Cairo delays will deter private investors in the water sector

13 October 2009

Cairo is to raise 10-30 per cent of the capital needed for its infrastructure programme from the sector

After a protracted tendering process for the New Cairo wastewater treatment plant project, which finally came to an end in June, the Egyptian government is stepping up its public-private partnership (PPP) programme.

It plans to invite private developers to prequalify for two wastewater schemes, at 6 October City near Cairo and Abo Rawash in Giza, imminently. It will also issue a request for proposals for two university hospital projects in Alexandria within days.

The PPP schemes are a critical part of the country’s economic development plans. The World Bank estimates that Egypt must allocate 5.5-7.0 per cent of its gross domestic product to infrastructure projects if its economy is to continue growing at 7-8 per cent a year. To achieve this target, Cairo plans to raise 10-30 per cent of the capital needed for its infrastructure programme from the private sector.

Egypt’s 32 ongoing and planned PPP projects are worth an estimated $15.2bn. To ensure the future success of the programme, the government must avoid the kind of drawn-out bidding process that delayed the New Cairo project.

The government launched the scheme in December 2007 and finally awarded the contract 18 months later, nearly a year behind the original schedule.

Given that the scheme was a pilot PPP, some delays were inevitable. Now, with one project successfully awarded, the government needs to move forward with greater resolve.

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