'We have started the negotiation process, and we have a team coming here to consider the deal in the next few weeks,' World Bank director for Egypt Mahmoud Ayub told MEED on 16 May. 'The prospects are pretty high that we are going to be financing this project, with the World Bank supplying about $300 million of the total.'

Designs for a third terminal were first drawn up by NACOof the Netherlands in the mid-1990s, but the project has repeatedly stalled due to lack of funding. Proponents of the scheme have long argued for the construction of an airport capable of handling as many as 40 million passengers a year, to rival the major regional hubs that have been developed in the Gulf. Plans to build a second airport outside Cairo were shelved, however.

Bids were submitted in late 2001 for the airport's expansion, which originally provided for construction of a new runway and terminal. The project would have expanded airport capacity to 11 million passengers a year from 8 million now, although the scope of works will now be reconsidered. Work to date has been limited to an upgrade of terminal 1 and construction of new storage facilities (MEED 17:1:03).

Several other aviation schemes have foundered recently due to political opposition and lack of financing, including the construction of a new terminal at Sharm el-Sheikh airport. The government earlier this year cancelled a contract with a consortium led by the European ABBto build and operate the terminal (MEED 28:6:02).

The decision to press ahead with the Cairo expansion follows a radical restructuring of the aviation sector. In June last year, the newly appointed Civil Aviation Minister Ahmed Shafiq reorganised EgyptAirinto a holding company with six affiliates and replaced its long-standing chairman Mohamed Fahim Rayan, a tenacious opponent of liberalisation, with Abdel-Fattah Kato, who is regarded as a supporter of open skies policies. Shafiq also ended the separate status of the Cairo Airport Authority, placing the capital's airport under the responsibility of the Holding Company for Airports & Air Traffic, which was previously headed by Kato. The authority's head, Abdelaziz Badr, seen as being responsible for the current state of Cairo airport, was dismissed.

Kato has since resigned, to be replaced by Atef Abdel Hamid, former chairman of EgyptAir Maintenance & Technical Affairs, one of the six affiliated companies.