Egypt Infrastructure Report Q3 2008

Data from the Ministry of State For Economic Development, show a tremendous surge in private and public investments into the economy the past two years. The construction sector was in fact the third fastest growing after the hospitality sector and the investments in the Suez Canal. With major privatisation and investment activity expected in the Egyptian infrastructure sector during 2007-2008, this uptrend is likely to continue. In BMI's Q308 Egypt infrastructure Report we forecast that Egypt's domestic construction industry will grow by 3.63% in 2008, reaching a value of EPG32.3bn.

The government has embraced build-operate-transfer (BOT) schemes as a means of shifting the burden of its massive infrastructure plans to the private sector. This is rapidly becoming the procurement method of choice for new power stations, airports, roads and water schemes. Recent state initiatives to evolve an integrated transport strategy, boost industrial production and implement new oil and natural gas projects, have added impetus to the rising infrastructure investments. It is however the country's ports that have been in the spotlight lately, with major international port operators looking to exploit the country's strategic asset, the Suez Canal. The growing tourist arrivals to Egypt - expected to reach 15mn visitors per annum by 2010 - has also made the local hotels and resorts industry a hotbed for foreign investment.

Last but not least, developments are also taking place in the residential side, as Egypt's growing middle class is (timidly) beginning to increase demand for more housing.

In spite of a large number of reforms in recent years, which have undoubtedly improved the investment climate significantly, Egypt's business environment continues to bear the legacy of years of statedomination of the economy and a strong public sector focus. Egypt ranks 105th out of 180 states surveyed in Transparency International's Corruption Perceptions Index 2007, comparing unfavorably with regional peers. The labour market is relatively inflexible, with Egypt performing markedly worse than the OECD average. Bureaucracy is a major issue for foreign companies, with legal and property transactions often subject to severe delays, and there is evidence of a public backlash against the pro-market reforms.

Strikes are increasingly common, epitomised with the events in Mahalla al-Kubra, an industrial city outside Cairo in April 2008, and a generalised anti-Western sentiment could also make life difficult for investors. Our Middle East and Africa Business Environment Rating takes the above factors into account and for this reason, Egypt ranks just below average at 8th place, being held back by low scores in country risk variables (legal frameworks and corruption) and a below average infrastructure rating.

According to BMI's forecast, the economy will grow by 6.7% in 2008. Inflation and higher interest rates, as mentioned, represent a serious downside risk to our forecasts.

• Market Overview
• Construction Inflation Continues To Rise
• SWOT Analysis
• Egypt Infrastructure Industry SWOT
• Egypt Political SWOT
• Egypt Economic SWOT
• Egypt Business Environment SWOT
• Major Infrastructure Developments And Key Projects
• Transport Infrastructure Overview
• New And Ongoing Projects
• Ports
• Rail Networks
• Energy & Utilities Infrastructure Overview
• New And Ongoing Projects
• Power Plants And Transmission Grids
• Oil And Gas Pipelines
• Water
• Construction Overview
• New And Ongoing Projects
• Residential Construction
• Industrial Construction
• Tourism Construction
• Major Projects
  • Table: Egypt Major Infrastructure Projects Transport
  • Table: Egypt Major Infrastructure Projects Utilities
• Industry Forecast Scenario
  • Table: Egypt--Economic And Construction Data
• Risks
• Business Environment
• Regional Overview- Middle East and Africa
• Business Environment Ratings Table
• Regional Infrastructure Business Environment Ratings
• Limits Of Potential Returns
• Risk To Realisation Of Potential Returns
• Foreign Direct Investment
• Labour Force
• Legal Framework
• Tax Regime
• Macroeconomic Outlook
  • Table: Egypt - Economic Activity
• Political Outlook
  • Table: Egypt Political Overview
• Company Monitor
  • Table: Egypt Key Players
• Arab Contractors
• Orascom Construction Industries
• Hassan Allam Sons Group
• BMI Forecast Modelling
• How We Generate Our Industry Forecasts
• Construction Industry
• Sources
• Business Environment Ratings
• Ratings Overview
  • Table: Infrastructure Business Environment Indicators