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Water shortage widens

Despite efforts to end shortages of potable water in rural villages this summer, the problem appears to have spread to new areas. Villages near Ismailiya, districts of Luxor and areas of North Sinai have reported shortages of drinking water.

The Holding Company for Water & Wastewater announced that it was responding to the situation by dispatching 10 water trucks to North Sinai and Ismailiya, and that the company would coordinate with the local councils responsible for operating the water stations. In Luxor, officials have expressed concern that building new water stations could have a negative impact on historic monuments located nearby.

In July, the Ministry of Housing & Urban Development announced that it would implement a plan to address the ongoing shortage of drinking water in some governorates. The plan includes building 33 new water stations and increasing daily water production by 1.5 million cubic liters by next year. The ministry also promised to drill wells and expand the water pumps network, which will take four months to complete. In the meantime, the government has sent water trucks to supply some villages with fresh water.

Public insurance firms set to merge

The government has announced it will merge three state-owned public insurance companies within a year, then prepare the new company for privatization. Minister of Investment Mahmoud Mohieldin said the merger of Al Chark Insurance and Egyptian Reinsurance into Misr Insurance Company aims at boosting the companies’ profitability and enhancing their collective market share.

The three firms control about 70 percent of the local insurance market, which holds net investments of about LE 18.7 billion. The merger, pending its approval by the companies’ general assemblies, is expected to double the paid-in capital of the newly-formed company to reach LE 4 billion.

UAE sets deadline on illegal Egyptian workers

Egypt and the UAE have agreed to set up a mechanism to deal with the issue of some 2,000 illegal Egyptian residents in the Gulf country. The UAE has set September 8 as the deadline for unregistered residents to legalize their status and to avoid punitive measures, including deportation. Representatives of the Egyptian consulate will work with Dubai’s naturalization and residency administration to examine the papers of the illegal residents.

Culture ministry officials in corruption scandal

Two senior Ministry of Culture officials were arrested last month for allegedly taking kickbacks from construction companies restoring the nation’s antiquities. Police arrested Ayman Abdel Moneim, director of the Cultural Development Fund and general supervisor of the Historic Cairo Development Project, and Hussein Ahmed, head of the Nubian Antiquities Salvage Fund, after three contractors claimed they had paid bribes to secure contracts worth around E5 million.

Abdel Moneim had been supervising the restoration of mosques, caravansaries and fortifications in Cairo’s old Islamic quarter. He was also responsible for managing the budget of numerous cultural activities in Cairo, including its international cinema festival. Ahmed was accused of allegedly taking a LE 10,000 bribe from a contractor vying for the Nubian Museum restoration project.

Minister of Culture Farouk Hosni sacked the two officials, and said he welcomed an investigation to determine if a crime had been committed.

Fertilizer shortage afflicts farmers

Farmers have reported an acute shortage of fertilizers due to low prices during the busy summer planting months that led to a huge spike in demand that producers were unable to satisfy. They say black market peddlers also took advantage of the situation by purchasing dwindling stocks of fertilizer, exacerbating the shortage.

In response, the Ministry of Agriculture announced it will purchase an additional 1.6 million tons of fertilizer to be sold on the market. One million tons of fertilizer will come from factories in the free zones and 600,000 tons from the state-owned Helwan Fertilizer Company.

The ministry’s new long-term plan, to be implemented next season, will set stringent measures to prevent black market sales. It will also educate farmers on how to use alternatives to nitrogen-based fertilizer to prevent a future shortage.

Egypt produces 15.5 million tons of fertilizer, and consumes 8.6 million tons. The remainder is exported from factories located in free zones.

Mubarak intercedes in land dispute

A year-long dispute between the Matrouh Governorate and a Coptic church over a 5,000-square-meter plot on the North Coast was resolved last month after President Hosni Mubarak granted ownership of the land to Marina Church.

The church purchased the land five years ago from the Urban Communities Authority, part of the housing ministry. But the legitimacy of the sale was subsequently challenged by Matrouh Governorate. Citing Law No. 34 of 1979, the governorate claimed the governorate has the sole authority to buy and sell land within its jurisdiction.

The church says it already paid 25 percent of the purchase price when it discovered last year that a 4,000-square-meter portion had been re-sold by Matrouh Governorate to a tourism development company, which had begun developing it. The remaining 1,000 square meters had been allocated to the Marina Shores Protection Unit.

Church leaders provided local newspapers with documents from the housing ministry that purportedly documented the sale. Matrouh Governorate officials, however, argue that the conflict is over a different 5,000-square-meter plot that the church has requested to purchase, but has not yet received.

Around 500 Coptic protestors clashed with security forces last month when a development company initiated construction and road works on the disputed land. President Mubarak subsequently intervened in the dispute, upholding Marina Church’s claim to ownership of the land.

Survey reveals public’s views on corruption

A recent public opinion poll showed that three-quarters of Egyptians feel that corruption exists in Egypt, while 40 percent say corruption is to blame for economic distress. About 50 percent of people surveyed said they believe the government is serious about fighting corruption.

The nationwide survey, conducted by the Information Decision Support Center (IDSC), was intended to measure public perceptions of corruption and of the government’s efforts to combat it. The survey was based on the responses of questionnaires distributed to 14,000 individuals.

COMESA seeks common stock exchange

Stock exchange heads from the Common Market for Eastern & Southern Africa (COMESA) regional bloc have agreed to work towards integrating their securities markets. In June, bourse chief executives from Egypt, Kenya, Uganda, Zambia, Zimbabwe, Mauritius and South Africa met in Egypt to discuss greater unity.

While no definite steps have been taken, the most likely form of integration would be through a wide-area network in which all member stock exchanges would have a common trading platform through the Internet. The setup would allow investors the opportunity to invest in stocks in all member countries.

Tourism numbers, revenues up

Egypt received a record 9.7 million visitors in FY 2006-07, a 13-percent increase over the previous fiscal year, tourism minister Zoheir Garana announced. The visitors brought $8.2 billion to the country, a 14-percent year-on-year increase, preserving tourism’s status as the largest contributor to Egypt’s current account, followed by Suez Canal transit fees, petroleum exports and remittances from Egyptians working abroad.

Garana projected that Egypt would receive 14 million visitors by 2011, by which time it should have 240,000 hotel rooms, compared to 184,000 today. He highlighted tourism’s role as a job creator, pointing out that every five tourists creates one job, directly or indirectly. An estimated 10 percent of Egypt’s labor force works in the tourism sector.

Indian industrialists bankroll petrochem plant

Indian industrial group Reliance will invest $10 billion in the oil refining, petrochemicals and plastics industries. The plan involves building an integrated plant for manufacturing plastics, which would be one of the world’s largest and produce 1.3 million tons per annum. The project would meet local market requirements, with surplus exported to Europe, the Middle East and Africa.

Media officials exonerated

A Giza criminal court has acquitted the former chairman of Egyptian Media Production City (EMPC), Abdel Rahman Hafez, and two former associates, of charges of embezzling and misappropriating millions of pounds worth of funds. Hafez was also acquitted of a charge of mismanagement of public funds.

Hafez was arrested in December 2005 after he and his colleagues, Hamed Bassiouny and Sabry Al-Harani, allegedly sealed deals between the Egyptian Radio & Television Union and minor broadcasting companies in the US without conducting feasibility studies, resulting in the loss of $18.8 million for the state.

Prosecutors also charged Hafez with mismanaging public funds stemming from a contract signed with Ihab Talaat, granting his company – Egyptian Arab Company for Advertising Media – an exclusive concession to be the sole advertiser on local TV channels and Nile TV, in violation of EMPC regulations. The prosecution had also accused him of illegally spending LE 195,000 on 43 personal trips.

Hafez and his two associates were released on August 13, though prosecutors are pushing to appeal the court’s decision.

Orascom mulls sale of Iraqi subsidiary

Orascom Telecom (OT) said it is considering selling its Iraqi subsidiary after failing to secure a long-term contract for mobile operations in Iraq. OT has operated its subsidiary, Iraqna, under a short-term license since the US-led invasion in 2003. But the Egyptian company dropped out of the bidding for a long-term license on offer, claiming the $1.25 billion price tag and 18-percent revenue sharing requirement was too high.

OT has invested nearly $300 million in Iraqna, which operates mobile service in Baghdad and the volatile central area of Iraq. The company claims to have 3 million subscribers. OT will be granted a transitional period during which it can either sell its infrastructure or create a joint venture.

Arbitrators rule in favor of irrigation ministry

An international arbitration committee ruled in favor of the Ministry of Irrigation in its lawsuit against three contractors working on the Naga Hammady Dam in Qena, and ordered the contractors to pay LE 40 million to the ministry.

The dispute was over the price adjustment mechanism in the contract between the ministry and France’s Vinci Construction, Germany’s Bilfinger Berger and Orascom Construction, which stipulated how the contracting parties would account for the rise in cost of construction materials over time.

The dispute arose last June between the ministry and the contracting parties when construction material prices began to rise. The United Nations Commission on International Trade Law (UNCITRAL) ruled in a binding decision last month that the three companies have one month to pay the full amount to the ministry.

The 330-meter-long dam at Naga Hammady will replace a structure built in the early 1990s, and will drive a 64-megawatt hydroelectric plant.

Sugar self-sufficiency on the horizon

New investments are intended to decrease the gap between sugar consumption and production. Minister of Investment Mahmoud Mohieldin announced last month that a new sugar refinery in the western Delta will come online next February, adding 125,000 tons of raw sugar to the country’s production capacity. The new plant in Noubariya will also produce 50,000 tons of molasses.

A separate contract was signed to build another sugar production line at a plant in Daqahliya province in the eastern Nile Delta, also with a capacity of 125,000 tons a year.

Egypt produced 1.5 million tons of sugar in FY 2005-06. Sugar consumption currently exceeds production by about 800,000 tons per year, but the gap could disappear in FY 2010-11 if per capita consumption in Egypt remains static at the current level of 32.5 kg a year, Mohieldin said. At that level, Egypt will consume 2.4 million tons of sugar this year, and about 2.5 million tons in FY 2010-11.

Meanwhile, officials in Damietta announced that more than 5,000 feddans of sugar beets will be planted in Damietta governorate over the coming three years. The planted areas are expected to yield an average of 20.9 tons of sugar beets per feddan, increasing local sugar production. Egyptian sugar beet output stood at 5.3 million tons last season, a 47-percent increase over the previous year.

Wedding boat sinks on Nile

A ferry carrying a wedding party sank in the Nile off Beni Suef, about 200 kilometers south of Cairo, though no casualties were reported, local authorities said. Hundreds of people were attending a late-night party on the Princess Hidy ferry when it began listing due to the combined weight, quickly sinking after taking on water.

Initial reports that dozens of passengers drowned were incorrect, police said. They said all passengers were eventually accounted for, though there had been some confusion as many of the passengers reported missing had swam to shore and made their way home on their own.

Units installed to detect electrical leaks

Leakage detection units have been installed beneath 14,000 distribution boxes in areas served by the South Cairo Electricity Distribution Company (SCED). The devices are intended to detect current leakage and alert repair crews to problems in electrical lines serving 3.7 million subscribers in the Greater Cairo area. The units are also capable of bypassing faulty electrical sources.

According to SCED officials, the new units will reduce the time it takes for repair crews to respond to electrical problems to under 30 minutes.

Carnivores feel sting of fodder price increases

Prices for meat, fish and poultry have risen by as much as 60 percent ahead of the busy Ramadan season, local papers have reported. Meat prices, which usually hover between LE 14 and LE 28 per kilo, have surged to as high as LE 35 per kilo.

Farmers have attributed the unusually large seasonal price spike to an increase in fodder costs. Maize, for instance, has risen from LE 800 per ton to LE 1,370 since last year, while the price of bran jumped from LE 900 to LE 1,550, and sorghum doubled to reach 1,600 per ton.

Hurghada land dispute resurfaces

A 10-year-old land dispute has resurfaced as former partners of Artoc Development Company are reportedly battling over ownership of a 40,000-square-meter plot of land in the Gabal Harim area of Hurghada. In 1998, a court ruled that one of the now-defunct development firm’s three partners, Shafik Gabr, was the sole owner the property.

Artoc Development Company’s partners, Ahmed Shawky and Tarek Abdel-Fatah Nour, disagreed over the ownership status of the parcel of the land, precipitating the court ruling. The local press has reported that the land is still being fought over by the former partners, a claim Gabr denies.

Gabr, chairman of Artoc Group, recently settled a partnership dispute with UAE-based Emaar Properties after differences emerged over plans to develop real estate projects in Egypt. The two parties have since dissolved the partnership.

Workers stage sit-in at fertilizer plant

Workers at Suez Fertilizers Company staged a second protest and threatened to go on a hunger strike after the demands of their first protest, earlier last month, were ignored. The workers’ demands include writing company bylaws, better pay, safer work conditions and health benefits. The first protest drew 420 workers, and promises of reforms. The second protest saw 320 workers. A spokesperson from the company said that these issues would be discussed in the coming days.

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