Egypt initiates process to privatize airports management and operation: Cabinet

Amr Kandil , Tuesday 5 Mar 2024

The Egyptian government has taken steps to offer the management and operation of the country's airports to the private sector, according to a statement by the Cabinet on Monday.

Cairo International Airport.
File Photo: Cairo International Airport. Photo courtesy of Cairo Airport company website.


As part of this effort, the Cabinet is reviewing a list of leading consulting firms, discussing the technical and financial evaluation criteria, and exploring a proposed initial framework for the bidding timeline.

The firms will be tasked with developing a comprehensive vision for the offering process, the Cabinet said.

In recent years, Egypt has been working to enhance the role of the private sector in the economy, including the transportation sector.

Last year, Prime Minister Mostafa Madbouly unveiled the plan to privatize airport management and operation, discussing the initiative with representatives from over 20 transportation, logistics, and maritime navigation companies.

Improving asset management

In TV remarks, Cabinet Spokesman Mohamed El-Homosany stated that the plan to privatize airport management is aimed at improving asset management and enhancing services for tourists and other travellers.

He also highlighted that the decision is part of the government's efforts to accommodate an expected increase in the number of tourists in the future.

The Egyptian Civil Aviation Ministry has reported a 28 percent surge in passenger traffic through Egypt's airports in 2023, to nearly 47 million passengers, compared to the previous year.

Additionally, the number of flights passing through Egyptian airports rose by 23 percent, reaching 365,000 flights.

Cairo International Airport, which served over 26 million passengers through 198,000 flights last year, is included in the privatization plan.

Request PM appear in House

The Cabinet's decision to privatize airport management has sparked controversy on social media.

While some commended the move for its potential positive impact on services provided, others viewed it as a failure in the government's ability to effectively manage its assets.

On Monday, media outlets circulated an urgent statement by MP Mostafa Bakry, addressed to the prime minister, requesting his presence in the House to explain the decision.

Bakry called on the premier to clarify the effects of this decision, including on workers at airports, and whether it implies that the government is no longer capable of effectively operating vital institutions.

He also sought clarification on whether this move signifies the beginning of a broader trend of privatizing management in other strategic institutions.

El-Homosany assured that the privatization process would not impact the rights of workers at airports.

He emphasized that offering the management and operation of airports to experienced and competent private sector companies is a common practice followed by many countries and does not represent a selling of state assets.

Egypt already has Marsa Alam International Airport on the Red Sea, which is privately owned and operated by a subsidiary of Kuwait's Al-Kharafi Group.

Empowering private sector

Over the past two years, the Egyptian government has taken measures to reduce state involvement in various sectors, including transportation, as part of the State Ownership Policy Document approved by President Abdel-Fattah El-Sisi in late 2022.

As part of the document, Egypt seeks to double the private sector's contribution to the country’s economic activities to 65 percent within a couple of years.

Grappling with foreign currency shortages, Egypt has offered many state-owned companies to the private sector.

In December, Prime Minister Madbouly announced that the country secured $5.6 billion from the recent partial and full sale of stakes in 14 state-owned companies.

He also revealed that the government, in collaboration with the International Finance Corporation (IFC), conducted preliminary studies on 50 state-owned companies for future offerings.

Attracting investments

Meanwhile, Egypt has implemented measures to optimize the utilization of state assets and attract foreign currency investments.

Last month, the government signed a mega $35 billion foreign direct investment deal with the Abu Dhabi Development Holding Company to develop the Ras El-Hekma area on the North Coast.

The government hopes the deal, representing the largest foreign direct investment (FDI) in Egypt’s history, will help alleviate the country’s current severe shortage of hard currency.

The shortage of foreign currency over the past two years has resulted in significant price hikes for commodities, medicine, and other goods.

Shortages also raised concerns about Egypt's ability to meet its monetary obligations requiring foreign currency.

The Cabinet, however, has repeatedly affirmed the state is capable of meeting such commitments.

As of December, data from the Central Bank of Egypt revealed that the country is due to pay $32.79 billion in debt service in 2024, with total debt reaching $164.73 billion by the end of June.

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