Egypt’s New Cabinet to Take Office Source: Agence France Presse, December 31, 2005
Egypt's new government sworn in on Saturday, December 31 following a general election which saw President Hosni Mubarak's party retain its grip on power.
Mubarak signed a decree on Friday, December 30 to form the 30-member cabinet, to be headed by Prime Minister Ahmed Nazif and retaining 23 ministers from the old government.
Prime Minister Ahmed Nazif, a 54-year-old liberal Canadian-educated technocrat, retained his portfolio as did key defense, foreign, interior and information portfolios. Defense Minister Field Marshal Mohamed Hussein Tantawi, Interior Minister Habib el-Adly and Foreign Minister Ahmed Aboul Gheit still maintain their places.
The economic portfolio still includes Rachid Mohamed Rachid, Minister of foreign trade and industry, Investment Minister Mahmoud Mohieldin and Finance Minister Youssef Boutros Ghali, whom are credited with improving some sectors of government, stabilizing the local currency and boosting outside investment.
Among the newly introduced ministers to the cabinet were Zuheir Grana as Minister of Tourism, Hani Helal as Minister for Higher Education, Hatem El Gabally as Minister of Health, Ali Moselhi as the Social Solidarity and Supply Minister and Aisha Abdul Hadi as Labor and Immigration Minister.
In the two other significant changes, businessmen Mohammad Mansour, an auto industry tycoon and former president of the American Chamber of Commerce in Egypt (link here), and Amin Abaza, a major player in the cotton industry, were appointed ministers of transport and agriculture respectively.
Nazif kept several reform minded ministers in place. That, with the introduction of more businessmen to the Cabinet, appeared to be a result of Mubarak's election pledge to carry out an ambitious reform program of job creation and home building thus maintaining a business-friendly administration.
The significant drop from the cabinet list was Kamal el-Shazily, Minister for parliament affairs for nearly two decades.
Egypt and Turkey Sign FTA Source: Trade Arabia, December 27, 2005
Egypt and Turkey signed a free trade agreement on December 27 that aimed at tripling the volume of annual trade between the two countries over three years to $3 billion.
Foreign trade ministers from the two countries signed the deal that came after nearly 10 years of marathon discussions in the presence of Egyptian President Hosni Mubarak and his Turkish counterpart Ahmet Necdet Sezer.
'The agreement offers a number of Egyptian industrial products preferential status in Turkish markets,' Egyptian Minister of Foreign Trade, Rachid Mohammed Rachid was quoted as saying.
It removes customs tariffs on certain Egyptian products entering Turkey and vice versa and lower tariffs on others.
Egyptian and Turkish officials predicted that this would increase the volume of bilateral trade, which currently hovers at around a billion dollars annually.
Cairo is optimistic the agreement will improve its access to Turkish markets, especially in the area of consumer and industrial exports such as cement, iron, medical equipment and ceramics.
Turkish Minister of Foreign Trade, Kursad Tuzmen forecast that the deal would also help boost bilateral ties and considerably increases his country's investments in Egypt, which stand at around $600 million.
Tuzmen said the agreement would enable that to jump to an estimated two billion dollars.
Last year, TAV (link here), a unit of Turkey's Akfen Holding AS (link here), was awarded a $350-million contract to build a third terminal at Cairo airport.
Plans are already underway to establish a Turkish bank in Egypt that will draw shareholders from the country's public banks, Tuzmen said. Private Turkish banks will also open offices in Egypt,' he added. Moreover, Turkish investors also have their eyes set on Egypt's textile industry.
Under the free trade agreement, Turkey will open up its markets to Egyptian customs-free products immediately, while Egypt will lift trade barriers gradually over a 16-year period.
It also allows Egypt better access to markets of countries in the region with which Turkey has free trade agreements such as Israel, Jordan, Syria, Tunisia and Morocco, as well as European markets.
Suez Canal Authority to Raise Transit Fees from Next Year Source: Xinhua, December 14, 2005; Hindustan, December 17, 2005
The Suez Canal Authority (SCA) would raise its transit fee 3% from mid-March 2006, and reduce discounts for empty oil tankers from 40% to 20%, the SCA's chairman, Ahmad Ali Fadel, said yesterday.
The SCA posted record revenue of $3.42 billion in 2005 with an increase of $333 million (12.6%) against the previous year, after 18,700 vessels, carrying 665 million tons of cargo, used the canal. The 160km canal, which connects the Mediterranean to the Red Sea, is one of the busiest waterways in the world. It is also one of Egypt's major hard currency earners.
Fadel attributed the revenue increase to high oil prices, which make routes circumventing the canal much more expensive and booming world trade in raw materials, such as iron ore and coal.
That increase in transit fees is to fund the maintenance and development of the canal
where the development of the waterway will be mutually beneficial to the SCA and shipping industry operators as it will enable the SCA to offer more efficient services.
Furthermore, India signed an agreement with Egypt's Suez Canal Authority (SCA) on Saturday, December 17 for the construction of a shipping canal off its southern coast.
A Memorandum of Understanding (MOU) signed between Sethusamudram Corporation Limited (SCL) (link here) and SCA takes the plunge in the fields of construction and management of Sethusamudram Ship Canal Project (SSCP), a $560-Million project that allows a channel to be dredged in the shallow portion of the sea so that vessels of up to 30,000 tons would not have to circumnavigate Sri Lanka.
The MOU would enable the training of personnel in various aspects of operation and management of ship channels.
The MOU would also pave way for developing programs boosting technical cooperation between the two authorities.
The idea of the channel was first conceived in 1860, about the same time as digging started for the Suez Canal in Egypt. The planned channel, 12 meters deep, 300 meters wide and almost 90 km (55 miles) long, will cut through a chain of small islands known as Adam's Bridge that links south India to Sri Lanka.
Egypt Reduces Government Debt through Swap Source: The Egyptian State Information Service, December 24, 2005
Egypt signed an agreement with German KFW Bank (link here) to swap part of its debts in exchange for financing a number of development projects in several governorates.
The Central Bank of Egypt (link here) and the Social Fund for Development (link here) signed the agreement on behalf of Egyptian side.
The agreement stipulates that 30 million euros of debts on the Egyptian government to Germany will be dropped in return for allocating half of this sum to finance infrastructure and societal development projects nationwide.
Bank of Alexandria Sale Backed Source: Trade Arabia, December 24, 2005
The Egyptian government is committed to offering the Bank of Alexandria (AmCham Member) (link here), one of four big state-owned banks, for sale next month.
“There is a strong commitment from the government and central bank to offer for sale Bank of Alexandria, in its entirety, during January,' the bank's president Mahmoud Abdel Latif was quoted as saying by the state's Al Ahram newspaper (link here).
'The sale will be completed through a strategic investor and through a share in the Egyptian bourse,' he added.
Investment Minister Mahmoud Mohieldin said on November 30 that Bank of Alexandria would be privatized within three months. Latif said an international accounting firm had completed the bank's balance sheets for the last three years. A valuation of its fixed assets had also been carried out.
Furthermore, the merger between the state's second and third largest banks, Banque Misr (AmCham Member) (link here) and Banque du Caire (AmCham Member), (link here) is expected to be completed by the end of next year.
The government wants fewer and bigger banks that are able to compete more vigorously.
EIB Supports Private Egyptian Equity Companies Source: Mena Report, December 21, 2005
Under its Facility for Euro-Mediterranean Investment and Partnership (FEMIP) (link here) , the European Investment Bank (EIB) (link here) is providing EUR25 million in support of private Equity directed at Egyptian private sector companies. The funds, in the form of a risk capital line, will be channeled through selected Egyptian financial intermediaries or through EIB direct investments in private equity funds or private sector companies.
At this stage, the selected partners include the Commercial International Bank (CIB) (AmCham Member) (link here), EFG-Hermes Holding Company (EFGH) (AmCham Member) (link here), the Export Development Bank of Egypt (EDBE) (AmCham Member) and the National Bank of Egypt (NBE) (AmCham Member) (link here)
The finance agreement was signed on Wednesday, December 21 in Paris by Mr. Philippe de Fontaine Vive, Vice President of the EIB in charge of FEMIP, and senior representatives of the selected partners.
Mr. De Fontaine Vive commented: “This is FEMIP’s largest risk capital operation in 2005 and the third of this type that we set up in Egypt, confirming our engagement to support the country’s private sector companies and develop its private equity markets”.
In addition to increasing the availability for local final beneficiaries of relatively scarce equity and quasi-equity funding sources, the facility will endorse the development and application of best practices and private equity international standards. Together with its loans, and technical assistance grants, risk capital is one of the main instruments deployed by FEMIP to help the Mediterranean partner countries meet the challenges of economic and social modernization and enhanced regional integration. FEMIP risk capital is financed from the Community budget (EUR200 million over the period 2001-2006) and by the FEMIP Trust Fund set up this year (33.5 million contributed directly by 15 of the Member States and the European Commission (link here).
Two Bid For EAB Source: Middle East Economic Digest, December 16, 2005
Two offers to acquire a stake in Egyptian American Bank (EAB) (AmCham Member) (link here) are under evaluation at Bank of Alexandria (BoA) (AmCham Member) (link here) and American Express (Amex) (AmCham Member) (link here), which hold a combined stake of 74.7% in EAB. The offers are understood to have been submitted by Calyon (AmCham Member) (link here) and HSBC (AmCham Member) (link here). Credit Suisse First Boston (link here) was appointed by BoA and Amex to act as financial adviser on the transaction.
ABN AMRO Launches First Ever Egyptian Stock Market Tracker Certificates Source: Zawya, December 19, 2005
ABN AMRO (link here) has issued the first certificate on the Cairo & Alexandria Stock Exchanges (AmCham Member) (link here) Case30 Index. The Egyptian Stock Market Certificate is a simple financial instrument that enables investors to gain exposure to the entire Case30 Index, without having to buy each individual stock. Investors access the performance of the Case30 Index as the Certificate effectively replicates the performance of the Index.
Tailor-made structured products for private and retail clients are increasingly in demand in the Middle East. Given the boom financial markets in the region are experiencing, it isn't surprising there is such high demand for structures on local underlying assets, according to Sven Haefner of ABN AMRO Private Investor Products.
"The foundations for growth in the regional derivatives market are being laid as many Arab countries have completed, and more are in the process of, capital market liberalization and corporate governance reforms. The environment for domestic, regional and international investors in Middle Eastern structured products is very favorable. The Egyptian Stock Market Certificate was an exciting prospect, but the reality is even better," Haefner saidThe CASE 30 Index consists of the 30 most highly capitalized and liquid stocks on the Cairo & Alexandria Stock Exchanges. Its current composition is diversified and includes telecoms, cotton and textile, banking and construction companies. These companies hold strong positions both domestically and across the Middle East, with many expanding beyond the region.
The Egyptian Stock Market Certificate has an Open-ended maturity and is listed on the SWX Swiss Stock Exchange.
Egypt to Privatize Last State-Owned Cement Company Source: Zawya, December 16, 2005
Arab and Foreign investors are bidding to acquire Egypt's National Cement Company (Qawmia) at $700 million.
Holding about 10% of the local market, Qawmia is the country's last state-owned cement producer.
The two companies known to have expressed interest in acquiring Qawmia are Egypt-based Al Kalaa Financial Consultant Company and Italy-based Italcementi Group (link here).
The company will not be place for an initial public offering (IPO), said Nabil Sayed Al Gabri, the chairman of Qawmia.
Around 34% of the workforce would be kept while the rest would be compensated and then laid off. The employee count at Qawmia was last reported at around 3,400.
The buyer wouldn't have to spend heavily on modernizing the company, Gabri said, claiming that Qawmia complies with all environmental safety requirements and is undergoing an enhancement project, which will decrease the emission of pollutants to less than 20 mg per cubic meters.
The Egyptian government divested its stakes in major cement companies over five years ago but Qawmia remained under state control at that time.
Qawmia, which was established in 1956, focuses on the production and marketing of all kinds of cement including Portland cement, seawater, super sulphate, mixed and slag cement. Its annual total production capacity is around 2 million tons of cement.
The company's net profits skyrocketed by 1190% to LE155 million ($27.1 million) in the first quarter of 2005 from LE12.15 million ($2.1 million) in the same period of last year. A large part of the gains originated in Qawmia's sale of its stake in Egypt-based ASEC Cement Company (link here) (the fifth largest cement producer in Egypt with 4 million tons of clinker or 8.4% of the market share) for LE97 million.
Italcementi is an Italian cement firm and a major player in the Egyptian cement industry. It owns a 54.2% stake, through Ciments Francais (link here), in Suez Cement Company. Since acquiring a 68.7% stake in ASEC Cement Company earlier this year through Suez Cement Company, Italcementi controls about 30% of Egyptian cement production.
Egyptian Bourse Best Performing Among Emerging Arab Markets Source: The Egyptian State Information Service, December 29, 2005
Standard and Poor’s (link here), specialized in evaluating the capital market in the world, declared that the Egyptian bourse occupied the top list as the best performing among the emerging Arab markets in 2005.
The Egyptian capital market excelled over all the Arab & foreign markets in the emergency countries, preceding Jordan, the Kingdom of Saudi Arabia (KSA), Russia and Colombia.
It also came atop of the markets, which flourished as regards its qualitative and quantitative indexes. Standard and Poor’s index for the Egyptian market realized a rise of 154.4% , higher than the Jordanian and the KSA markets which increased by 134.4%, and 116.6%, respectively.
Egyptian capital market indices in 2005 increased to 2100 points in revenues, that is 73.44% versus 50.88% in 2004.
For Amcham’s Banking Sector Developments in Egypt New (click here).
Orascom Expands East With Hutchison Stake Source: Reuters, December 22, 2005
Orascom Telecom (link here) has bought 19.3% of Hutchison Whampoa Ltd's (link here) emerging markets phone unit for $1.3 billion in a deal that gives it exposure to new Asian markets, with a full merger possible in the future.
Shares in Hutchison Telecommunications International Ltd (HTIL) and its parent both rose in Hong Kong on Thursday following the deal, which will see Hutchison Whampoa's stake in HTIL drop to 49.8% and give the conglomerate a one-off gain of HK$7.4 billion ($955 million).
'We are aligning the strategies of two mobile companies in emerging markets. If you look at the combination, it's extremely powerful. Together we cover about 2 billion people,' said Aldo Mareuse, chief financial officer of Orascom, which runs mobile networks in Algeria, Egypt, Iraq, Pakistan and elsewhere.
Orascom has the conditional right to buy another 3.7% stake and agreed with Hutchison Telecom to cooperate on equipment procurement in a strategic alliance.
HTIL, which has been an avid dealmaker since going public last year, operates cellular networks in Hong Kong, India, Thailand, Israel, Macau and Ghana and is starting up operations in Indonesia and Vietnam.
Combined, HTIL and Orascom had more than 40 million cellular customers at the end of September.
For ports-to-telecoms conglomerate Hutchison Whampoa, which has extensive holdings in Europe and Asia, the deal expands its presence in a part of the world that it is making a priority.
Last month, Hutchison's container ports arm invested in Oman, adding to a regional presence that also includes Saudi Arabia and Egypt. Hutchison's retail arm operates in Turkey and is expanding into the UAE.
Sawiris said combining the equipment procurement of Orascom and Hutchison Telecom would increase leverage with suppliers, reducing the cost of network expansion for both firms.
The transaction was completed on Wednesday, December 21 with 10% of the value paid in cash and the balance covered by the issue of a promissory note due at the end of February.
Consortium to Bid for Egypt's Third Mobile License Source: Zawya, December 23, 2005
Raya Holding (AmCham Member) (link here) formed a consortium with South Africa's MTN (link here) cellular network operator to bid for Egypt's third mobile license.
The third participant in the consortium is Stars Communication, company owned by Saudi businessman Abdul Rahman Sharbatly.
MTN's capital reached $14 billion as the group operates in 10 African states, with 20 million subscribers. MTN has recently won with its local partner Iran's second mobile network.
Egypt has resumed its plans to liberalize and enhance competitiveness of the telecommunication market as the country gets prepared to accept offers next month from parties interested in the obtaining the license for Egypt's third mobile network.
A fierce competition has already started between Egyptian and Gulf companies who are competing for the third mobile license of the Arab world's most populous country. Nasser al-Kharafi, president of Mohamed Abdulmohsin Kharafi and Sons Company, said early in December the group will bid for Egypt's third mobile license in partnership with a foreign telecom group.
Egypt currently has a duopoly GSM market served by operators MobiNil (AmCham Member) (link here) and Vodafone Egypt (AmCham Member) (link here).
Egyptian Cotton Export Sells at $139.2 Million Source: The Egyptian State Information Service, December 26, 2005
Egyptian cotton export contracts since the beginning of the 2005/06 export season 10 weeks ago, reached 1,215,300 kantars of hair cotton, at over $139.2 million according to Mohamad El-Shiwi, Chairman of the International Trade Point (link here) and Government Commissioner at the Cotton Export Federation.
He said 44,500 Kantars earning some $139,200 were exported to 24 countries only last week.
Demand on Egyptian cotton increased in the world market as a result of a drop of about 16% in world cotton production and 38% depletion in world cotton stocks.
Shiwi said this ultimately led to an increase by about 50% in cotton prices on both the domestic and international markets, compared to cotton prices at the beginning of the season.
Egypt Buys 505,000 Tons of Wheat Source: Reuters, December 3, 2005
Egypt's main official wheat buyer announced the purchase of 505,000 tonnes of U.S, French, Russian and Australian wheat for January 1-15 shipment.
Mahmoud Abdel-Hamid, vice-chairman of the General Authority for Supply Commodities (GASC), said he had bought the following cargoes on an FOB basis:
- 60,000 tons of US Soft White Wheat at $127.30/tonne from Columbia.
- 55,000 tonnes of US Hard Red Winter Wheat at $167.99/tonne from Cargill.
- 120,000 tonnes of French Milling Wheat at $127.49/tonne from Lecureur and Dreyfus.
- 30,000 tonnes of Russian Milling Wheat at $124.95/tonne from Silverstone.
- 180,000 tonnes of Australian Standard White Wheat at $127.40/tonne from the AWB.
- 60,000 tonnes of Australian Hard Wheat at $163.50/tonne from AWB
OCI Wins $355 Qatar Contract Source: Reuters, December 25, 2005; Al Bawaba, December 26, 2005
Orascom Construction Industries (OCI) (AmCham Member) (link here) announced that its construction subsidiary Contrack International (link here) in joint venture with local contractor Darwish has been awarded a $355 million turn-key contract for the construction of the new Science & Technology Park in Doha - Qatar.
Contrack's scope of work includes the construction of five main building structures in addition to the Park's infrastructure and landscape works.
The project is expected to be completed on a fast track basis in 20 months. It is being financed by the Qatar Foundation for Education, Science and Community Development (link here) , a charitable foundation established by Sheikh Hamad Bin Khalifa Al-Thani, Qatar's Emir and Head of State. The new Science & Technology Park is designed by the renowned Australian architecture firm Woods Bagot (link here) , which has significant experience in the design of state-of-the-art educational facilities in various countries. Designed on a heritage site on the outskirts of Doha, the Park will include flexible educational and scientific facilities as well as retail, leisure and residential accommodation.
This new contract is Contrack's fifth in the Education city. In April 02, a Contrack / Darwish joint venture was awarded a $71 million contract for the construction of the Weill Cornell Medical College facilities (link here) which were also completed on a fast-track basis in 14 months.
Since then, Contrack has also been awarded two contracts with a combined value of $129 million for the erection of all infrastructure works in the Education City and the construction of a residential compound for teachers and employees. Contrack was also awarded a $13.3 million contract for the construction of the Al-Jazeera news network's (link here) new building for its children's television channel.
Hurghada Airport Financing Sealed Source: Middle East Economic Digest, December 16, 2005
Kuwait-based Arab Fund for Economic & Social Development (AFESD) (link here) has agreed to part-finance the construction of a new terminal and runway at Hurghada airport. The agreement will see AFESD provide 70% of the estimated $170 million project.
Beirut-based Dar al-Handasah (Shair & Partners) (AmCham Member) (link here) is expected to complete full designs for the airport by mid-2006. The new facility will increase capacity to about 7.5 million passengers a year. Egyptian Airports Company is the client. Aeroports de Paris (AdP) (link here) has the six-year contract to manage Hurghada airport along with four other regional airports.
5 Million Euros to update Maritime Transport at Port Said Source: The Egyptian State Information Service, December 23, 2005
Port Said Navigation Chamber signed a cooperation protocol with Industrial Modernization Center (link here) affiliated to Egyptian Ministry of Foreign Trade and Industry (link here) to modernize maritime transport between the private and public sectors operating in this field aiming at a more competitive environment between them.
The protocol includes allocating 100,000 euros for each maritime company to develop its administration. The Industrial Modernization Center will bear 85% of this sum while the company will bear 15%.
The aim of modernizing maritime companies is to win ICO 9001 certificate in order to allow them to practice their activity following March 2007. A number of maritime companies started the implementation of modernization plan and actually won ICO certificate, which helped them, increase their business.
COSCO Pacific to Buy Stake in Egypt Port Source: Associated Press Financial Wire, December 30, 2005
Ports investor COSCO Pacific Ltd. (link here) said it has signed an agreement to buy a 20% stake in the Suez Canal Container Terminal in Egypt, its first port investment in the Middle East.
The Hong Kong listed Company will buy its stake from Egyptian International Container Terminal S.A., a wholly owned unit of Danish shipping group A.P. Moller-Maersk A/S (link here), which currently owns 60% of the terminal. Financial details of the deal aren’t yet disclosed.
The terminal is located in Port Said and has been in operation since October 2004. Other shareholders include the Danish Industrialization Fund for Developing Countries, Egyptian state institutions and the Suez Canal Authority.
COSCO Pacific said the terminal has four deep-water berths that had throughput of 550,000 TEUs, or 20-foot equivalent units, in the year, which ended in October 2005. It said the acquisition is subject to Egyptian regulatory approval.
COSCO Pacific, which is a unit of newly listed China COSCO Holdings Ltd., holds stakes in a number of Chinese ports in the Pearl River Delta, the Yangtze River Delta and the Bohai Rim in northern China. Outside China, it has a 49% stake in a terminal in Singapore and a 25% stake in Belgium's Antwerp port.
Five Private Aviation Agencies Established Source: Financial Times Information, December 11, 2005
The Civil Aviation Authority approved the establishment of five new civil aviation agencies from among 14 applicants.
Mr. Samir Abdel Maaboud, Chairman of the Civil Aviation Authority, said that the approval was based on deliberate study and assessment of the five offers, especially with regard to security and safety criteria as well as operating efficiency. Three agencies are of completely Egyptian capital, while the other two are Italian and joint Egyptian-Arab, he said, noting that all tenders were interested in the charter business. Establishing scheduled flights agencies, however, requires that Egypt have more than 60% of the total share capital.
Boeing to Help Train Egyptian Engineers Source: Trade Arabia, December 24, 2005
The Boeing Company (link here) has teamed up with Amideast Egypt (AmCham Member) (link here) to provide Egyptian engineers with an integrated, in-depth Project Management Certification Program (PMCP).
The scholarship program is designed to prepare a cadre of project engineers for the aerospace, mechanical and information technology (IT) engineering industries in Egypt.
The overall goal of the program is to build a cadre of aerospace, mechanical and IT engineers with transferable project management skills that can lead to certification as a Project Management Professional (PMP) or a Certified Associate in Project Management (CAPM) from the Project Management Institute (PMI), the world’s leading professional association for project management.
The Boeing-sponsored PMCP is designed to give engineers the project management expertise they need to manage complex projects in their increasingly specialized fields.
The PMP Certification Preparation Program is designed for 15 experienced engineers who meet the criteria for the certification, as set by PMI. The program will culminate in PMI certification as a Project Management Professional. The CAPM Certification Preparation Program is designed for 15 recent graduates in aerospace, mechanical or IT engineering who meet the criteria for certification. It will culminate in certification as a Certified Associate in Project Management. Both programs will be offered in two tracks, running simultaneously over a four-month period.
Each track will comprise four components: a Project Management Essentials workshop, a Project Management Body of Knowledge series of workshops, a Certification-Exam Preparation course, and registration and testing for PMP or CAPM certification.
GS Finally Signs for ELAB Source: Middle East Economic Digest, December 23, 2005
A consortium led by South Korea’s GS Engineering & Construction (link here) on December 19 signed the $350 million Engineering, Procurement and Construction (EPC) contract to build the 100,000-tonne-a-year Linear Alkyl Benzene (LAB) plant near Alexandria for Egyptian Petrochemicals Holding Company (ECHEM) (AmCham Member) (link here).
GS will lead the consortium as main EPC contractor while the local Engineering for the Petroleum & Process Industries (Enppi) (AmCham Member) (link here) will work on the detailed design for the utilities portion and Petrojet (AmCham Member) (link here), also local, will carry out the construction. Canada’s SNC Lavalin (link here) and Paris-based Technip (link here) were the other bidders for the contract, whose award took longer than expected as offers exceeded the client’s original budget.
Egyptian LAB (ELAB) is the project company handling the plant. The project manager is the US’ Fluor Corporation (link here). The US’ UOP (link here) is the technology license provider, with Enppi having carried out the front-end engineering and design (FEED).
The scheme is one of eight projects included in the first phase of ECHEM’s petrochemicals masterplan, which aims to invest more than $10,000 million into the sector by 2022.
Decision Nears on EPPC Source: Middle East Economic Digest, December 23, 2005
Egyptian Propylene & Polypropylene Company (EPPC) is holding final negotiations with bidders following the submission of revised commercial bids in late November for the contract to build a major propane dehydrogenation (PDH) and polypropylene (PP) complex near Port Said.
Three companies are still in the race for the contract after Germany’s Linde (link here) re-entered the bidding process despite its withdrawal earlier in the year. The other bidders are Japan’s Toyo Engineering Corporation (link here) and Germany’s Uhde (link here). EPPC is a 50:50 joint venture of the local Oriental Petrochemicals Company (OPC) and the state-owned Egyptian Petrochemicals Holding Company (ECHEM) (AmCham Member) (link here). The estimated $400 million plant will comprise a 400,000-tonne-a-year PDH unit, which will feed a PP plant of the same capacity.
Egypt and Germany Sign Agreement to Finance Zafarana Wind Farm Source: The Egyptian State Information Service, December 17, 2005
Egypt's New and Renewable Energy Authority (NREA) (link here) signed an agreement with Germany to finance the fourth stage of the Zafarana wind farm.
This project is part of Egyptian-German cooperation in the field of new and renewable energy.
The LE525 million-agreement will be used to set up new units to generate 80 megawatts of power.
Electricity generated from Zafarana wind farm would then reach 266 kilowatts per hour, as part of the energy sector’s ambitious program to produce electricity from wind power.
Electricity generated by wind power is estimated at 145 megawatts up till now. The figure is expected to rise to 850 megawatts by the year 2010.
Egypt Solar Power Station to be Established Next March Source: The Egyptian State Information Service, December 26, 2005
Egypt is to construct next March a solar power station, the first of its kind in the Middle East. The station will take 3 years to operate in 2009.
Premier Ahmed Nazif will attend the signing ceremony of a $97 million loan between Minister of International Cooperation Fayza Abul-Naga and the Japanese Ambassador to Cairo to finance the thermal equipment of the station.
The station will be established in Al-Kureimat at a capacity of 150 mega watts.
Minister of Electricity Hassan Younis said the International Environment Utility allocated $50-million-grant for the station.
Banks Sounded Out on ELNG Refinancing Source: Middle East Economic Digest, December 16, 2005
Informal approaches have been made to banks about a possible refinancing of the debt package for the first train of the Egyptian LNG (ELNG) project at Idku. Societe Generale (link here) is acting as financial adviser. The original 15-year, $950 million facility was taken out in late 2003.
The first liquefied natural gas (LNG) train is now on stream and train 2, for which the financing was completed in the summer, is due to be commissioned in early 2006. Train 1 is a joint venture of the UK’s BG Group (AmCham Member) (link here), Malaysia’s Petronas (link here), Egyptian General Petroleum Corporation (EGPC) (link here), Egyptian Natural Gas Holding Company (EGAS) (link here) and Gaz de France (GdF) (link here).
Egypt Plans to Build Giant Oil Refinery Source: The Calgary Herald, December 24, 2005
Egypt is to build the world's biggest oil refinery in conjunction with Arab investors.
The refinery will have a capacity of 500,000 barrels per day.
With an output of 500,000 bpd, the new refinery would greatly increase Egypt's capacity for processing crude.
The country's largest refinery, el-Nasr at the Red Sea port of Suez, has a maximum capacity of 146,300 bpd.
Shell Tallies Egypt Gas Source: Oil Daily, December 20, 2005
Royal Dutch Shell (AmCham Member) (link here) has so far discovered 800 Bcf to 1 Tcf of natural gas in the North East Mediterranean Deepwater concession in Egypt.
Shell would need to find some 10 Tcf of gas to justify building an LNG train from the area.
Accordingly, the main focus at the moment is on drilling, according to a Shell spokesperson. A global shortage of drilling rigs, however, has slowed the pace of the project, which is now set to start production in late 2010 or even 2011.
Shell and its venture partners, Malaysia's Petronas (link here) and Egyptian Natural Gas Holding Company (EGAS) (link here), made two discoveries in the concession in early 2004, but this is the first time Shell has said how large they were.
With sales of about 10 million tons a year, Shell is the world's top private supplier of LNG. The company earlier said it plans to double its LNG output by 2010.
The Purchases Department of the New and Renewable Energy Development Agency has issued on December 23, 2005 a request for contractors prequalification regarding the combined cycle island of the Integrated Solar Combined Cycle power plant - ISCC in Kureimat as per JBIC - Japan Bank for International Cooperation - standard procedures & forms, Edition November 1999, under funding from JBIC - Japan Bank for International Cooperation. The specification fee is $500. deadline for the submission of offers is March 12, 2006.
Information Technology
The project management unit of the ministry of higher education issued on December 20, 2005 a request of offers from eligible bidders as per the guidelines of the World Bank to furnish the infrastructure for information networks at 5 universities in Cairo, Alexandria, Benha, Beni Swef & Fayyoum including the supply of routers, switches, network connectivity & servers for each university under 5 contracts. Deadlines for the submssion of offers are January 22, 25 & 26 2006
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