Tourism is touted as the engine driving national development yet airports remain in a sorry state of dilapidation. Amira Ibrahim
investigates plans to upgrade the world's gateways into Egypt
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Clockwise from top left: a miniature model of Cairo airport's terminal three as it will be in 2007; the American salon, part of the latest renovations in Cairo airport; a miniature model of Sharm El-Sheikh's terminal two as it will be in 2007
The janitors making half-hearted efforts at mopping up these hallways must be among the scruffiest in the world. And their lack of enthusiasm typifies the poor quality of service all round. Bathrooms, for example, are a catastrophe unto themselves: leakage is but the least of a string of worries including all the basic elements of hygiene. Welcome to Cairo International Airport.
In spite of both the prominence of tourism on national development agendas and the government's disjointed attempts at tackling the issue, airports across the country continue to lag behind international, including regional, standards. To deal with an increasingly embarrassing situation, in fact, the government has finally called in foreign experts -- German and French management companies are now in charge of operating six major airports.
A month ago aviation authorities signed two contracts with a Turkish and Saudi company to construct Cairo Airport's Terminal Three and Sharm El-Sheikh Airport's Terminal Two, respectively. The first deal -- the result of an extensive bidding process undertaken in accordance with World Bank guidelines -- went to TAV Hol, an increasingly powerful presence on the region's construction scene; an Egyptian public sector company will take part in the process, undertaking, in the official estimates, some 20 per cent of the work required.
With a contract value amounting to LE2 billion, according to Aviation Minister Ahmed Shafiq, World Bank loans have been requested and granted for the Terminal Three project. "We've also managed to obtain funding to upgrade the old terminal at Cairo Airport," Shafiq declared, "and to construct a brand new terminal at the Sharm El-Sheikh Airport. The loans will be paid back at variable interest over 17 years, he added; they are to be reviewed every six months.
For his part Mustafa Sinie, executive manager of TAV Hol, told Al-Ahram Weekly that work commenced on the project early last December after the contract was signed. Add a 900-day construction schedule and the terminal should be complete by 22 May 2007. "Under the contract, we are committed to completing construction works and providing communication and service facilities within 30 months," Sinie elaborated. "But we are determined to have the job completed one month earlier. That, if you like, is our own personal challenge as a company."
The new terminal, he detailed, will consist of two arrival and departure halls as well as a transit hall; it is designed to accommodate up to 15 aircraft at any one time. Also planned, in a second, later phase, is a new runway with provisions for the latest A-380 aircraft and 34 more remote aircraft. According to Shafiq, Terminal Three will enlarge the capacity of Cairo International Airport by 11 million passengers per year, bringing it up to an annual total of 20 million.
The Sharm El-Sheikh bid went to the international Saudi contractors, the Bin Laden Group -- a similar, $66,6 million project to be completed in 550 days (18 months); it should enlarge the airport's capacity up by four million passengers a year, bringing it up to seven million.
"The contract," Yehya Bin Laden, the group's executive manager, explained, "reflects the World Bank's confidence in our abilities, with 70 per cent of the contract value funded by them. Optimal fulfilment of the contract's stipulations is essential for the Egyptian economy and for tourism in Egypt and it is with this in mind that we are determined to do our very best."
Will such plans put an end to the endemic problems besetting Egypt's airports, however, the most important of which, by far, remains the Cairo International Airport?
Once the largest airport in the region, neglect and a consistently piecemeal approach to resolving problems have left this vital venue looking not only old-fashioned but seedy. Established in 1963 to replace the old Heliopolis airport, located at Haikestep east of Cairo, it initially consisted of one arrival and departure hall and two runways with an annual capacity of five million passengers. In response to a 55 per cent rise in air transport rates in the 1970s, a second hall was constructed in the period 1977-79, and a third added in 1980. As the rate went up again in the 1980s, the necessity of a second terminal made itself felt, and Terminal Two came into being with a runway, a transit hall and two arrival and departure halls serving 3.5 million more passengers a year. Not until last year was a full- scale renovation project put into motion. A LE86 million deal, it provides for transit and arrival halls as well as the Terminal One car park and the Terminal Two domestic flights hall.
"Plans for the first and second terminals include 43 projects in total," Major-General Mohamed Fathallah, chairman of the Cairo International Airport Company, announced. "These include reconstruction of the infrastructure -- electricity, drainage and air conditioning. The transit hall has expanded in capacity from 1,200 to 4,500 passengers an hour," he added, "and a new 800-vehicle parking lot was constructed at a cost of LE25 million. To provide a comfortable waiting space for people receiving their loved ones who used to suffer the wait on foot outside irrespective of hot or cold weather, a new LE3.6 million arrival hall was also created."
The overhaul also provides for upgrading the domestic flights Hall Three to international standards and a new road connecting the airport complex to town (to provide an alternative at peak hours). In addition, government officials no longer enjoy free entry or free parking; they are now required to pay for using VIP halls. An LE37 million hall with a capacity of 180-200 passengers per hour has been constructed to service private planes at high fees.
Any cursory visit to the airport will demonstrate that many of these plans are yet to come into being, however, and finding one's way through the labyrinth to which ongoing construction has given rise in the absence of a comprehensive demarcation system is fast turning into a superhuman feat. Baggage carts are dirty and broken, limousine hawkers are still pestering tourists and bathrooms continue to reek.
Will foreign management improve the situation? Aviation policy-makers concede the need for it, anyhow; they say they have the courage and clarity of mind to admit that only foreign management will effectively turn the airport business to both customer satisfaction and profit. Yet critics point up the failure of waste management companies to clean up Cairo and Alexandria as an example of how unreliable this course of action can be.
"Airports today are commercial projects whose performance should always be geared towards profit," Ibrahim Mannaa, head of the Holding Company for Airports, counters. "International studies show that air transport fees make up only 40 per cent of airport revenues, a percentage that is expected to shrink to 20 per cent in the next 10 years," he goes on, eager to justify company policy. "Commercial operations, by contrast, will provide 80 per cent of airport revenues."
Compared to the leasing out of airport management -- a central aspect of both economic policy and airport administration -- construction plans turn out to be but a minor aspect of the process. Last month aviation authorities signed two management contracts, handing over the Cairo International Airport to Fraport AG Frankfurt Airport Services Worldwide and five airports in Aswan, Luxor, Abu Simbel, Hurghada and Sharm El-Sheikh to Aeroports de Paris (ADP). Fraport's principal task is to turn Cairo Airport into a regional hub capable of competing with giant venues like the Dubai Airport, which have managed to draw business away from Egypt. But under the eight-year contract, Fraport is not required to invest in either the Egyptian airport company or the infrastructure of the venue it will be in charge of.
"Having beat renowned competitors from France and Spain is a tremendous achievement for us," Wilhelm Bender, chairman of Fraport's executive board, declared. "In Cairo, our team of experts will be implementing the procedures of Fraport's world-famous know-how, the result of decades of experience managing Europe's leading air transport hub," he went on.
Likewise, with a total annual traffic of 10 million passengers, ADP's five-year contract, effective as of March 2005, is expected to revolutionise the five airports in question. The company has announced that, starting with five managers, it will be represented by no more than three after only three years. Already ADP has established itself managing the Marsa Alam Airport, a BOT venue serving charter and foreign airliners in the Red Sea area -- a task it will have to relinquish as the new contract with the Holding Company does not allow ADP to work with competitors within Egypt. The management will be paid a "limited rate" on revenues as well as salaries.
"We are certain that these international companies will not risk their reputation [by doing a bad job in Egypt]," Mannaa insisted; "they will certainly work hard to maximise revenues -- particularly because the more they achieve, in effect, the more they get in return." At the same time, he pointed out, "we cannot freeze prices while smaller airports impose higher fees," indicating that higher prices will only be imposed once the projects have been completed -- a further incentive for the companies in question to make the best of the opportunity available to them.
Under the contracts, in fact, the companies' principal source of profit is a 9.8 per cent share of the difference in revenue from one fiscal year to the next. They will thus be paid in exact proportion to the success of their mission, as Fathallah went on to explain.
Yet many questions remain unanswered: how exactly will services be priced? Who will set the wages? And how will problems of overstaffing be dealt with? On these and other issues aviation authorities have been suspiciously reticent -- a fact that is all the more alarming in the absence of specific marketing policies even despite the authorities' consistent claims that the situation is under control.
In an attempt to calm fears Fathallah announced that Fraport has no intention of making any of Cairo Airport's 4,000 employees redundant. "Rehabilitation programmes", instead, will help make the most of their abilities. Nor the revenues raised by higher prices go unnoticed: companies are obliged to generate profit-making commercial activities, he added; Fraport will supervise not only Terminal One but the new grand mall to be attached to it, for example.