Abu Rawash PPP could set new precedent for Egypt

25 August 2015

The project could show investors that Egypt is willing to work with the private sector on major infrastructure projects

Egypt has finally pushed through the Abu Rawash wastewater treatment plant public-private partnership (PPP) despite years of delays. This serves as an indicator of the country’s renewed willingness to press ahead with major infrastructure and utility projects in partnership with the private sector.

The project, which is being managed by Egypt’s PPP Central Unit, on behalf of the Construction Authority for Potable Water & Wastewater (CAPW), will be new territory for a government that has struggled since the instability caused by the 2011 unrest.

The reality for Egypt is that local banks are short of foreign currency, and the government budget includes a fiscal deficit that can only be alleviated by curbing state spending.

As a result, Cairo is putting a lot of effort into making progress with 19 PPP projects with a combined value of up to £E29bn ($3.8bn), which are due to go to tender soon or are at the pre-feasibility/feasibility stage. Securing private investment and international expertise is vital if Egypt is to deliver on these infrastructure projects.

In order to support the country’s needs, Cairo has said it will cut inflated government employee wages, subsidies and interest payments. The problem remains that these actions have yet to take place, and therefore there is not much money for infrastructure investment.

Concerns over security, foreign currency levels and the convertibility of the Egyptian pound, may well lead to hesitancy with potential investors for Egypt’s infrastructure programme. It is imperative Cairo is able to make swift and successful progress with key projects to set a blueprint for its future schemes.

The Abu Rawash PPP may be just the trailblazing project that Egypt needs to start the ball rolling and show that the government can work effectively with the private sector.

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