By Sean Cronin
BOOT-funded roads in Egypt are set to kick off a US $30 billion infrastructure spending plan. Sean Cronin reports.
A newly launched consortium is set to plough US $30 billion (EGP172 trillion) of investment into privately financed transportation projects in Egypt.
The new infrastructure will be built using the BOOT (Build-Own-Operate-Transfer) approach and is expected to provide a work bonanza for contractors, consultants and operators with experience in privately financed construction projects.
Construction Week has learned that planned projects include a tourist railway line linking the resorts of Hurghada, Safaga, Kena and Luxor, as well as several underground light rail lines connecting new cities to greater Cairo.
It is expected to kick-start a wave of construction activity across the country. According to figures quoted by state news agency, MENA, the construction sector grew by a massive 16% in the first quarter of the year while overall economic growth is running at around 5.3% according to the International Monetary Fund.
The introduction of privately financed BOOT projects is expected to add to the construction sector’s growth prospects.
The new consortium is led by National Holding of Abu Dhabi and also includes Abu Dhabi Investment House (ADIH), Gulf Finance House and Global Development and Investments.The $1 billion holding company will invest in developing the country’s transportation infrastructure.
And it will implement projects managed by three Egyptian authorities — the General Authority of Roads, Bridges and Land Transportation, Egyptian National Rail Authority and Port Said Port Authority.
Minister of transportation for Egypt, Eng. Mansour, says: “The transportation sector in Egypt has stirred tremendous enthusiasm among the local and foreign investors and we are confident to draw in more investments to the country.
“There is tremendous interest from the Arab world in this sector recently and we are looking at more partnerships.”It represents the first time the private-public partnerships have come together in Egypt to fund such an ambitious infrastructure programme.
“It is a pioneering initiative and this is the first time public and private sectors have joined hands to pursue development of infrastructure and projects in Egypt,” added Eng. Mansour.
Construction work on the first highways to be built under the new spending plan, could begin within the next six months.“As a financial institution clued in to the economic indicators of the region, we are confident that investments in Egypt will be beneficial to our investors and stakeholders,” says Rashad Janahi, CEO of ADIH.
The new holding company will also spin off subsidiary investment companies focusing on individual projects as it moves ahead with its investment strategy.
The UAE is one of the largest foreign investors in Egypt and Abu Dhabi Investment Authority has invested some $400 million in Egypt, with interests that include telecommunications, cement, agriculture and finance.