Cairo warns of project delays

Four major infrastructure projects delayed in Egypt; cabinet to meet this week to agree new delivery timetable

A cabinet meeting would take place next week to discuss extending deadlines on tenders for five substantial infrastructure projects worth about 15 billion Egyptian pounds. Stephen Lock / The National

Projects in Egypt worth billions of dollars face delays as turmoil in the country takes its toll on the economy, a top government official says.

Rania Zayed, the senior adviser to the minister of economy in Egypt, said yesterday a cabinet meeting would take place next week to discuss extending deadlines on tenders for five substantial infrastructure projects worth about 15 billion Egyptian pounds (Dh9.35bn) until after a new government forms. "We have to talk about the reality of what is going on; this is an interim government that is not staying for the long term. Long-term projects are not there," Ms Zayed said.

In the aftermath of the civil unrest that toppled the former president Hosni Mubarak and his regime, a temporary government will be in place for just six months.

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Ms Zayed said the social unrest and the transition of power in government was hindering the bidding process and investors needed "reassurance" amid escalating political unrest across parts of the Mena region. The five tenders include proposals to build two hospitals, two waste-water plants and a 40km road with five bridges in the capital, if construction goes ahead. They fall under public-private partnerships, where a state service or private business venture is funded and operated through a partnership of both government and one or more private sector companies.

The tender for one of the hospitals proposed in Alexandria is due to close this month, but the government "will definitely extend this", said Ms Zayed.

Submissions for bids on the remaining four projects will fall between May and August but are due to be extended, she said. While local investors such as banks in Cairo are "committed" to projects, it will take much more to convince the international community that infrastructure projects should go ahead, she said. Political instability in the country and a transition of parliamentary power has put a stop to any definite plans to accept submissions for private finance initiative investments by the proposed deadlines.

Nevertheless, a pipeline of 38 projects for education, hospitals, roads, prisons and renewable energy worth US$15bn (Dh55.09bn) in capital costs is also expected to be implemented in the next three years, Ms Zayed said.

In addition, Egypt is planning to raise $5bn of long-term capital financing for projects, she said.