Al-Ahram Weekly | Economy | Building the future

		Al-Ahram Weekly Online 18 - 24 October 2001 Issue No.556
Published in Cairo by AL-AHRAM established in 1875		Current issue \| Previous issue \| Site map

Building the future
THE ESTABLISHMENT of infrastructure projects through build, operate and transfer (BOT) contracts was the theme of Egypt's sixth annual international conference on privately financed infrastructure projects, recently held in Sharm El- Sheikh. Eman Youssef reports
The two-day conference, organised by the Cairo Regional Centre for International Commercial Arbitration, in cooperation with the United Nations Commission for International Trade Law (UNCITRAL), reviewed the experiences of Egypt, Lebanon, India, Bulgaria, Argentina, Jakarta and the Philippines with BOT projects.
In Egypt, investment in BOT projects during 1999- 2000 amounted to $21 billion. Of this figure $3.5 billion went to the transport sector, said Mohamed Khatab, vice president of the General Authority for Transport Projects Planning.
As part of Egypt's privatisation programme, which began in 1991, the government has attempted to increase the involvement of the private sector in the expansion and upgrading of infrastructure.
Within this context, electric power generation was the first sector for which decrees were issued to provide a framework for BOT projects. According to Fawzia Abu Nema, vice president of the Egyptian Electricity Authority, the authority's plans through 2010 require investment, under the BOT system, amounting to $7.2 billion.
Since the mid-1990s numerous BOT projects to build airports and upgrade their services have been initiated. Among the airports that have benefited from the BOT system are those in Alamein, Marsa Alam and Sharm El- Sheikh.
Recent BOT developments include the first such contract for supplying water in Egypt. Hassan Morsi, vice president of the Engineers Consultancy Group (ECG), said that a Canadian consortium has signed a BOT contract to supply the Suez industrial area and the Tenth of Ramadan Industrial City.
Currently in the conceptualising stage is a project being spearheaded by the Ministry of Transportation to build a highway linking the countries of the region.
Conference participants asserted the need for laws that clearly delineate the responsibilities of local authorities and investors. "No one can be expected to deliver quality services while incurring losses," said Gamal Nassar, professor of engineering at Ain Shams University. He added that companies contracting for a project under the BOT system should have the freedom to implement the project as they see fit so long as they meet the conditions stipulated in the contract.
Farouk Hassanein, economic consultant to the Ministry of Planning and International Cooperation, said that the next 50 years will witness BOT projects in sectors including electricity, transportation, air transport, railways, telecommunications and water utilities.

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