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Shura Council burns
A fierce fire raged through the Shura Council, the upper house of the Egyptian parliament, on August 19. The blaze, which started in the late afternoon, took hours for emergency services to extinguish. Numerous fire trucks, as well as helicopters bringing water from the Nile, worked to bring the flames under control.
The government has ruled out arson, and initial reports indicated that an electrical short circuit was the likely cause. An emergency service staff member was killed in the blaze and at least 12 other individuals required medical attention.
The fire first started on the second floor of the 19th-century structure and subsequently spread to the third. The building’s signature dome emerged from the fire intact, and while there was serious damage, a government committee has said it is possible that the building will be usable by the time parliament reconvenes.
US apologizes for canal shooting
The US has apologized for the fatal shooting of an Egyptian man in the Suez Canal last March. This comes after the US concluded an investigation into the incident. Mohamed Fouad Affifi was killed when the Global Patriot, a boat chartered by the US Navy, fired warning shots at the boat, a small vessel attempting to sell merchandise to ships passing through the canal.
The inquiry pointed to the ship’s early arrival time at the canal as an important reason for the incident transpiring. Because the vessel had to wait, it was approachable by this type of small, merchandising vessel.
The US ambassador in Egypt, Margaret Scobey, said in a statement late last month: “On behalf of the US government, we would like to express our sincere apology and profound sorrow for this tragic accident, and extend our deepest sympathy to the family of Mr. Mohamed Fouad Affifi, who died as a result.”
“We have offered financial assistance to the family of Mr. Fouad Affifi, realizing, of course, that no amount of money could ever compensate his family for the loss of his life,” she said.
While the embassy and the Fifth Fleet of the US Navy did not specify the amount of this compensation, it has been reported that the family received LE 750,000, while also waiving their rights to sue the US.
Visa difficulties discussed
The Ministry of Foreign Affairs summoned the ambassadors of several European Union countries on August 13 to officially complain about the mistreatment Egyptians are often subjected to when applying for visas to these countries. The ministry has received numerous complaints regarding multiple embassies about ill-treatment of Egyptians during the application process.
The ministry also sent the consuls of these embassies a critical memorandum discussing this behavior and questioning the arbitrary nature of the visa-issuance process. The foreign ministry has also recommended that Egyptians avoid certain countries’ embassies. EU member countries have very strict visa requirements, often requesting that applicants supply copies of return tickets, bank statements and proof of employment.
Hyatt resolves alcohol issue
Following the unilateral decision by the owner of the Grand Hyatt Hotel Cairo in April to prohibit the serving of alcoholic beverages in the hotel, these drinks are once again available in the five-star establishment. A compromise was reached last month between the owner, Abdel-Aziz Ibrahim bin Ibrahim, and the operating company, Hyatt International, that will allow the operation of one bar on the hotel’s top floor.
The hotel’s owner will have nothing to do with profits and expenses at this establishment, which will be the responsibility of Hyatt International. Customers at the hotel’s other restaurants will not be able to purchase alcoholic drinks and guests will be unable to find them in their rooms’ mini-bars.
Egyptian hotels with over two stars are obligated to serve alcohol. Following the introduction of the ban, the Ministry of Tourism threatened to downgrade the hotel from five to two stars.
Pyramids fenced in
The area around the Giza Pyramids will be enclosed by a fence over 19 kilometers long equipped with motion detectors and cameras. These and other measures are part of efforts to improve the ancient site by making it more congenial to tourists and increasing security.
Tourists will be required to enter through a new building equipped with multiple gates, X-ray machines and metal detectors. Visitors will also be monitored by the nearly 200 closed-circuit cameras inside the site. These recent improvements are part of a larger $26 million project dating back seven years. Other planned changes include a cafeteria, an enclosed area for camel and horse rides, a visitor center and a book shop.
While the three 5,000-year-old pyramids are a must for tourists visiting Egypt, the archaeological wonders are notorious for harassment by vendors seeking to sell everything from camel rides to trinkets. In FY 2007-08, 12.5 million tourists visited Egypt.
Rice exports set to resume
Egypt lifted an export ban on rice this month, Minister of Trade and Industry Rachid Mohamed Rachid has said. In April, a six-month export ban was put in place in order to divert supplies onto the local market and decrease prices. The ban was then extended until April 2009. Other major rice-exporting countries, including Vietnam and Indonesia, also placed restrictions on rice exports in an effort to reduce the price of rice on their domestic markets.
Egyptian rice farmers produce about 4.6 million tons per year. Local consumption is about 3.2 million tons, leaving 1.4 million tons available for export. Local rice prices have cooled since April, while international prices remain high. Rachid said that Egypt could expect to export about one million tons to foreign markets during the coming crop season, which lasts from September to November.
Bread lines reappear
Bread lines resurfaced in Alexandria last month in a development reminiscent of the bread shortage crisis that struck Egypt earlier this year. Lines in Alexandria materialized after the Ministry of Social Solidarity (MSS) halted the distribution of extra flour quotas awarded to some bakeries producing 10-piastre semi-subsidized loaves – as opposed to the fully subsidized baladi bread that sells for five piastres. The quotas were discontinued to punish those violating the requirement to separate the production and distribution of subsidized bread.
The mandated separation was part of the effort to deal with the shortage of subsidized bread earlier this year, and was specifically an attempt to combat the sale of subsidized flour on the black market. The government also began producing partially subsidized 10-piastre loaves in an effort to reduce demand for the five-piastre bread.
Illegal migrants caught
Officials in Kafr Al Sheikh governorate thwarted the attempt of 36 Egyptians to immigrate illegally to Italy, officials announced last month. Each prospective migrant was to have paid LE 35,000 for the trip – LE 5,000 as a down payment, with the balance to be paid after arrival in Italy. The prosecution is investigating. In November of last year, 21 Egyptians trying to enter Italy illegally, drowned in two separate incidents when their boats capsized off the coast of Italy.
EAgrium dispute settled
Canadian fertilizer company Agrium reached an agreement in August with the Egyptian government settling a dispute that began months earlier over its construction of $1.4 billion nitrogen facility near Damietta. Through an equity swap, EAgrium, Agrium’s Egyptian subsidiary, has acquired minority ownership of a recently completed ammonia-urea plant built by state-owned Misr Oil Processing Company (MOPCO) about one kilometer away from EAgrium’s original site.
Last April, the government shut down construction of EAgrium’s factory amid concerns by local residents about pollution. The factory was to be situated about 5 kilometers from the tourist destination of Ras Al Barr.
Under the agreement, EAgrium becomes a subsidiary of MOPCO and Agrium acquires a 26-percent interest in the combined entity. MOPCO’s new plant will produce 675,000 tons per year of urea, with production expected to begin by the start of the fourth quarter of 2008.
There will be two urea trains added to the facility, which will increase the total annual capacity to approximately 2 million tons of urea. EAgrium’s share of annual production is 175,000 tons of urea until the expansion is complete in 2011, after which it will increase to approximately 525,000 tons annually.
Egypt’s cabinet stated that the area previously allocated to EAgrium will be for tourist projects, rather than industrial ones.
Inflation hits 16-year high
National inflation hit 23.1 percent in July, driven by high food prices, according to the Central Agency for Public Mobilization & Statistics (CAPMAS). The agency releases country-wide inflation figures every two months. The previous figures were 21.1 percent for May and 15.8 percent for March.
Urban inflation in July was 22 percent year-on-year, the highest rate since 1992. Inflation rose 2.2 percent from June until July. In January 1992, inflation was 26.1 percent.
Last month, the Central Bank of Egypt (CBE) raised key interest rates for the fifth time this year. The central bank hiked its overnight lending and deposit rates to 13 percent and 11 percent, respectively.
Tourism rises 25 percent
The number of tourists visiting Egypt climbed more than 25 percent over the previous year to 12.5 million during the 2007-08 fiscal year, according to tourism minister Zoheir Garana. About 9.8 million tourists came in FY 2006-07. Tourist revenue increased 32 percent in FY 2007-08.
Russia now accounts for more tourists to Egypt than any other country, with 1.5 million in 2007, overtaking Britain. Garana says he expects that number to rise to 2 million in 2008.
Cement trial returns guilty verdict
A Cairo court found 20 cement industry executives guilty on August 25 for violating the country’s three-year-old monopoly law. Each executive was ordered to a pay a fine of LE 10 million. The defendants have said that they will appeal the ruling.
The trial, which began in February, was the first court case under the Protection of Competition and Prohibition of Monopolistic Practices Law, No. 3/2005, which was meant to bring Egypt in line with international competition standards. The prosecutor accused the cement executives of conspiring to fix prices for Portland cement in 2005 and 2006. The Egyptian Competition Authority (ECA), the country’s monopoly watchdog, had conducted a 14-month investigation into the case, prompted by soaring cement prices. The ECA concluded that the country’s cement industry was acting as a cartel, in violation of the monopoly law, by fixing prices and restricting production.
OT wins contract in Canada
Orascom Telecom (OT) has won a license for a wireless spectrum in Canada. OT, part of a consortium chosen to create a new Canadian wireless operator, was the highest bidder in every region across Canada, except Quebec. The two-month auction raised $4.25 billion. The consortium is still waiting for final regulatory approval for the wireless license.
Appeal begins of Al Salam ferry verdict
On September 3, a court in Safaga will begin hearing arguments in the appeal filed by public prosecutor Abdel Meguid Mahmud to overturn the acquittal of five of the six defendants in the 2006 ferry disaster case. In late July, a court in the port city of Safaga tried and acquitted three executives from Al Salam Marine Transport, which owned the ferry, along with the company owner and his son, on manslaughter charges. All five individuals were acquitted. The only person convicted was the captain of another ferry for failing to come to the assistance of the sinking vessel. On February 3, 2006, the Al Salam ferry sunk in the Red Sea after an onboard fire broke out, killing more than 1,000 people.
Wheat reserves sufficient
Egypt currently has wheat reserves of 3.8 million tons, Minister of Trade and Industry Rachid Mohamed Rachid said late last month. These reserves should last five months, he added. The General Authority for Supply Commodities (GASC), the government agency responsible for buying wheat to produce subsidized baladi bread, has purchased at least 1.48 million tons of wheat since the beginning of the current fiscal year on July 1.
In FY 2007-08, the authority purchased approximately 6.5 million tons of wheat. Wheat prices hit a record high last February, and have declined since then, although high food prices are still a problem in Egypt, making low-income citizens more dependent on subsidized bread for sustenance. Egypt is one of the largest importers of wheat worldwide.
80-octane fuel seized
Over 15,000 liters of 80-octane gasoline was seized early last month from a gas station in Giza after its owner refused to sell it to potential customers. The value of the seized gasoline was LE 13,680. Police also seized 11,000 liters of 80-octane fuel in Alexandria from two gas stations.
The government hiked prices for other petrol grades last May between 32 and 57 percent, while maintaining the same price for 80-octane gasoline at LE 0.90 per liter. The next cheapest grade is 90-octane, sold at LE 1.75 per liter. As a result, many drivers have switched to 80-octane, making it a more precious commodity. In July, a shortage of subsidized 80-octane gas spread from Greater Cairo to other parts of the country.
Canal revenues up
Suez Canal revenues increased to $490 million in July, a 21-percent year-on-year increase. The number of vessels passing through the canal rose to 1,854 in July, compared to 1,819 in June and 1,761 a year earlier. The canal is an important source of foreign currency for Egypt, along with tourism and oil and gas.
Oil and gas exploration announced
The Ministry of Petroleum aims to commence 14 new exploratory projects located at seven separate sites by the end of this year, it announced last month. It is anticipated that these plans will encompass an additional LE 3 billion in investment in the oil and gas sector. The ministry also announced its intention to hold an international tender that will increase drilling in the Mediterranean Sea.
According to data issued by the ministry, Egypt’s reserves grew over FY 2007-08, which ended June 30, to reach 76 trillion cubic feet of natural gas and 4.189 billion barrels of crude oil, which is the highest level of crude reserves in Egypt’s history.
Harassment bill proposed
The National Council for Women (NCW) has proposed a bill that would institute tougher penalties for sexual harassment, the organization’s secretary general, Farkhona Hassan, announced. This bill will be presented to the People’s Assembly, and contains provisions for incarceration of up to a year and a LE 1,000 fine for convicted harassers. Women are frequently subjected to sexual harassment on the street.
Teachers angry over test
Egyptian teachers were angered by a decision requiring them to take standardized tests, the results of which will be linked to pay increases. Teachers were previously promised a 50-percent pay increase by the government but were stunned to find out that they would have to pass an exam first. While some begrudgingly accepted to take the test last month, a large number of teachers refused, instead staging sit-in protests. From 500 in Aswan to 8,000 in Alexandria, teachers have protested what they say is nothing more than a ploy by the government to avoid giving them the promised pay increases. The education minister has said that there is a sufficient amount budgeted to fund any necessary salary increase.
CPA vigilant during Ramadan
The Consumer Protection Authority (CPA) has launched a media campaign aimed at preventing storeowners from gouging customers during Ramadan, a month that typically sees a steep rise in consumer prices. The CPA is warning consumers that merchants are required to display prices for products and provide a receipt when asked. The consumer watchdog will also monitor incidents of fraud, publishing the names of violators in local newspapers, according to CPA chairman Saeed El Alfi.
Fertilizer scam dupes farmers
A handful of farmers in the Nile Delta governorates of Menoufiya and Beheira say they were swindled into buying substandard fertilizer. The fruit and vegetable growers were approached by a salesman offering fertilizer at a 40-percent discount compared to normal prices. The farmers took samples of the fertilizer they bought to a local laboratory after growing suspicious. Tests confirmed that the fertilizer didn’t have enough potassium. The farmers say their harvests will be 70 percent less than last year’s as a result. Fertilizer prices have doubled over the past year due to strong demand for crop nutrients, causing some farmers to seek cheaper alternatives.
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