Investing in new mega projects has been a major economic feature for 10 years now. The economic crisis which intensified following the outbreak of the Russia-Ukraine conflict, manifesting itself in a scarcity of dollars and record inflation in 2023, inevitably raised questions over these expensive projects.  

In January, President Abdel-Fattah Al-Sisi clearly stated that mega projects were not to blame for the economic situation. “There isn’t anything unimportant that we worked on or any miscalculation that we made,” he said in a statement made just weeks after the government decided to postpone new projects with a large foreign currency component. In November, the cabinet again clamped down on foreign currency expenditure, stipulating that approval from the Ministry of Finance must be obtained before disbursement of foreign currency in any form.  

In May, the government decided to extend deadlines for the completion of the projects already underway to avoid imposing penalties on companies or suppliers for any delays.

“Ongoing and active projects cannot be halted as this would result in losses for the state. However, we are reorganising the priorities of new projects within the framework of our foreign currency resources,” said Prime Minister Mustafa Madbouli.

The past year saw ministries and government bodies move to the New Administrative Capital, a development hailed by President Al-Sisi as the “birth of a new republic”.

The new capital has been under construction since 2015. The government district in the new capital is designed to host 50,000 state employees and by November 48,108 employees had relocated there. With advanced technological infrastructure, data centres and other facilities, it cost LE100 billion.

President Al-Sisi stressed the new capital has not been built with government funds and that the Administrative Capital for Urban Development (ACUD) is the owner and developer of the project. ACUD is owned 51per cent by the military and 49 per cent by the government-affiliated New Urban Communities Authority.

“Currently, ACUD is asking the state for an annual fee of LE4 billion for use of the government district in the new capital,” the president said.

ACUD is poised to announce the winner of the bid for the second phase of the new capital, according to its Chairman Khaled Abbas.  

Abbas reported that ACUD made profits of LE18.5 billion after tax in 2022, and that the company’s assets were LE300 billion.

Vacated government buildings in Cairo will be repurposed. The seven-building complex that served as the headquarters of the Ministry of Interior for decades is being converted into a multi-purpose destination that includes a tech and business hub, a French university, serviced apartments and a hotel under a deal signed by the Sovereign Fund of Egypt (SFE) and real estate development company A Developments.

A 2020 presidential decree cancelled the public benefit status of former downtown ministry headquarters and transferred their ownership to the SFE which was established in 2018 to manage investment opportunities in state-owned assets.

In December 2021, Egypt signed a LE3.5 billion deal with a US consortium to upgrade the SFE-owned 14-storey Al-Tahrir Complex. A year later, the consortium announced it would invest $200 million to transform the complex into a luxury hotel.

The New Delta project, launched in 2023, is Egypt’s largest ever agricultural project. It aims to reclaim and cultivate 2.2 million feddans, equivalent to a quarter of Egypt’s current agricultural land. In early 2023, work began on digging a 174-kilometre canal to irrigate the area. The project has been described by officials as “Egypt’s food future”.

President Al-Sisi has said the cost of reclaiming one million feddans in the location is close to LE250 billion, while Water Resources and Irrigation Minister Hani Sewilam announced the cost of the watercourse, lifting stations, and the treatment plants would reach LE60 billion.

Work also continued on transportation projects. To make it easier for government employees to reach their offices in the new capital, a light rail train (LRT) came into service. Soon it will be supplemented by a monorail.

Following a pilot operation that began in January 2022, Egypt’s first LRT became fully operational in July 2023. The 100 km LRT links Cairo with the New Administrative Capital. It was constructed by the Ministry of Transportation and a consortium of Egyptian companies. China’s CREC-AVIC INTL manufactured the trains, and France’s RATP Dev is responsible for the management and operation of the line.

The monorail was initially set to open in 2023 but following delays constructing the first line, the East Nile branch will now commence operations by April 2024. Eventually the two-line monorail network will extend for almost 100 km served by 35 stations. The track alone costs $30 million per kilometre, according to the National Authority for Tunnels (NAT).

The East Nile branch extends for 56 km from Nasr City to the new capital while the West Nile will cover 44 km between 6 October city and Mohandessin. On 14 December, Transport Minister Kamel Al-Wazir announced that Egypt had taken delivery of 24 monorail of the 30 trains that will serve the second branch.

The monorail project has come in at a total cost of $4.5 billion according to Arab Contractors, one of three companies — the other two are Bombardier Transportation and Orascom Construction — involved in the project.

The two lines will have a maximum capacity of 45,000 passengers per hour in each direction.

Work also continued on the high-speed electric train network. In 2021, Egypt signed a contract with Siemens to build 2,000 km of high-speed electric rail track at a cost of LE 360 billion. The first of three lines, originally scheduled to be completed in 2023, is now expected to complete by the end of 2024.

The first line runs between Ain Sokhna, Alamein, and Marsa Matrouh and will allow passengers to travel 660 km in around three hours. The second line, connecting 6 October city to Abu Simbel, covers 1,400 km and is due to be ready by the end of 2025. The journey will take eight hours. The third line, for freight services, will run 225 km between Qena and Safaga.

The three lines of the 2000 km-long electric high-speed train network will be served by 60 stations, 41 high-speed trains, 94 regional trains and 40 freight locomotives.

The rail projects are part of Egypt’s plans to establish a sustainable, environmentally friendly public transportation network, said Al-Wazir.

The network will create a crucial logistical axis linking the Red and the Mediterranean seas and has been dubbed by some commentators as “the Suez Canal on rails”.

* A version of this article appears in print in the 21 December, 2023 edition of Al-Ahram Weekly