Mega sectors and projects | KPMG | EG

Mega sectors and projects

Mega sectors and projects

Mega sectors and projects

Mega sectors and projects

The Egyptian government has shown the resolve to embark on an ambitious investment and development programme in key growth sectors, including transport and infrastructure, building and construction, tourism, telecommunications, renewable energy and development of the Suez Canal Axis. The key development sectors and projects are outlined below, in addition to the promising PPP programme.  

Transportation

The Transportation sector is one of the main drivers of economic development and growth in Egypt, linking production and consumption markets. Egypt’s unique geographic location combined with an expanding infrastructure base is enhancing the country’s position as a key global logistics hub. 


Roads

Roads play a key role in Egypt’s transport network, with 94 percent of Egypt’s
freight using roads. The government estimates that US$8 billion is needed to
upgrade roads in the next five to ten years. 

Ports


The government is reported to be aiming to triple trade handled by ports in Egypt,and has drafted a long-term plan to increase port capacity from 120 million tonnes to 370 million tonnes by 2030. 

Railways

Egyptian railways date back to the mid-19th century. The railway network is crucial foreconomic growth but suffers from a severe lack of investment. During the Euromoney Egypt Conference in September 2014, the co-chairman of the Egyptian National Railways (ENR) announced a US$10 billion investment over 10 years to upgrade and maintain the antiquated railways network, with US$2.2 billion coming from the World Bank. The investment will upgrade the rolling stock, rail infrastructure, as well as training and knowledge transfer.

Buildings and Constriction

The Retail sector is responding to the market demand and has seen significant investment, while the commercial Real Estate sector remains undersupplied. The government’s ambitious PPP programme will further stimulate the Building and Construction sector.

Tourism

Egypt’s Tourism industry is the most diverse and vibrant in the region. It is the largest Tourism industry in North Africa. Tourism is seen as a key pillar for economic recovery, and at its height it contributed 11.3 percent to 2010 GDP.

 Tourism is also a main source of foreign currency for Egypt (about 14 percent). As a labour-intensive service, it employs over 12 percent of the employed workforce.

 

ICT

The Information and Communication Technology (ICT) sector contributes about 4 percent of GDP in Egypt.

As one of the highest growth potential ICT markets in the Middle East, Egypt is already receiving increasing attention from global ICT players, most of which are already working in the Egyptian market.

Renewable energy

Egypt has great natural potential to generate energy from renewable sources, especially wind, solar and biomass. The country enjoys a total annual global solar irradiance of up to 2.6TWh/m and a total annual sunshine duration of up to 4,000 hours. The Gulf of Suez is also comparable to the best sites on the UK's Atlantic coast in terms of wind power potential. 

Public–private partnership (PPP) 

A robust and progressive regulatory framework for PPP projects has been approved. The PPP law has established an independent PPP Central Unit (PPPCU) and mandated it with managing the delivery of all PPP projects in Egypt. PPPCU works closely with international development institutions, including EBRD, IFC and the World Bank to secure funds for PPP projects.

The Suez Canal

 A growing centre for global commerce On 6 August 2015, Egypt completed a historic US$8.6 billion expansion of the Suez Canal, which will increase capacity, allow two-way maritime traffic for the first time, reduce waiting and transit time and create new jobs and revenue. The megaproject represents a watershed moment for the country’s economic aspirations and reinforces Egypt’s role as a major hub for global commerce and trade. In addition, the new Suez Canal Area Development Project (SCZone) will have a transformative impact on Egypt’s economy as a whole. Launched in August 2014, SCZone creates an industrial development corridor along the canal. It is expected to support nearly 1 million new jobs and 2 million new residents as well as turn the region into an innovative, integrated value-added services centre with an international reach.    

  • Conduit for global trade

The 145-year old Suez Canal is one of the world’s most critical waterways. The Suez Canal reduces maritime supply chain routes by nearly 43 percent, or over 4,800 nautical miles. Nearly 10 percent of all global commerce and 416,000 tons of cargo pass through the canal every year.

The revenue hit $3.26 billion during the first seven months of FY14/15, with 10,399 vessels carrying 586.2 million tons of cargo traversing the canal. August 2014 saw the highest monthly revenue in the canal’s history, at $510 million. The project to add asecond 45-mile channel to the canal has involved dredging by six international firms, including Illinois’ Great Lakes Dredge and Dock Company.

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