Egypt diesel crisis threatens tourism in Red Sea city

Dalia Farouk, Saturday 4 Aug 2012

Hotel owners are worried that Marsa Alam which is heavily dependent on diesel for electricity generation will see few tourists during what is usually the high season

The Red Sea, Egypt's most popular touristic spots (Photo: Reuters)

Owners of hotels and resorts in Egypt's Red Sea city of Marsa Allam urged newly-appointed Prime Minister Hisham Qandil to resolve the diesel crisis affecting the town.

According to Ahmed Balbaa' member of Marsa Alam's Association for Tourism Investors, the fuel crisis started three months ago and in the past few days the shortages increased dramatically.  Balbaa there were expectations of electricity blackouts.

The Association for Tourism Investors are concerned about the negative effects on the tourism in Marsa Alam as the high season approaches.

Hotels in the Red Sea resort depend on diesel fuel to produce electricity through privately owned generators.

"Currently, [hotels'] occupancy rates are around 70 per cent, and should increase even more with the high season," said Balbaa.

Owners of resorts in Marsa Alam are concerned about the growth of the black market, where diesel fuel is sold at highly inflated prices.

"We've reached out to all governmental entities concerned with the issue, including the head of city council in Marsa Alam, but all in vain, " said Balbaa,  adding that Hurghada is also suffering from the same problem.

According to Mahmoud Abdel-Dayem, a managing director of one of the companies that own hotels in Marsa Alam, both state-owned companies COOP (Petroleum Cooperative Society Company) and Misr Petrol failed to abide by a contract through which they could have resolved the current crisis by supplying them with diesel fuel.

Abdel-Dayem blamed the current crisis on the absence of any supervisional entity to coordinate the solving of the problem.

Marsa Alam's airport was closed down on Friday after a number of Bedouin tribes blocked the roads leading to and from the airport to protest the disappearance of fuel in the city, and the massively inflated prices. Following the involvement of security, the airport was reopened several hours later.

During the past few days, many governorates in Egypt have been experiencing a continuous electricity cuts throughout the day. While the reasons remain unclear, President Mohamed Morsi urged citizens on Friday to cut down on their use of electricity until the crisis is resolved.

Tourism, one of the main sources of Egypt's revenue and employment, was badly hit during and after the 18-day popular uprising which ousted president Hosni Mubarak in February 2011.

Around 11.1 million Europeans visited the country in 2010, mostly through package tours to Red Sea resort cities Hurghada, Marsa Alam and Sharm Al-Sheikh.

Despite the recovery, the first-quarter figures were a sharp 27.8 per cent lower than those registered in the same period of 2010. The recovery has been faster in Sinai and at the Red Sea resorts.


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