US Commerce Secretary Promotes Cooperation Source: Middle East Economic Digest, March 6, 2006
U.S. Commerce Secretary Carlos Gutierrez arrived in Cairo on March 1, as part of an eight-country tour aimed at encouraging economic reform and promoting trade between the U.S. and the Middle East. “This trip is a great opportunity to promote the economic side of our relationship with the Middle East and continue to help them in their quest toward freer societies, which includes free enterprise and trade,” Gutierrez said.
Gutierrez met Prime Minister Ahmed Nazif, whose government has pushed ahead with wide-ranging economic reforms since it was installed in July 2004. “I applaud the important measures that have been implemented and hope Egypt will continue along this path of economic reform and trade liberalization,” Gutierrez said. Minister of Foreign Trade and Industry Rachid Mohamed Rachid and Gutierrez on March 2 also signed a memorandum of understanding to reinstall the U.S.-Egypt Business Council.
DoorKnock Mission 2006 Source: The American Chamber of Commerce, March 2006
The delegation from the American Chamber of Commerce in Egypt (link here) traveled to Washington D.C. last week on the Chamber’s 24th annual DoorKnock mission. Composed of 32 chamber members, the mission’s main aim is promoting economic cooperation between Egypt and the U.S. under the theme “Egypt & the U.S. investing in partnership”.
The delegation held numerous meetings scheduled with U.S. administrators and members of the White House and Senate, in addition to representatives of leading think tanks.
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Egypt and South Korea Boost Economic Cooperation Source: Asia Pulse, March 10, 2006; Egypt State Information Service, March 10, 2006
Egypt's General Authority for Investment and Free Zones (GAFI) (link here) and the South Korean Trade Representation Office in Cairo have signed a memorandum of understanding to promote joint investments and trade exchange through the exchange of investment and trade data, Minister of Investment Mahmoud Mohieldin announced on Thursday, March 9.
According to Mohieldin, the South Korean Minister lauded the depth of bilateral ties, expressed happiness over the performance of South Korean investment companies in Egypt and voiced hope that the visit made by South Korean President Roh Moo-hyun to Egypt would further enhance bilateral cooperation.
On the other hand, the Federation of Construction Contractors in Egypt and South Korea also signed a cooperation protocol aiming at encouraging cooperation between Egyptian and South Korean companies operating in the field of construction.
The protocol aims at creating new markets in this domain and exchanging expertise among companies in both countries.
The Egyptian National Research Center (NRC) & the South Korean Industrial Technology Foundation (KOTEF) signed in Cairo on Wednesday, March 8 a memorandum of understanding to enhance cooperation in the fields of science and information.
Some 17 South Korean companies are now operating in Egypt at a total investment value of $7.1 million. In 2005, the volume of trade exchange between Egypt and South Korea reached $800 million.
South Korea is determined to triple its Africa-bound Official Development Assistance (ODA) volume over the next three years.
South Korea's aggregate ODA for Africa, including grant aid and soft loans, totaled $17.04 million in 2004 and is estimated to have grown to $31.86 million last year.
Egypt and Vietnam Sign double Taxation Avoidance Agreement Source: Thai Press Reports, March 14, 2006
Vietnam and Egypt have signed agreements on avoiding double taxation, fighting tax evasion and boosting cooperation in tourism.
These agreements were signed during a visit to Egypt by a Vietnamese inter-ministry delegation, led by Minister of Trade Truong Dinh Tuyen that started on March 4.
The two sides also inked two Memoranda of Understanding on a bilateral information-culture cooperation programme in the 2005-2010 period and a fair-exhibition cooperation programme to promote trade and investment between the two countries.
During the Vietnamese delegation's visits to localities and agricultural and industrial companies, the two sides acknowledged that bilateral relations between the two countries have not yet lived up to their potential and expressed their wish to further promote ties in trade, investment, culture-information, and tourism.
Alex Bank Sale Looms as Cairo Continues to Divest Source: Middle East Economic Digest, March 10, 2006
The Ministry of Investment has announced its intention to invite expressions of interest by the end of March in taking a 75-80% stake in state-owned Bank of Alexandria (BoA) (AmCham Member) (link here). A further 15-20% will be sold through an initial public offering (IPO) following the strategic sale, while the remaining 5% will be offered to the bank’s employees.
Progress on the privatization follows the completion of an audit of BoA in late 2005, divestment of its portfolio of public enterprise non-performing loans (NPLs) to National Investment Bank for LE 6,900 million ($1,202 million) in January and the sale of non-core assets – among them a 33.8% stake in Egyptian American Bank (AmCham Member) (link here), which was acquired by Calyon (AmCham Member) (link here) in February.
BoA is the country’s fourth largest commercial bank and has assets in excess of $6,000 million. Citigroup (link here) is advising on the BoA sale, which is part of a wider process by the government of privatizing state-owned banks.
IFC to Arrange Gippsland Debt Source: Middle East Economic Digest, March 10, 2006
Australia’s Gippsland (link here) has mandated the International Finance Corporation (IFC) (link here), the private sector arm of the World Bank (link here), as lead arranger of the debt for its Abu Dabbab tantalum and tin project.
Under the mandate, the IFC will arrange an estimated $55 million debt facility, made up of an IFC A and an IFC B loan in addition to parallel financing from other sources, including export credit agencies. Debt will make up about 60% of the project’s financing requirements of $90 million, with the remainder to be provided in equity.
Some of the equity might also come from the IFC, which has been given the option to subscribe to $2 million worth of new fully paid shares in Gippsland. In addition, subject to shareholder approval, Gippsland has granted the IFC first right of participation to acquire an additional $3 million equity stake in the mining firm. The Abu Dabbab project calls for the construction of a 2 million-ton-a-year processing plant, a mining fleet, power plant, roads, accommodation units and other infrastructure.
Misr Mops Up Mopco Syndication Source: Middle East Economic Digest, March 10, 2006
Financial close has been achieved on the $255 million syndicated loan facility arranged by Misr International Bank (MIBank) (AmCham Member) (link here) for Misr Oil Processing Company (Mopco) for the construction of a major fertilizer plant in Damietta.
MIBank, which will provide 15.7% of the loan, was the sole lead arranger on the facility and also acted as Mopco’s financial adviser. A total of 11 other banks joined at syndication, including Arab Banking Corporation (AmCham Member) (link here), Arab African International Bank (AmCham Member) (link here), Commercial International Bank (AmCham Member) (link here) and Piraeus Bank (link here).
Germany’s Uhde (link here) is the engineering, procurement and construction (EPC) contractor on the 1,200-ton-a-day (t/d) ammonia and 1,925-t/d-urea facility, which will receive gas feedstock from Egyptian Natural Gas Holding Company (EGAS) (link here). Project completion is due in the second half of 2009. National Societe Generale Bank (NSGB) (AmCham Member)(link here), the local subsidiary of Societe Generale (link here), last year acquired a majority stake in MIBank.
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Egypt and Oracle Ink MoU for Education Solutions Source: Trade Arabia, March 8, 2006
The Government of Egypt recently signed a memorandum of understanding (MoU) with 12 companies in the Oracle Consortium (AmCham Member)(link here) to provide ICT hardware, software, digital content and teacher development to secondary schools.Egypt is the fifth country in Africa to commit to the new partnership for African development's (Nepad) e-Schools demonstration project, and joins Ghana in committing to the project under the auspices of the Oracle Consortium.
The agreement forms part of the Nepad e-Schools demonstration project, a Nepad e-Africa Commission initiative. The project aims to establish six Nepad e-Schools in each participating country and monitor and evaluate their effectiveness in order to inform the broader rollout of the Nepad e-Schools Initiative across Africa.
Implementation by the Oracle Consortium the project will begin at three schools in March 2006. These are: Al Ghorfa al Tejaria Secondary School in Port Said; Sabeeh Secondary School in the eastern province, and Al Wesan Experimental School in Al Giza.
The consortium is led by Oracle, the world's largest enterprise software company, and consists of Mustek (link here), Sentech (link here), Ses Astra (link here), Multichoice Africa (link here), Intel (AmCham Member) (link here), CompuTainer, Learnthings (link here), Fujitsu-Siemens Computers (link here), DHL (AmCham Member) (link here), Xerox (AmCham Member)(link here) and Cambridge-Hitachi (link here).
The aim of the Nepad e-Schools Initiative is to provide ICT equipment, skills and knowledge to primary and secondary school students that will enable them to function in a knowledge economy; to improve health education; to enable teachers to use ICT as tools to enhance teaching and learning; and to provide school managers with ICT skills so as to facilitate efficient management and administration in the schools.
Egypt’s Fixed Line Study Delayed Source: Trade Arabia, March 4, 2006
Egypt will not begin studies on a second fixed-line telephone operator until mid-2008, according to Egypt’s Minister of Communication and Information Technology Tarek Kamel.
Kamel said prices for local calls should be reviewed before a second operator is considered.
'The study of the existence of a second land line operator will not happen until mid-2008,' Kamel said.
Telecom Egypt (link here), which was partly privatized late last year, currently has a monopoly on fixed-line networks in Egypt.
Middle East Operators Crowd Around Egypt’s Third Mobile License Source: Business Monitor International, March 10, 2006
Middle East operators crowd around Egypt’s third mobile license. Those who have publicized their intentions to bid are predominantly based in the Middle East and Africa region.
The UAE's Etisalat (link here) , Kuwait's MTC (link here) and South Africa's MTN (link here) were all quick off the mark in declaring their intentions to bid for the license, which was announced by Egypt's National Telecom Regulatory Authority (NTRA) (link here) on February 19, 2006. Both Etisalat and MTC will present a strong bidding opponent for any operator considering entering the auction, given not only their economic prowess but the degree of success the operators have had over the past year in winning licenses.
However, any local operators wishing to enter Egypt's telecoms market need not fear. All international entrants will be expected to form a partnership with an Egyptian company as part of a prerequisite. Moreover, operators having each paid $25,000 for a specifications handbook on February 21, 2006, will then have to submit their proposals and pay an additional $4.4 million bond guarantee, which has been set for April 17, 2006.
It is expected that at this time, each company will be assessed and must receive a score of 75% to be shortlisted for the auction, which will create a level playing field in terms of having similar technical abilities and expertise.
So far Etisalat has signed a partnership agreement with Egypt's Mashreq Telecom, with the National Bank of Egypt (AmCham Member) (link here) and EFG-Hermes Holdings (AmCham Member) (link here) acting as financial advisors. MTN also announced that it had formed a consortium with Egypt's Raya Holdings (AmCham Member) (link here) and Golden Pyramids Plaza (link here) , with shares of 51%, 20% and 29% respectively.
MTN has one of the strongest interests in the Egyptian market, having previously considered a partnership with Telecom Egypt (link here) a few years earlier regarding a mobile license.
Those who are shortlisted for the auction, which is expected to be an open format where operators sit face-to-face and bid, will have to bring to the table a minimum of LE 2.5 billion, as the opening license fee, while 3% of revenues from the license must go towards the state's coffers. An operator placing the highest bid will be announced the winner receiving a license to operate on the 1800MHz frequency bandwidth, over which it will be able to provide national roaming and number portability. The winning bid could be announced as soon as a month to six weeks after the April deadline.
According to NTRA, 17 companies had purchased request for qualification (RFQ) documents by February 23, with a question and answer session with the client held on March 8. The bid deadline is April 17 but could be extended by up to two weeks if demanded by the bidders.
Telenor Eyes Egypt License Source: Trade Arabia, March 11, 2006
Norway's largest telecoms company Telenor (link here) is considering a bid for Egypt's third mobile phone license, spokesman Esben Tuman Johnsen said.
Telenor has been aggressively expanding its network of mobile subsidiaries outside its Nordic base and already operates in Eastern Europe, Russia, Ukraine, Pakistan and Southeast Asia.
'Egypt is an interesting market with two operators today,' Johnsen said. 'I think the market penetration was about 17% at the end of 2005 so the growth potential is definitely present.'
Vodafone Egypt (AmCham Member) (link here) and MobiNil (AmCham Member)(link here) operate Egypt's two existing mobile phone networks. They had close to 13 million subscribers at the end of December in a country with around 72 million people.
Last month, Telenor said it was looking at entering the Vietnamese mobile phone market.
Johnsen said Telenor was currently weighing up whether to make a proposal to the Egyptian government and would decide by mid-April.
CMI and Skoda Win Kureimat Source: Middle East Economic Digest, March 10, 2006
Under its estimated Euro 30 million ($36 million) portion, CMI will supply and install two triple-pressure HRSGs with reheat and vertical gas path technology. Skoda’s Euro 25 million ($30 million) portion covers the supply and installation of all other equipment. Three other companies – France’s Alstom Power (link here) , Italy’s Ansaldo Energia (link here) and NEM (link here) of the Netherlands – last year submitted bids for the contract.
The client is Egyptian Electricity Holding Company (EEHC) (link here) . Its subsidiary Upper Egypt Electricity Company (UEEC) will operate Kureimat II, for which bids for the contract to supply and install two 250-MW gas turbines are due by an extended closing date of March 28.
The US’ General Electric (GE) (link here) , Germany’s Siemens (link here) and Japan’s Mitsubishi Heavy Industries (MHI) (link here) are expected to bid for the contract. A single 250-MW steam turbine will be tendered separately. Project completion is due in 2008/09. The African Development Bank (ADB) will provide a loan worth $180 million for the project, with the remainder to be provided by UEEC.
The consultant on the project is the local/US Power Generation Engineering & Services Company (PGESCo) (link here) .
Denton Wilde Sapte Wraps Up Egypt’s Largest Private Acquisition Source: AME Info FX, March 14, 2006
Denton Wilde Sapte's (link here) Cairo office has advised Powertek Berhad (link here) on its $360 million acquisition of three Egyptian subsidiaries of energy giant EDF (link here).
The firm advised on all stages of the acquisition process, from due diligence and documentation to negotiation and closing. The deal - Egypt’s largest private acquisition of 2006 - gives Powertek control of 10% of Egypt's total generation capacity through the purchase of Suez Gulf Power and Port Said East Power (each of which owns a thermal power plant) along with their operator, the Egyptian Operating Company.
Malaysian-based Powertek Berhad is a subsidiary of Tanjong plc. It owns and operates three power stations in Malaysia and the EDF deal represents its first entry into the Egyptian market.
Air Cairo Becomes New Middle East Customer for the Airbus A320 Source: Middle East Economic Digest, March 10, 2006; Mena Report, March 9, 2006
Air Cairo, the low-cost carrier 40% owned by EgyptAir (link here), on March 8 announced that it had ordered four new Airbus A320 aircraft, to be delivered in the fourth quarter, in a deal worth about $220 million. The 174-seat aircraft will be powered by CFM56-5 engines provided by US-based CFM International (link here). The planes will be mainly used on Air Cairo’s routes to Europe and within the Middle East. Air Cairo presently has two A321 aircraft on lease from EgyptAir.
Air Cairo currently flies two Airbus A321s - leased from Egyptair - on charter flights to Europe, as well as within the Middle East.
The Airbus A320 Family is the world’s most modern and popular single-aisle airliner product line. It has been ordered by, or is in service with more than 200 customers and operators around the world, and consistently leads in independent passenger and airline surveys. Firm orders for the Airbus A320 Family stand at more than 4,200 aircraft, of which almost 2,600 have been delivered.
Cairo Metro Speeds Up Source: Middle East Economic Digest, March 10, 2006
An award was due on March 13 for the consultancy package on the first phase of line 3 on the Cairo metro project. It was followed a day later by the submission of bids for two of the five construction packages – civil works and electro-mechanical installations. The client on the estimated $1,000 million project is the National Authority for Tunnels (NAT) (link here).
Four consultancy firms – France’s Systra (link here), Japan’s Pacific Consultants (link here), the US’ Parsons Brinckerhoff (link here) and Arup (link here) of the UK – have been technically approved by NAT and are expected to submit commercial proposals for package 1 on March 13, which will be followed by the contract award to the lowest bidder on the same day.
Technical and commercial offers were due to be submitted on March 14 for construction package 1, covering civil works, and package 2, involving electrical installations. Commercial bids will be opened in mid-May.
Bidders have until March 21 to submit technical and commercial bids to NAT for packages 3 and 4, covering signalling and track laying. Commercial offers will be opened on May 21. Suppliers will be able to purchase tender documents for the last package, rolling stock, from March 12, with bids due on June 1.
A total of 25 international and local contractors were prequalified last year to bid for the five packages. The 33-kilometre line 3 will link the western districts of Cairo with the international airport.
Phase 1 involves the construction of a 4.5-kilometer underground section between Abbasiya and Ataba, where an interchange will be built with line 2. It also includes four underground stations, a light repair workshop at Abbasiya and the upgrading of the mainline track between Abbasiya and Shoubra el-Khaima. A French/local team of Systra and Arab Consulting Engineers drew up the initial designs. Construction will take about four years.
Three further phases are planned to be developed over the next 10 years. Phase 2 will continue the line eastwards by 6.2 kilometers from Abbasiya to Al-Ahram in Heliopolis. Phase 3 covers the western section of line between Ataba and Imbaba in Mohandiseen, while the 11-kilometre-long phase 4 involves the last section between Al-Ahram and the airport. Bidders are expected to bring project funding to the scheme.
Germany’s Uhde to Reduce Abu Qir Pollution Levels Source: Middle East Economic Digest, March 10, 2006
Germany’s Uhde (link here) has been awarded the contract to design and build a tail gas treatment unit for the local Abu Qir Fertilizers & Chemicals Industries Company. The project aims to reduce pollution levels at Abu Qir’s world-scale nitric acid plant near Alexandria.
Under the seven-month contract, Uhde will carry out the engineering, procurement, construction and commissioning (EPCC) of the new plant, which will use its proprietary EnviNOx process. The technology has been designed to convert pollutants nitrous oxide (N2O) and nitrogen oxide (NOx) into natural substances nitrogen, oxygen and water vapour.
The process will reduce Abu Qir’s output of N2O by about 3,850 tonnes a year (t/y) and of NOx by 4,500 t/y, corresponding to a carbon dioxide (CO2) reduction of more than 1.1 million t/y.
Austria’s Carbon Projektentwicklung (link here) is advising Abu Qir on implementing the project, which comes under the UN’s clean development mechanism (CDM) programme. Carbon is specialized in funding, implementing and operating CDM projects to reduce a plant’s emission levels.
EMethanex Prepares Shortlist, Targets New Shareholders for Methanol Plant Source: Middle East Economic Digest, March 3, 2006
At least three contractors are seeking prequalification for the engineering, procurement and construction (EPC) contract to build a greenfield methanol plant in Damietta port for Egyptian Methanex Methanol Company (EMethanex). The joint venture partners in EMethanex – state-owned Egyptian Petrochemicals Holding Company (ECHEM) (link here) and Canada’s Methanex Corporation (link here) – are also preparing to bring in new shareholders to take minority equity positions.
Paris-based Technip (link here) , Italy-based Techint (link here) and Germany’s Uhde (link here) with Oslo-based Aker Kvaerner (link here) are understood to have submitted prequalification documents for the contract. A shortlist is due to be announced by the end of April, with invitations to bid to be released at the beginning of May. The estimated $620 million project will produce 1.3 million tons a year of methanol.
London-based Davy Process Technology (link here) is the front-end engineering and design (FEED) contractor on the scheme. Davy and the UK’s Johnson Matthey (link here) will provide combined reforming technology. An agreement with Egyptian Natural Gas Holding Company (EGAS) (link here) to provide gas feedstock for the plant has been concluded. Methanex has agreed to offtake 100% of the methanol output.
Plans are also under way at EMethanex to bring in additional shareholders. Methanex, which has a 76% stake in the project company, is expected to cede 16% of its shares to other Egyptian shareholders. ECHEM, which presently holds a 24% stake, is planned to transfer half its shareholding to EGAS.
Construction of Mega Petrochemical Project Begins Source: Kuwait News Agency, March 6, 2006
A mega petrochemical project was launched on Monday, March 6 in the governorate of Kafr Al-Sheikh with projected investments estimated at $9.5 billion.
The new mega complex would be built in five years, adding that the location was chosen far from the Mediterranean coast to secure the complex from effects of future weather storms.
The authorities have declared plans for 10 petrochemical projects, to be executed within the coming 20 years, with a projected goal of putting out up to 15 million tons of products per year, valued at $7 billion.
These ventures will meet all domestic needs, in addition to three billion dollars of projected earnings from exports.
EGPC Partners with Private Sector for New Oil Refinery Source: Business Monitor International, March 1, 2006
State-controlled Egyptian General Petroleum Company (EGPC) (link here), which accounts for the bulk of Egypt's refining capacity, is planning on building a 130,000 barrels per day (b/d) oil refinery in conjunction with Egyptian private sector investors to the tune of $1billion.
Egypt already possesses nine refineries, processing a combined total of around 726,000b/d. The most recent of these refineries is the 100,000b/d Middle East Oil Refinery in the coastal city of Alexandria, which went on-stream back in 2001.
The proposed private-public sector refinery is part of a greater oil ministry plan to build five new refineries in total. In the meantime, however, refined products export volumes are expected to fall steadily as domestic consumption rises. Indeed, while output at the Middle East Oil Refinery had initially been destined for export markets, the products are now sold in the local market.
IOC Eyes Exploration, Refinery in Egypt Source: The Times of India, March 6, 2006
State-owned flagship explorer Indian Oil Corporation (link here), in partnership with Oil India Ltd (link here), has submitted expressions of interest for exploration in the East Gazalat and Obeiyed concessions of Egypt as part of its plan to secure crude and gas supplies by diversifying into the upstream business.
The company is also believed to be eyeing a refinery project in that country which could require an investment of up to $1 billion.
Indian Oil is ready to spend up to $2 billion alone, or $3 billion in consortium with Oil India, for building up a profile as an exploration major.
The money is to be spent on acquiring either a small exploration firm with fields that are already pumping oil/gas or exploration acreages. It is talking to several companies for a possible buyout.
FLSmidth Wins a $71.5 Million Contract in Egypt Source: Reuters, March 11, 2006
Danish engineering group FLSmidth (link here) said it had won a contract worth about 60 million euros ($71.50 million) with Arabian Cement Company for an Egyptian cement clinker production line.
The plant, a 6,000 tons per day facility, will be built near the city of Suez and is expected to be operational in the spring of 2008.
The buyer is a Spanish-Egyptian joint venture company set up for production of cement clinker for export, primarily to Cementos LaUnion (link here), the Spanish partner's clinker grinding plants in Spain, FLSmidth said in a statement.
The order will have a positive impact on FLSmidth's earnings until the plant is done in 2008, the Danish group said.
The Cashier of the Egyptian Holding Company for Natural Gas has issued on February 15, 2006 a request of offers & proposals to participate in the international auction for oil & gas exploration & exploitation concessions in 12 different zones in Nile Delta, North Sinai onshore areas & the Mediterranean. Deadline for the submission of offers is July 16, 2006.
Electromechanical Works
The Cashier of Egyptian Public Authority for Drainage Projects for East Delta Drainage in Ismailiya, has issued on February 17, 2006 a request of offers from eligible bidders for the construction of subsurface [ tile ] drainage networks in the catchment area of Abu Sweer in Ismailiya Governorate serving 3,900 feddans land under funding from World Bank. The specification fee is LE700. The Bid Bond is LE85,000. Deadline for the submission of offers is April 3, 2006.
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