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Egypt Infrastructure Report Q3 2009Product Type: Market Research ReportPublished by: Business Monitor International Published: June 2009 Product Code: R302-6494 Description The Egyptian government has recently announced that it is going to double its planned EGP15bn(US$2.65bn) stimulus package, but the support is not going to prevent the country’s infrastructure activityfrom slowing almost to a stop. Government spending will naturally provide some help, but the projectswon’t be ready to launch just because money is available to pay for them. BMI expects constructionspending to grow a mere 0.15% in 2009, and we do not expect the growth rate to get above 2% until2013, when it should reach 3.25%. Construction will deliver a smaller and smaller portion of GDP overthat period.The government, perhaps determined to make sure the sector doesn’t get too gloomy, announced a seriesof expensive projects recently. According to The Daily News Egypt, it has ambitious plans for newhighways, new railroads and new and renovated airports. However the announcements have not put atimescale on the proposed plans. In January 2009, the World Bank announced that it will lend Egypt US$600mn for the construction ofthe Ain Sokhna power plant. The World Bank loan will be partly financed by the African DevelopmentBank and the Arab Fund for Economic and Social Development. The loan is to help the EgyptianElectricity Holding Company (EEHC) finance plant, which will be of the 1,300MW supercritical steamturbine variety. The plant will consist of two 650MW turbines and will be mostly powered by natural gas. The plant will be managed by the East Delta Production Company, a subsidiary of EEHC, and isexpected to be completed in 2013. There has been a clear strategy of constructing power plants in Egypt recently, and the World Bank notesthat 1,300MW of new capacity is being installed per year. In March 2009, as reported by Reuters,Egyptian construction firm Orascom received a contract to construct a US$258mn 1,300MW thermalfiredpower plant in Alexandria. The client for the project is the state-run West Delta ElectricityProduction Company, which is currently constructing a number of power plants in Egypt and Algeria. The projects will have a combined generating capacity of 4,150 MW. The latest quarter brought more concrete developments in the energy sector than it did in the transportarea. Yokogawa Middle East, for example, said it has a contract to provide equipment to upgrade fivestations, and the Arab Investment and Development Co. has filed an application to build the Safaga coalfiredpower plant. BMI has slashed its 2009 and 2010 growth forecasts in the light of the ongoing global economicslowdown. Also driving is to do this is the deteriorating security situation in the Gulf of Aden, which isthreatening Suez Canal traffic. Going forward, GDP will slow to a full-year rate of 3.7%, and then fallfurther to 3% in 2010. Table of Contents
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