Egypt has led the way in the development of public-private partnerships (PPPs) in the Middle East over the past couple of years. Its parliament approved a PPP law in May 2010, and the PPP Central Unit is working on launching several projects, including hospitals, universities, roads and sewage treatment plants. The current political turmoil in the country now threatens to derail these plans.
The person that has been most actively pushing the PPP agenda in Egypt was Finance Minister Youssef Boutros-Ghali. But he was removed from office by President Hosni Mubarak in late January, during a cabinet shake-up intended to quell the demonstrators calling for regime change.
The head of the PPP Central Unit has since moved to reassure investors, saying that projects will continue on an adjusted schedule and offering government guarantees. Nonetheless, Egypt’s planned programme of 33 PPP projects will now be much more challenging to execute. Until the unrest ends, potential partners and international banks will be wary of putting money into the country.
With Mubarak still unwilling to stand down before September, the unrest could continue for a long while yet, preventing the much-needed projects from going ahead. The irony is that among the myriad reasons for the popular uprising is the dilapidated state of infrastructure in Egypt, which has been deprived of investment for decades.
Unfortunately for the government, just as it was starting to address these shortcomings, the people ran out of patience. It will now be down to a new administration to decide whether PPPs are the best way of developing Egypt’s infrastructure.