Sunday,23 September, 2018
Current issue | Issue 1272, (26 November - 2 December 2015)
Sunday,23 September, 2018
Issue 1272, (26 November - 2 December 2015)

Ahram Weekly


Al-Ahram Weekly

Supporting Sharm El-Sheikh

Kuwait Airlines will operate direct flights to the Red Sea resort of Sharm El-Sheikh on 1 December in support of Egypt’s tourism sector which has been negatively impacted by the Russian plane crash over Sinai on 31 October, it was announced after Kuwaiti Information Minister Sheikh Salman Al-Hamoud Al-Sabah met with Egyptian Tourism Minister Hisham Zaazou in Cairo this week.

Al-Sabah stated that the initiative had come on orders given by Kuwaiti Emir Sheikh Al-Sabah Al-Ahmed Al-Jaber Al-Sabah to boost tourism in the Red Sea resort. Kuwait’s state carrier already flies to Cairo, Alexandria and Sohag but has offered only seasonal flights to Sharm El-Sheikh.

Following the Sinai crash, Britain and Russia, which send the largest number of tourists to Egypt, suspended flights to Sharm El-Sheikh, saying that a bomb brought down the plane. It is not clear when the flights are likely to resume, and thousands of British and Russian tourists have been pulled out of the city in a significant blow to tourism in one of the highest seasons of the year. As a result, Zaazou said that the number of tourists visiting the resort would not exceed nine million by the end of the 2015/2016, a 13 per cent drop on the previous year.

The Kuwaiti move comes among other initiatives aimed at showing support for the tourism sector in Sharm El-Sheikh, with the government recently holding a cabinet meeting in the resort city. Meetings have also been organised in the city between tourism investors and banks to study the possibility of rescheduling pending debt and helping investors keep their manpower.


Suez Canal revenues down

Revenues from the Suez Canal dropped seven per cent in October year-on-year, according to figures from the Suez Canal Authority, dropping to $449.2 million in October compared to $482.3 million in October 2014. The figure represented a slight increase from the $448.8 million in receipts recorded in September 2015, however.

The Suez Canal, an artificial waterway connecting the Mediterranean and the Red Sea, is one of the country’s main sources of foreign currency along with tourism, oil and gas exports, and remittances from Egyptian expatriates.

Mohab Mamish, head of the Suez Canal Authority, was quoted by state news agency MENA last week as saying that receipts from the canal had been hit by a slowdown in global economic activity and that he expected they would pick up in early 2016. A new canal, parallel to the existing Suez Canal, was inaugurated by President Abdel-Fattah Al-Sisi in August. It is expected to create one million job opportunities and boost revenues from the waterway from $5.3 billion in 2014 to $13.2 billion in 2023.

Cement deals

ASEC Cement, a unit of Qalaa Holdings, has concluded the sale of its holdings in subsidiaries ASEC Minya Cement and ASEC Ready Mix to Misr Cement Qena for a total of around LE1 billion. The sale is part of the Qalaa Holdings strategy to deleverage at both the holding and platform company levels. In addition to the proceeds generated for Qalaa, the sale of ASEC Minya and Ready Mix will result in a total of LE940 million in debt deconsolidated at the ASEC Cement consolidated level.

ASEC Minya Cement is an Egyptian cement producer located in Upper Egypt. It began commercial operations in August 2013 with a capacity of 2.0 million tons per annum. ASEC Ready Mix is a producer and distributor of ready-mix concrete, and the company operates six batch plants in Upper Egypt with production in 2014 reaching 382,000 cubic metres.

ASEC Cement held 46.5 per cent of ASEC Minya Cement and 55 per cent of ASEC Ready Mix. Qalaa and its subsidiary the National Development and Trading Company together own 70 per cent of ASEC Cement. CI Capital Investment Banking was financial advisor and Arab Legal Consultants (ALC) legal advisors to Qalaa on the transaction. Fewer than two weeks earlier Qalaa business unit Gozour had signed a sale and purchase agreement to divest confectioner Rashidi Al-Mizan.

New power plants on track

Egypt has secured the first tranche of some eight billion euros ($8.5 billion) in financing for new power plants to be built by German giant Siemens. A consortium of banks has agreed to supply credit for the Beni Sweif natural gas-fired combined-cycle power plant, the first of three planned plants, a spokesman for Munich-based Siemens told Reuters this week.

The project is expected to start operations in 2016, with full production by April 2018.

The deal with Siemens was signed in June and marked the single biggest order in the company’s history. It is designed to boost Egypt’s electricity generation by 50 per cent and calls for three combined-cycle power plants with a capacity of 4,800 megawatts each plus 12 wind farms. The current capacity of the Egyptian national grid is around 32 gigawatts (GW).

According to the deal, initially agreed upon in a memorandum of understanding announced during the Egypt Economic Development Conference in March, 16.4 GW of capacity will be added to the grid, with 14.4 GW of these from gas power plants and 2 GW from wind turbines.

add comment

  • follow us on