Identifying External Environmental Variables

External Variables (PEST)

Location
Located at the heart of the world, standing as a major trade and crossroads destination between
Europe, the Middle East, Africa and west and south Asia. It occupies the north Eastern corner of
Africa, bordered by Libya to the west, Sudan to the south, Palestine, Israel and Jordan to the
northeast. Its north coast is on the Mediterranean Sea, while the eastern coast is bounded by the
Red Sea. The Suez canal links the Red Sea to the Mediterranean- a linkage vital to both Egypt
and the world.

1.1 Political – Legal Variables:

 Egypt is an Arab Republic with a socialist-democratic system. The constitution states that
there should be no discrimination on the grounds of race or religion. The country is divided
into 28 governorates, with governors appointed by the president
 The new government is trying to facilitate the entrance of new foreign investment by
modifying the investment laws and reducing the procedures needed to establish new entities
in the different business sectors.
 In February 2005, the Egyptian president, Hosny Mobarak initiated the reform of the
Egyptian legislation clause no. 76 allowing more than one candidate to run for the presidency
elections in September 2005 through direct voting, this reformation directly affects the
stability of the political environment in Egypt. The political conflict between the different
Egyptian parties illustrated in the daily and continuous demonstrations may have a short term
effect on hindering the attraction of foreign and local investment in various areas.
Nevertheless, on the long term, and mainly after the presidency election was over, it is
forecasted that the political environment will come to a stable phase and the Egyptian market
could be very much attractive in terms of foreign investment.
 The newly applied taxation law (significantly reduced both business and individual taxes) to
comply with World Trade Organization (WTO) agreements which will lower tariff rates&
automatically lowered the required EBT of projects that are being studied for feasibility and
accordingly rendered them more feasible, although government strategy appears to be to
attempt to offset this through new taxes.This will encourage both direct and indirect
investment (whether foreign or national) and raise the appeal of the general business
atmosphere in Egypt.

 Egypt, the top reformer in the region and worldwide, greatly improved its position in the
global rankings on the ease of doing business. Its reforms went deep. Egypt cut the minimum
capital required to start a business, from 50,000 Egyptian pounds to just 1,000 and halved the
time and cost of start-up. It reduced fees for registering property from 3 percent of the
property value to a low, fixed amount. It eased the bureaucracy that builders face in getting
construction permits. It launched new one-stop shops for traders at Egyptian ports, cutting the
time to import by seven days and the time to export by five. And it established a new private
credit bureau that will soon be making it easier for borrowers to get credit
1.2 Economical Variables: (industry specific)
 According to the latest Business Monitor international latest forecast, the investment will
drive real GDP growth of at least 6.8% in FY06/07 (with risks to the upside). Expansion will
then drop gradually over the remainder of the forecast period, coming in at 5.3% in FY07/08,
4.9% in FY08/09, 4.7% in FY09/10 and 3.9% in FY10/11. Consumer and government
spending will also boost the rate of growth, while, on the output side, They remain bullish
construction, real estate and tourism.
 Recently released balance of payments data show that forgein direct investment (FDI) in
Egypt came in at US$9.0bn in the first three quarters of FY06/07, easily beating last year’s
already stellar US$6.1bn of inflows. A healthy 83.6% of inflows went to the non-petroleum
sector, indicating a broad-based confidence that extends beyond the current commodity boom
 Economically, the X sector is indirectly affected by the several administrative reformations
that were conducted by the new government in terms of investment laws and regulations.
 Domestic debt repayment to relieve the ongoing liquidity problem has dominated economic
policy.
 With the public sector accounting for over one-third of GDP, Egypt's privatization program is
the cornerstone of the transformation from a state-dominated economy to an efficient market-
based economy. The government has promised an acceleration of the privatization program
 The GDP trend per capita has been steadily increasing during the past few years which
directly reflects on consumer spending power. This can affect the X sector,
 The current appreciation of the Egyptian pound against the foreign currencies will give the
investors an advantage for reducing their new capital costs as most of the new equipments are
paid in foreign currency and on the other side increase their profits when their earnings are
transferred into foreign currency.
 Wages level is low which means the invesor can employ relatively cheap labor and reduce
their operating costs.
 Due to the size of the Egyptian consumer market and the development stage of the country
itself, many business prospects exist for US exporters
 The interest rate is 8.8%
 The reduction of customs duties has opened Egypt’s markets to more foreign trade and
stimulated domestic producers. Business procedures have been streamlined. Corporate and
personal taxes have been cut dramatically and now are lower than in most countries. State
assets in all sectors of business are being transferred into the private sector. Companies are
being restructured.
 The cost of doing business in Egypt is extremely favourable, particularly labour and land
costs. Electricity and gas are priced extremely competitively. The movement of goods is
being speeded up with an improved transport system. The ports are being modernized.
 The Ministry of Investment was created in 2004 by Presidential Decree No. 231 as the
primary government body that provides an environment that is conducive to investment in
Egypt, enhancing the competitiveness of economic activities, encouraging and increasing the
opportunities for local and foreign investment.
 The Ministry of Investment is assisted directly and indirectly through affiliated organizations
and in cooperation with other ministries and organizations. The Ministry of Investment
oversees the General Authority for Free Zones and Investment (GAFI), the General Authority
for Economic Zone North West Gulf of Suez (SEZONE), the Capital Market Authority
(CMA), the Egyptian Insurance Supervisory Authority (EISA), the Mortgage Finance
Authority (MFA) as well as the holding companies and affiliated companies in public
business sector.
 The Ministry of Investment implements definitive policies to promote and develop
investment by:
1. Creating the suitable organizational and legislative environment for investment
2. Promotion
3. Performance progress measurement
 Generous incentives to invest in Egypt’s private sector have been approved by the
Government through the offering of a series of Investment Laws revolving around tax
incentives, customs exemptions, and many new investor protections and guarantees.
 Law 230 and its update by the 1997 Investment and Incentives Guarantee Law No 8, offer
investors:
 A project could be wholly owned by foreigners.
 Guarantees against nationalization and expropriation of the project.
 Output of the project is not subject to price control.
 Projects are allowed to repatriate their capital and profits.
 Foreign experts salaries are exempt from income tax if their stay in Egypt is for
less than one year.
 Imported capital assets and construction materials required to establish an
approved project are subject to a unified import duty rate of 5%.
 All related contracts to the companies activities such as (articles of incorporation, land deed,
loan and mortgage) are exempted from the fiscal stamps and authentication fees for three
years from the date on which such companies are registered in the Commercial Register.
 Egyptian joint stock companies under Law 8 of 1997 whose shares are registered with the
Egyptian Stock Exchange will enjoy an exemption from the corporate tax on their profits
equal to the Central Bank of Egypt's lending or discount rate.
 Interest from bonds issued by joint-stock companies under Law 8 of 1997 is exempt from the
tax on income from moveable capital provided that the bonds are offered for public
subscription and that they are registered in the Egyptian Stock Exchange.
 With regard the unemployed, this remains a national challenge, with numbers increasing from
1.8 million (of whom 845 thousands women) in 1993 to 2.15 million (of whom 1.2 million
women) in 2004. Nevertheless, the reduction in human deprivation reflects the fact that
economic growth over the last decade has had an impact on those people who are
economically disadvantaged. Using the national poverty line, the number of poor persons, as
a percentage of the total population, has significantly decreased from 35.1% in 1991 to
20.16% in 2004.
Principal growth sectors
Agriculture
 Cultivated area increased from 6. 2 million acres in 1982 to 8. 11 million acres in June
2004.
  Cropped area increased from 11. 2 million acres in 1982 to 14. 5 million acres in June
2004.
 Total value of agricultural production increased from EGP 5. 8 billion in 1982 to EGP 82.
6 billion in 2003.
 Value of agricultural exports increased from EGP 0. 5 billion in 1982 to EGP 4.6 billion
in June 2004.
 Agriculture accounts for 16. 6% of GDP in June 2004.
 New agricultural projects: Toshka, East Owinat
(Source: IDSC)
Tourism
 Egypt 2020 Vision
 WTO 2020 Vision forecasts that Egypt will remain the region’s largest tourist
receiving country with over 17 million international tourist arrivals (ITA)
 The expected growth rate in ITA for the period 1995-2020 is above the average
for ME region and world, at 7.4 %. (source: WTO)
 Strongest growth is expected from European generating markets of France,
Germany and Italy. (Source: WTO)
 Egypt leads the growth in the Middle East region with 25% market share.
 International Tourist Arrivals reached 8.1 million, with a growth rate of 34.1 %
comparing with 2003. (Source: WTO)
 The total growth during the period 2001-2004 is 88.37%, while average annual growth
rate was 22.09%. (Source: Ministry of Tourism)
 International Tourist Nights in 2004 reached 81.667 million nights, 53% more than 2003.
(Source: Ministry of Tourism)
 Tourists' average length of stay was 10.1 night in 2004 compared with 8.7 night in 2003.
 International Tourism Receipts in 2004 reached 6.120 billion US$ an increase of 1.45
billion US$ comparing with 2003. (Source: the Egyptian Central Bank)
 The direct and indirect impact for tourism on GDP represents 11.3 %.
 Tourism effects on employment reach 12.6 % of the Egyptian labour force.
 Tourism is the number one contributor to the economy: 22.1 % of Egypt's foreign
exchange earnings.
Investments in the tourism sector:
 Number of companies increased from 86 companies in 1994 to 1352 companies
in June 2003. (source: GAFI)
 Tourism companies employ a total of 184 448 people. (source: GAFI)
 Number of hotels and touristic villages increased from 752 in 1995 to 909 in
2004. (source: IDSC)
Petrochemicals
 Petroleum and natural gas compose 8% of GDP and 40% of exports. (source:International
Finance Corporation)
 Crude oil exports provide about 52% of foreign exchange receipts from merchandise
exports.
 About 75% of crude oil production comes from fields in the Sinai Peninsula and the Gulf
of Suez.
 Gas reserves: 66 trillion f³, with probable reserves of 120 trillion f³. (source: Ministry of
foreign Trade and Industry)
 FDI in the Petroleum sector reached US$ 3 125 million in June 2004. (source: IDSC)
Pharmaceuticals
Several features below characterize the Egyptian pharmaceutical market:
 Egypt is considered the largest producer and consumer of pharmaceutical products in the
Middle East, accounting for 30% of the supply of the MENA Region.
  There is a focus on drug formulation rather than research.
 High degree of concentration with top 10 companies representing around 50% of the
market and the top % Co. making around 32%.
 Local production is concentrated on end-use products for final consumption, with 85% of
its primary elements being imported, resulting in limited backward linkages.
 In 2003 the domestic market for synthetic products, based on IMS data (excluding
hospital sales) was worth EGP 5.7 billion.
 The most significant product areas are: alimentary and metabolism; systemic anti-
infective; cardiovascular system; musculo-skeletal system; respiratory system; and
central nervous system.
 The Pharmaceutical Sector accounted for LE 5.7 of total investment cost until 30/4/2005
with total issued capital of L.E. 5.4 billion in 336 projects , and with investment cost of
L.E. 7.1 billion, the participation of foreigners in the issued capital valued by L.E.1.15
billion (21%).
Information and communication technology
 Fixed lines increased from 6.5 million lines in October 1999 to 12.2 million lines in April
2005.
 Number of subscribers increased from 5 million in October 1999 to 9.7 million lines in
April 2005, with penetration of 13.8%.
 Mobile phone users increased from 0.9 million in October 1999 to 8.2 million lines in
April 2005, with penetration of 9.95%.
 Mobile services cover 220 cities and 111 highways
 Public pay phones increased from 13 000 in October 1999 to 54 564 in April 2005.
 Internet users increased from 300 000 in October 1999 to 4.3 million users in April 2005
 Number of companies in the field of communication services reached 243 companies in
April 2005.
 Number of Operating Companies in CIT sector increased from 312 companies lines in
October 1999 to 1349 companies in April 2005.
 Information and communication technology companies employ a total of 37 455 people.
 Number of trainees in the CIT sector reached 130 389 thousands trainees in April 2005.
(Source: Ministry of Communication and Information technology.)
Textile
 Approximately 6.5% of FDI in the manufacturing sector or 3% of total FDI is directed to
the textiles and clothing industry. (source: GAFI)
 Total investments in the textile sector is over USD 8 billion
 Textile production represents 16. 3% of Egypt's total industrial production.
 Textile exports represent 24.5% of total non-oil Egyptian exports in 2003.
 Egyptian textile and clothing industry consist of 4,491 enterprises employing 30% of the
total labor employed by the industrial sector. (source:the Egyptian Textile Manufactures
Federation - ETMF)
1.3 Sociocultural Variables: (industry specific)
 Population according to census 2006 final results 76,699,427(inside and outside egypt)
 Egypt area in 1000 square KM 1010.4
 Populated area of total area %7.83
 Population density for Populated area 92000 people / km 2
 population under 6 years 14.19% - 2006
 Population 6-10 years 6.91%-2006
 Population at age 10-15 10.6%-2006
 Population at age 15-45 49.85%-2006
 Population at age 45-60 12.73%-2006
 Population at age 60 and more 5.72%-2006
 Population urban 43.09% - 2006
 Total female 35,578,975 people - (2006)
 Provosts families females 15.7%-(2006)
 Birth rate 25.7%-(2006)
 Life expectancy at birth in years for males & females 71.8- 2007
 Life expectancy for males in years 69.5 - 2007
 Life expectancy for females years 74year - 2007
 Male labour force 15 years and over 77.9%-2006
 Female labour force 15 years and over 22.1%-2006
 representation in the parliament - the Shura Council 5.7%-2005
 Women representation in the parliament 1.8%-2005
 Women representation in the ministries on the degree Minister 3.9%-2005
 Female illiteracy rate / 10 years and over 2006 census Available for total 29.71%
 Attendance in secondary schools - Male 72% - a book for status of Women and Men
 Attendance in secondary schools - Female 73%-- a book for status of Women and Men
 Population Growth Rate is 1.8%
 HDI achievements are evident and noteworthy. Whatever reservations on the statistical values
of the HDI and its major components, they do reflect a general trend of human development
improvement on the national level. Over the last decade, Egypt has accomplished a 17% rise
in its Human Development Index (HDI), where this index increased from 0.589 in 1994 to
0.689 in 2004. This has pulled Egypt from the low to the medium category of human
development according to the ranking used in the global UN HDR, and progress is also
visible in the major components used to calculate HDI.
 With a population of over 75 million, Egypt has the largest single market in the region. It is
rich in human resources; its businessmen are experienced in the markets of its neighbor
countries, and it possesses a good mix of semi-skilled, skilled and highly qualified labor
force. Egypt's workforce, close to 16 million, is an excellent source for productive
inexpensive labor. The growth of Egypt's labor force has averaged about 2.7% annually in
recent years, with an annual growth rate of 3.3%. Low prevailing wages have encouraged the
use of labor-intensive technologies. Foreign companies frequently pay higher wages and
attract workers with higher than average skills, however, many foreign companies have
expressed the need for skilled managers in Egypt
 A large, young, trainable workforce, available at a competitive cost; close to 21
million, out of which females represent around 4.5 million.

Egypt’s workforce (in thousands)

 2001 2002 2003 2004
Male 15219 15544 16169 16390
Female 4119 4333 4533 4785
Total 19339 19878 20703 21176
 The presence of 16 universities, both local and foreign, coupled with a large number of
specialized technical institutions offers a large base of graduates, post-graduates, and
technicians that form a rich workforce for investors.
 A hospitable, safe living environment with good quality housing at competitive costs
providing expatriates and their families with a comfortable living environment.
 Developed health care institutions and quality educational institutions including British,
American, German and French schools and universities.
 A pleasant, warm climate all year round, allowing for outdoor recreational and leisure
activities along with magnificent beaches, both on the Mediterranean and the Rea Sea. In
addition, Egypt possesses an incomparable historical and cultural heritage, with one third of
the world's monuments offering residents a source of rich, cultural experiences.
1.4 Technological Variables: (industry specific)

Egypt currently boasts a well-developed infrastructure according to world standards.

 Electricity
 Egypt has the highest electrification level in the African continent, with almost 100
percent of the rural population electrified. This is in contrast with an electrification level
of around 33 percent of the rural areas in the developing world.
 Currently electricity coverage is extended to all part of Egypt. Almost all the entire
population has access to electricity.
 Egypt has an excess in power generation capacity which currently stands at 16. 65 GW.
 Power generation depends on the availability of natural gas which Egypt has in
abundance. Hence our electricity prices are listed amongst the cheapest in the world (3
cents / kw. hr. ).
 Egypt’s unified national grid covers all industrial zones, new communities and villages.

 Natural Gas
 Egypt’s natural gas sector is expanding rapidly, having more than doubled between the
year’s 1999 and 2003. In Fact, many senior economists predict that Egypt is currently on
course to becoming the world’s sixth largest natural gas exporter by the year 2006.
 In light of major recent gas discoveries, the Egyptian Government released a revised
estimate of its proven natural gas reserves, placing the figure at 62 trillion cubic
feet. Furthermore, it is estimated that potential gas reserves may amount to 120
trillion cubic feet. This substantial rise in natural gas has spurred the government’s
drive to explore its export potentials.
 In July 2003, Egypt concluded its first export deal of natural gas to Jordan via pipeline
that extends from El-Arish to Aqaba, and is currently negotiating export deals with Syria,
Lebanon, Turkey and Israel via extensions of that same pipeline. The government
predicts that export revenues from the sale of natural gas to Jordan alone could total
around US$ 100 million in 2004. Meanwhile, exports of natural gas to Europe and the US
are projected to bring in annual revenues of US$ 600 million by fiscal 2007.
 Alternatively, Egypt could export its natural gas through the construction of
liquefied natural gas (LNG) plants. Currently, two such LNG projects are under
construction. Egypt asserted that around 70% of the work on the Damietta liquefied
natural gas (LNG) plant, owned by the Spanish Egyptian Gas Company ( a
consortium headed by the Spanish power giant, Union Fenosa ) has been concluded.
Subsequently, exports of natural gas to Spain are due to commence in late 2004. The
second LNG export project ( “ Egyptian LNG”), at Idku, is to be constructed by a
UK company, the BG group, in partnership with Petronas, a Malaysian firm. About
45% of the work on this plant has been completed and exports are due commence to
France in September 2005 and to the US and Italy

 Telecommunications
 Egypt’s IT industry has been one of the fastest growing in the world. In 2000 the
government announced a three-year plan to make the country a regional information
technology (IT) hub. The plan was supplemented by Egypt’s signing of world Trade
Organization Basic Telecommunications Agreement in June 2002 thereby committing
itself to greater liberalization of the sector. As such, the telecoms network has undergone
extensive modernization in recent years. In April 2003, Egypt became the 59th member
of the WTO IT Agreement, undertaking to remove all tariffs, duties and charges on IT
imports by January 2005.
  Under the national IT plan, the government aims to raise software exports from US$ 100
million in 2002 to US$ 1 billion within three years.
 Already over 5,500 new graduates have entered the sector since 2000, owing to the State-
financed IT training programs, which are certified by multinational IT companies.
 The efforts of the Egyptian government towards encouraging private participation in the
provision of services lead to a swift rollout of modern telecommunication networks
throughout Egypt. The number of installed telephone lines is currently around 11. 2
million lines, with more than 100 % digitization giving rise to tele-density of around 12.
6% on a nationwide average that goes up to 23. 1% in big cities and industrial zones. In
fact, Egyptian fixed – line telecommunication services are among the fastest growing in
the Middle East and North Africa (MENA) region.
 The GSM network of the three mobile phone operators has covered more than 90% of the
populated area in Egypt. Access to digital leased lines, Frame relay and ATM can be
provided in all cities in Egypt from any of the licensed operators. Access to internet
services can be provided by any of the 180 ISPs working throughout Egypt.

 Roads
 Throughout the centuries, Egypt has been a centre of worldwide transportation, and the
connecting link between the eastern and western civilizations. Egypt’s strategic location,
as a meeting point between the three old world continents of Africa, Asia and Europe, has
recently stimulated the construction of major inter-regional and national road networks.
 Egypt boasts a well-developed road system connecting the major population centers.
 Egypt’s system of highways has almost trebled over the last two decades, to about 44 000
km up from 15300 km in 1981. .
 It’s network of highways and inter-city roads carries 85% of domestic freight and 60% of
passenger travel.
 Currently a 113- km Greater Cairo Ring Roads is linking all highways between Cairo and
other cities.
 Six BOT roads projects have been offered – for the construction of roads (between
Saloum and Natroun / Alexandria and Fayoum,/Dayrout and Fayoum / Aswan and
Dayrout / Dayrout and Farafra and / Kharga and East Oweinat).
 At the end of 2001, 14 bridges has been constructed to connect the roads networks across
the Nile at 10 locations, 65 flyovers on the road network, 107 movable bridges over
waterways, 991 stationary bridges over waterways, and six tunnels.
 On December, 2002 The Aswan Suspension Bridge over the River Nile has been opened
officially.
 Bridge projects are also currently being carried out across the Suez Canal, greatly
facilitating the traffic of individuals and goods, and acting as a strategic link between the
African and Asian Mubarak Peace suspension Bridge and new al-Ferdan Bridge. Jointly
financed with Japan, the four – lane, 9. 5 km Mubarak Peace suspension bridge over the
Suez Canal near Ismailia. The al – Ferdan Bridge,on the other hand, is currently the
longest rotating metal bridge in the world, and is expected to accommodate over network
linking North and West African countries.
 Egypt is establishing a system of highway networks to facilitate access whether in Africa
or Asia through:
1-North coast highway which connects the coastal cities from Al Arish to Libya which is
in its final phase The Mediterranean coastal road is being renovated as it forms part of the
link between North Africa and Europe’s Mediterranean road network via the Gibraltar
crossing.
2-Egypt is already connected with Asia on its east side from Nuwaibaa – Al Aqaba,
Sharm El Sheikh- Al Aqaba and currently is planning to link Hurgada with Aqaba
 through barrages that have transported 650. 000 passengers and thousands of cargos in
the year 2003.
3-At the moment, Egypt is setting a 380 Km 2-way highway linking Suez to Port Sudan

 Railway Networks
 Egypt has the world’s second oldest railway networks in the world and the oldest in the
Middle East and North Africa region.
 The railway network has expanded from 8. 600 km in 1989 to 9. 432 km in 2003 to
connect 75% of the cities, towns and villages throughout the country.
 The main recent developments in that sector include the twin – track Upper Egypt line
from Assiut to Aswan, some 505 km long.
 The network carries some 800 million passengers per year or around 2-3 million
passengers each day, in addition to some 12 millions tones of goods annually.
 A new computerized reservation system for air-conditioned trains has been introduced at
the main stations, by the end of 2004, it is projected that the number of stations servicing
the country will double from the current number of 16 to a total of 32 stations.
 Studies are currently being undertaken for the connecting of Egypt and Sudan through
railways. This way, Egypt will be connected from the north to the south of Africa by an
extended system of land and railway transportation

 Maritime Ports
 Egypt’s strategic geographical location has also played a pivotal role in the development
of its maritime transport sector. Overlooking both the Mediterranean and Red seas –
which are linked by the Suez Canal – Egypt, soon began to play a dominant role as a key
maritime route at the international level. The government encourages the establishment of
a great maritime industry by inaugurating new ports and supplying them with the latest
high-tech equipment to handle cargoes and passengers. Today, there are 41 ports in Egypt
divided into Commercial, Ore, Petroleum, Fishing and Tourist ports.
 Egypt’s seaport have a total cargo handling capacity of about 22 million tones / year.
Other important ports include Dekheila, which is a natural extension to the Alexandria
Port, Damietta Port which has the largest container terminal, and port Said and Suez Port,
which are situated at both ends of the Suez Canal.
 Recognizing the need to expand the total handling cargo capacity of Egypt’s ports, the
government commissioned the construction of two privately run ports at Ain Sukhna,
equipped and operated under a 30 – year BOOT concession by a consortium led by
Stevedoring Services (US), was officially opened in October 2002.

 Airports
 Since 2002, the Egyptian aviation sector has been undergoing a through overhaul,
including the creation of a new Ministry of Civil Aviation. In addition, Egypt Air, which
dominates the aviation sector, has become a holding company with six affiliates, and has
undertaken a reshuffling of top-level management.
 In March 2001, a comprehensive plan for airport modernization and development was
initiated so as to accommodate the projected rise in tourist numbers.
 The $235 million program, projected to last for three years, involves the upgrade and
expansion of four international airports in the south and east. A further $51 million was
earmarked for a two-phase scheme to set up an operational database system in Cairo and
a central control centre that would link six regional airports to the capital.
 Another $350 million-400 million project aims to build a third terminal for Cairo
international airport.
  The new terminal will consist of three runways, two arrival and departure halls, and a
transit hall and is projected to enlarge Cairo International Airport's capacity by 11 million
passengers, to a total of 20 million passengers a year.
 The government also announced a US$2bn, four-year program aiming to upgrade 16 of
its 19 airports and to build seven new airports on a BOT basis

 Potable water and sanitation strategy

The Egyptian government, realized the importance of providing potable water and
sanitation services to all citizens, reducing losses in potable water from deteriorated
networks, increasing productivity and extended availability of water and sanitation to
Egyptian villages planned to be completed by year 2003. Current situation for potable
water and sanitation:
 Egypt has 217 cities that are 100% covered by potable water network, while the
sanitation network covers only 38%.
 There are also 4617 villages,43% of which are covered by potable water network while
sanitation network is extended to only 4%.
 The government’s plan up till the year 2012 regarding potable water and sanitation is :
 Management of existing assets & facilities.
 Replacement of depreciated plants & networks.
 Establishment of new projects for the new communities.
 The plan includes LE 18 billion out of which LE 9 billion is allocated for potable water
projects while LE 9 billion will go for sewage treatment.
The government invites the participation of the private sector in the operation, maintenance,
replacement of plants and networks in different provinces, and connecting houses with networks.
The government’s plan is to enhance the role of the private sector in developing this field.