless, some projects have already been advanced to near completion. The Al-Alamein airport, constructed as a BOOT project, is already at an progressive stage in construction and is expected to open in mid-2002. The newly built Marsa Alam international airport received its first landing earlier this month. The first airport in Egypt to be constructed as a Build, Operate, transfer (BOT) project, Marsa Allam costs ran about LE 170 million, reported Al-Gomhuria. — (menareport.com)
© 2001 Mena Report (www.menareport.com)