The big facelift

USAID's most substantial contribution to Egypt -- building and upgrading infrastructure -- will soon come to an end. What will it take to maintain what has been achieved? asks Aziza Sami

Even critics of the United States Agency for International Development concede that it has made a substantial contribution to upgrading of the country's infrastructure. For almost two thirds of the period USAID has worked in Egypt, beginning in 1975, the agency has fina

Although assistance to infrastructure has been the least controversial of USAID's programmes -- due to a recognised need for improvements in this field -- it has come to epitomise the problem of Egypt's dependence on the US through the continued import of goods and machinery in the construction industry and use of the services' of US construction companies.

Not so long ago, in the aftermath of the October 1973 War and before that, during the war of attrition following the 1967 Six Day War, Egypt's infrastructure reflected the burden of the war expenditure on the state. Sewerage systems were inadequate, power blackouts were frequent and making a local telephone call often proved difficult.

The Aswan High Dam -- hailed as symbol of Egyptian-Soviet friendship --was given a touch of Americana, at USAID hands
photo: Mohamed El-Qi'i

Today, due in no small part to funds from USAID, the national energy, water and waste water networks have improved considerably. As one businessman summed up matters in 1979, these systems did not work at all, but now they do.

According to Minister of Energy and Electricity Ali El-Saidi, USAID's work in the power sector focused, from 1979 to 1993, on upgrading the infrastructure of the national power system. The result was that Egypt's power generation capacity increased from 3,800 megawatts in 1979 to 16,150 megawatts in 2001.

For the recently completed upgrading of the High Dam's 12 turbines, USAID gave $140 million. Along with a LE40 million contribution by the High Dam Authority to develop power stations, the dam, according to the authority, now produces 2,100 megawatts, representing an increased capacity of 5 per cent. The upgrading of the turbines has extended their life span by 40 to 50 years.

Abu Sultan, Shubra El-Kheima and Kuraymat are some of the power stations rehabilitated within the context of the USAID infrastructure programme, in addition to the transmission systems in the Governorate of Alexandria. Today, in the domain of power, Egypt is embarking on the development of a regional grid with countries in both North Africa as well as Jordan, Syria and, eventually Turkey.

In the early 1990s, following the initiation of the privatisation programme, USAID agreed to work with the Egyptian government to implement policy reforms to the electricity sector. With USAID's assistance, Egypt's seven power distribution companies were reorganised to be run by a holding company. Beginning in the late 1990s, BOT (build-operate-transfer) projects in electricity were initiated, the first of which was Sidi Krir power plant.

In the water and waste water sectors, according to Minister of Housing Mohamed Ibrahim Soliman, USAID was the largest among many foreign donors. Its projects in Cairo and Alexandria have served a population of some 10 million. Work in water and waste water co the development of a comprehensive plan for water services in Alexandria, the implementation of which is scheduled to be completed in 2002. Once this work is finished, Alexandria will be compliant with the Mediterranean Environmental Protocol's provisions concerning water and sewage.

USAID' Fayoum governorate and the Upper Egyptian governorates of Minya and Beni Suef. Daqahliya governorate, in the Delta, has also benefited from projects for potable water.

Overhauling the infrastructure was a national priority for close on two decades
photo: Abdel-Sattar Youssef

By virtue of projects were useful to Egypt does not eliminate the possibility that they carry "non-financial costs."

Others sture. The question arises: how will the resources needed to maintain infrastructure and extend its services be mobilised?

have commitments in place for power, telecoms, as well as water and waste water to be implemented over a span of two to four years." Towards the completion of power generation and waste water projects by 2005, USAID will contribute $53 million.

Accordin the limited monies available, the main option for the government at present is to procure private sector funding, specifically through BOT projects in the water utilities sector.

Recent USAID programmes for water utilities are directed at making these more cost effective. Consequently, the programmes' focus is on training management of the local authorities to operate in a more market-oriented manner. The Egyptian government is also preparing to submit to parliament a draft law that would provide for the establishment of a regulatory agency for the water and waste water sector and promote private sector participation therein.

In the telecommunications sector, one relatively successful instance of movement towards private-sector-style management has been Telecom Egypt. Slated for partial privatisation, the company holding Egypt's fixed-line monopoly is currently awaiting the opportune moment for its sale. USAID assisted in restructuring Telecom Egypt into a joint-stock company in 1998, converting it from being a state authority to an entity operating on a commercial basis and generating revenues for the state.

Encouraginreaucratic stalling and general economic conditions. All of these issues are becoming more urgent and require serious examination if the private sector is to take on and expand upon what has for so long been solely the domain of the state.

The consumer, too, presents challenges. How will the government impress upon the country's largely limited-income consumers the need to commercialise utilities so as to recover the costs of the services provided?

But ultimately, the major question which imposes itself here and in every other area is: how will national initiatives maintain and capitalise upon what has been -- up till now -- provided by donor assistance?

Recommend this page

F o c u s: USAID in Egypt: 25 years
Perspective	Opinion
Trade-offs and concrete No rubber stamp The big facelift Buying American Time for self-reliance? Reluctant grassroots Learning priorities Greenbacks for a greener Egypt On the block A mechanised pastoral Pushing privatisation Small, but promising Charts	Galal Amin: The price to pay Shafiq Gabr: Give and take Ray Bush: Time to go Mustafa Kamel El-Sayed: What have we done with US aid? Adel Beshai: Eye on the future Gouda Abdel-Khalek: Untangling the strings of aid

Send a letter to the Editor

		Al-Ahram Weekly Online 21 - 27 June 2001 Issue No.539
Published in Cairo by AL-AHRAM established in 1875		Current issue \| Previous issue \| Site map