Egypt parliament approves law encouraging private participation in infrastructure projects

Gamal Essam El-Din , Monday 15 Nov 2021

The Egyptian parliament approved on Monday new amendments to the law regulating the participation of the private sector in infrastructure, service and public utility projects.


A report prepared by the House's budget committee said the new legislative amendments will allow the private sector to work on designing, funding, implementing, operating, utilising and maintaining public projects.

"The amendments also allow the state's administrative system to award contracts to private sector companies in a much easier way to implement most infrastructure projects in transport, electricity, communications, information technology, water, sanitary drainage, education, etc," said the report.

The amendments also cover PPP (public-private-partnership) projects.

"A joint committee comprising specialists from the ministries of finance and planning will be entrusted with selecting a number of PPP projects every year and to be part of the annual socio-economic development plans," said the report.

Planning Minister Hala El-Said said in a plenary meeting on 17 October that private sector participation in infrastructure projects will be governed by feasibility studies reflecting national priorities and the state's Vision 2030 agenda.

El-Said also indicated that the amendments were drafted in a way that made sure they do not contradict with the law regulating the performance of the Sovereign Fund of Egypt (TSFE), which aims at maximising the profitability of the state's unutilised assets.

The law, which was provisionally approved on 17 October, received final approval on Monday when MPs and the government reached common ground on Article 17.

The final text of Article 17 states that "the cabinet shall have the power to exclude from the articles of this law the infrastructure, service and public utilities contracts awarded by administrative units to Egypt's Sovereign Fund."

This final text received approval from Minister of Parliamentary Affairs Alaa Fouad and several opposition and majority MPs.

Chairman of the budget committee Fakhri El-Fiqi explained that the new amendments will help simplify procedures required for winning project contracts and eliminate administrative obstacles which will make it much easier for private companies to tap into the field of mega projects.

El-Fiqi said the participation of the private sector in implementing infrastructure projects will be very important in the coming stage.

"The value of infrastructure projects in Egypt reached EGP 6 trillion over the last six years and is expected to double in the next few years," said El-Fiqi, noting that "PPP projects, in particular, have become a major part of the government policy because it relieves the state budget of gross financial burdens and widens the scope of private participation in mega-development projects."

The House's deputy speaker Mohamed Abul-Enein said it is very important that the government eliminate bureaucratic obstacles standing in the way of the private sector implementing infrastructure projects.

"This law encourages private investments in mega development projects which generate a lot of job opportunities," said Abul-Enein.

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