As we watch a new Egypt in the making we speak to Yehia Zaki the Director of Operations of Dar Al Handasah about the expansion of the Suez Canal, the creation of more than 1 million jobs and the potential for an "industrial awakening" throughout Egypt. He takes us through the stage by stage process of the master plan & the infrastructural and investment requirements for the realisation of this enormous undertaking.
At the conference, you launched the Master Plan for the Suez Canal Zone in front of the President and the 2,500 delegates from around the world. What was the response and what has been the progress that has been made since then?
The project had maximum exposure at the conference. Having the President attend the presentation gave it that much more emphasis. It was, in fact, a challenge to present the project at the conference because at the time, the Master Plan wasn’t completed yet. When we had the meeting with the President in February, he asked us to present the project full-fledged. For that reason, the next day, we gave 4 workshops in our sector in addition to the presentation we made on the night of the 14th of March.
This presentation attracted the attention of many people, although the project already garnered a significant amount of attention from Day 1, when it was announced in August 2014. Presenting the Suez Canal Zone Project as we did at the conference, alongside with the workshops, gave reassurance for the Megaprojects and how they are handled.
What sort of international attention did you have in terms of investors who are truly ready to invest in the project?
We must have done something right in the beginning. When we started this project, it was a crash program which we completed in 6 months. We began by contacting workshops where we wanted to involve all of the potential stakeholders. We wanted to know their vision and what it was that they needed- whether they were local or international investors, civil society or any other stakeholder with a relation to the project. We did not want to work behind closed doors and propose a surprise. The vision of the project was not our vision alone. It is the combined vision of the many people who have been involved. Local and international investors were aware of the project and the opportunities it presented, hence they contributed monetarily. It’s been the building up of a story, and now this story is reaching realization. Following the Egypt Economic Development Conference, the project is seen as even more attractive and we have received more responses from various investors.
We still have many presentations to make, workshops and special conferences for this project. The EEDC was only the beginning.
Is your company responsible for doing all of the promotion for the project?
Part of our task is to present the client (The Suez Canal Authority), a media plan with proposals on how best to market and promote the project. This was one such task that initiated from Day 1 which was called a phased media plan. The actual implementation of the media promotion is the responsibility of the client and the new organization that will head the project, the Suez Canal Zone Authority, which will be formed in the next 2 weeks.
You’ve mentioned the deliverables and the goals of the project as there are 2 major milestones in 2030 and 2050. However, what are some short-term goals? When do you expect the groundbreaking to happen and when to you expect some of the factories to be built?
The 2 milestones in 2030 and 2050 are for strategic development of the area. This is slightly different than the actual Master Plan that will be developed. There is a strategy in place of what should unfold up to 2030. Once that is realized by 2030, or earlier, the other strategy for beyond that will take place. 2030 is a milestone which is phased in groups of up to 5 years. For every 5 years, there is a specific plan for the related infrastructure requirements to realize this plan. The first priority plan, which is for 2020, will start within a month or two when the enablers are ready.
What sort of investment is expected for the 2030 milestone?
There are a number of categories here. As this project is related to ports, there is investment in ports and infrastructure. There is also investment in industrial areas. It depends on the particular area. In infrastructure, we have expectations for investments of 15 billion for up to 2030. That covers power, water, desalination, and sewage requirements. To develop the 6 ports, 25 billion of investment is required. A huge area of industrial development is also to be realized by 2030- the bulk of which will be in East Port Said, El-Sokhna and El-Adabiya. Industrial development in East Port-Said, northwest of the Suez Gulf in the El-Sokhna area, is also expected. According to our studies, that area will generate about 1 million jobs in the coming 15 years. To create this number, you need another 15 billion of investments in industrial zones.
Collectively, more than 50 billion is required to realize the Master Plan after 2030. However, it depends on market demand and how quickly the enablers move.
This Zone is creating the infrastructure for a huge industrial hub to be centered in Egypt. Do you feel that this project is going to start an industrial revolution in Egypt?
The Zone should create an industrial awakening. It’s actually part of the Master Plan. In different locations, we have a total area of 460 square kilometers that we’re developing. There are certain areas of committed projects and developments. Part of our strategy is to honor whatever is already operating and integrate it into the Master Plan. We have very strong reasons to believe that industry can act as a hub in the area. Carbon Holdings is working on a heavy industry project which is in our Master Plan in El-Sokhna in the Suez area. That project can act as a catalyst for quite an interesting development to take place.
It’s been recognized by stakeholders and investors that there needs to be some reform on the law, which will be happening in the next few weeks. What do you feel are the most important amendments that need to happen?
We’ve proposed a new law to govern this area. When we studied laws as precedents, we discovered a law from 2002 in the Economic Zone, which is an excellent model to follow. It has perfect incentives and is exactly what we need for this area. However, we needed to examine the problems with applying the law. We had to recommend some amendments to the law to make it easier for implementation. This law has gone through the rounds of discussions and is awaiting a decision. It’s in its final stages right now.
Do you feel that the law is going to be enough in terms of reforms? Is it going to be favorable for investors?
It will enable the new authority to act in a more investment friendly environment. More importantly, it will give the authority power and will act as a real one-stop-shop. This is the secret for the success of this project.
What do you mean by a “real” one-stop-shop?
There is a difference between real implementation and intention within the administrative set-up of the new authority. This authority will issue, for instance, building licenses. However, it will not act by receiving a request, processing the paperwork and reverting back with an approval. The authority will have mechanisms to give environmental approvals but will not receive applications, process them and give approvals or disapprovals. The authority is insisting that most of the issues related to security or national issues are under its control and done within their administration. Whether it is customs, financial services or banking, the law has been created to give strong rules to facilitate and manage the real one-stop-shop. This is to differentiate it between an office that is a recipient and does the processing.
There a lot of Free Trade Zones and shipping hubs and special economic zones in the region and around the world. What do you think makes the Suez Canal Expansion Project and Suez Canal Zone unique?
Firstly, among our studies that examined other areas around the world with similar projects, a certain study in particular gives assurance about the visibility and attractiveness of the Suez Canal Expansion and Zone Project. Secondly, investors have been knocking on our doors and asking about it from an early onset. Everyone is quite interested and eager. There are a number of industrial developers that are holding their decision to build a new factory as they are waiting for the Zone to be integrated. Interested parties have done their homework, which makes us feel more relaxed and confident.