Egypt needs to speed up attracting private investment

* Egypt plans aggressive expansion of private partnerships

* Minister says land allocation, decentralisation
obstacles

By Dina Zayed

CAIRO, Oct 12 (BestGrowthStock) – Boasting resilient economic
growth in the global downturn, Egypt has been an attractive
investment destination, but opening up more opportunities for
the private sector needs to speed up, a minister said on
Tuesday.

Egypt, which plans increasingly to rely on private
companies to provide social services and infrastructure through
public-private partnerships, has already simplified the
procedures for investment and pushed through new legislation.

But the speed at which the government has opened up
specific projects ready to be applied has not been fast enough,
hemmed in by opaque land allocation laws and ineffective
decentralization, Trade and Industry Minister Rachid Mohamed
Rachid said.

“I think Egypt has proven in the last six years it is a
good destination for investment. All the macro-indicators are
positive,” he told a media round-table. “The biggest challenge
is however … how fast and how effectively we can open up more
investment opportunities.”

Cabinet forecasts expect Egypt’s economy, which grew by 5.2
percent in 2009/10, to grow at least 6 percent this year as the
budget deficit dips below 8 percent of output. For more, see:[ID:nLDE68R09E]

But spending on its roads, rail network and ports has
failed to keep pace with fast population growth, now nearing 78
million, dampening its economic prospects.

Rachid, who said Egypt was “aggressively seeking” private
partners to help fill a human resource gap and revamp
infrastructure, had previously announced the government was
eyeing up to 50 billion Egyptian pounds ($8.8 billion) in
infrastructure projects in the next 18 months. [ID:nLDE68R03C]

But the country was “not moving fast enough, we need to
move faster,” he said.

LAND ALLOCATION

“We still have certain areas that need to be resolved
significantly. One of them is the way to deal with land in
Egypt,” said Rachid.

Concern about how land is allocated has been fuelled by a
wrangle involving Talaat Moustafa (TMG) (TMGH.CA: ), the
country’s biggest listed developer, after a court ruled the
contract for the sale of state land for its flagship Madinaty
project was illegal. [ID:nLDE68P0AW]

The cabinet upheld the court ruling to scrap TMG’s
contract, but said it would reallocate the land to the firm
under the same terms based on its right to act in the national
interest.

While the solution quelled some investor concerns, others
have asked for more assurances. The cabinet has said it was
eyeing a new law to manage land sales. [ID:nLDE68P08Z]

“We target that by the end of the year, we will have new
legislation and a new system of distributing land for all
activities, whether it is industry, trade, tourism, housing,
agriculture and so on,” Rachid said.

Another challenge was to improve efficiency outside of
central government agencies, he said.

“I think that will be the priority of the next period.”
(Editing by Dan Grebler)

Egypt needs to speed up attracting private investment