Egyptian President Abdul Fattah Al Sissi declared August 6 a national holiday as millions of Cairo residents congregated to celebrate the grand opening of the much anticipated New Suez Canal. But the revelry — marked by flyovers, fireworks, and other nationalistic festivities — wasn’t just an acknowledgement of the newly completed 35-kilometre canal.

Instead, it was Egypt’s way of proclaiming proudly to the world — “We’re back.”

This optimism, however, pervades not so long after a period devoid of even the slightest inkling of political or economic confidence. From 2011 to 2014 — an era known as the Egyptian Crisis — it saw three different governments, nearly 6,000 related deaths, and innumerable fervently enraged riots. Under such geopolitical turmoil, Egypt seemed anything but prime for a simple visit to the pyramids, let alone ripe for international investment.

But in just the past 14 months, Sisi and the government have planned and delivered initiatives with unarguable conviction, thus restoring faith in not just the Egyptian government’s existence, but more importantly, its efficacy.

The New Suez Canal, for example, was originally set to take three years to construct. For Sisi, this timeline was two years too long — he pledged it would be completed in one year. As such, construction began on August 5, 2014 and the opening took place on August 6, 2015.

Even though the government is still in its nascent stages, Egyptians hope the efficiency of the New Suez Canal’s construction and the fulfilment of Sisi’s promise will serve as a microcosm for the country’s future.

Khaled Attia, Partner at Sarie — Eldin & Partners is more than sanguine in his forecasts. “President Sisi is a leader with a vision. He’s keen to deliver to the people of Egypt, and more importantly, he has a strong government to do just that,” said Attia.

The government is also delivering social development initiatives, remedying the dire wastewater problems in the region. According to the European Bank for Reconstruction and Development (EBRD), less than 12 per cent of Egyptians in rural areas have access to proper wastewater treatment networks. In response, Sisi recently secured $1 billion from the World Bank as part of his National Rural Sanitation Programme.

“The new government is building credibility,” said Dalia Tadros, Senior Economist at the Egyptian Private Equity Association. “The Egyptian people will continue to have high trust as long as the government continues to materialise its promises into action.”

While Sisi has incubated an environment of confidence — and more importantly, of relative civil tranquillity — his goal of resuscitating an economy that was otherwise dormant in the years before him remains his ultimate vision.

Collaboration

To do this, the government is collaborating with the Ministry of Finance’s PPP (Private Public Partnership) Central Unit to deliver a host of PPP projects — ventures initiated by the public sector but funded and operated by a private organisation — in order to catalyse a fiscal recovery and spur economic expansion.

As of August, the PPP Central Unit has seven projects to be tendered by year’s end, including three desalination programmes, two information technology operations, a new contact centre, and a network of new river busses on the Nile River.

According to PPP Central Unit Director Atter Hannoura, the three desalination initiatives are aimed at making water available to areas lacking proximity to the Nile River, including developments in El-Tor, Safaga, and the Northern Coast. “It’s important for us to develop the entire state of Egypt, including the residential developments in rural areas. They need access to clean water, and we will do everything we can to provide it for them,” Hannoura said.

The two tech projects will be under the jurisdiction of the Ministry of Communications and Information Technology. One project will focus on the automation of nearly 90 commercial registry offices throughout the state of Egypt; the other will upgrade 400 notarization offices.

“The MCIT’s two projects are two of our core PPP projects,” said Hannoura. “They are another brick in our e-government strategy to improve human services in the region.”

The Maadi Contact Center is another cornerstone of the PPP Central Unit’s zealous pipeline of projects.

According to Hannoura, the $210 million project will function as one of a series of technology parks to be built in several governorates in the coming years. “The Maadi Contact Center will allow us to reposition Egypt in the global call centre and business process outsourcing space,” said Hannoura. “It will also enhance exporting technology services to localities outside of Egypt.”

Finally, the Nile River Bus Ferry, a fleet of 41 newly purchased boats, will add to an incipient public transportation system in the nation’s capital, ideally redressing the pandemic that is the commute to and from work in Cairo.

Perhaps the most ambitious, however, is the Abu Rawash Wastewater Plant that was awarded last April as a joint venture to Orascom (Egypt), Veolia (France), and Aqualia (Spain).

Hannoura envisages the plant will convert 1.6 million cubic metres of wastewater per day. To put the grandeur of this vision in perspective, Hannoura points out the biggest wastewater plant in all of Europe can convert only 300,000 cubic metres a per day.

While delivering these seven projects — in addition to the Abu Rawash Wasewater Plant — may seem an onerous task, Art Smith, President of the National Council for Public Private Partnerships says this is all just a sign of things to come.

“These projects are just the tip of the iceberg,” Smith said. “The Egyptian government is building a much broader capacity in order to bring PPP projects to market.”

During this phase of deliberate recovery, the government is doing more than simply emulate the contemporary quantitative easing policies of Ben Bernanke, Sir Mervyn King, and Shinzo Abe.

A temporary economic Band-Aid it appears not; instead, the government has established it will play an active and enduring role in Egypt’s economy.

With such an aggressive fiscal strategy, Egypt is certainly betting big on itself — but they’re not the only ones at the table. According to Tony Pearce, Senior Advisor at the International Road Federation, the EU has recently revived funding for the project — Capacity Building of PPP Units in Egypt — to be carried out by consulting firm Sogerom SA.

Under the programme, 13 Egyptian ministries will receive thorough training on developing and executing PPP projects in the region.

Investments

According to Hannoura, other global entities, including the EBRD and the International Finance Corporation (IFC), are also getting involved. Each has already invested $100 million euros in Egyptian PPP projects.

“The EBRD and IFC are known to have some of the strongest due diligence protocols in the world. I don’t think they’d invest unless they were really confident in the market,” Hannoura noted. “Their investments are a reflection of trust in the Egyptian PPP structure as well as the Egyptian economy.”

It’s important to note, however, that the EBRD’s and IFC’s investments do not seem to be on the heels of speculation and blind forecasts, but rather based on the empirical evidence that suggests PPP projects in Egypt work.

According to Hannoura, the EBRD has already acquired nearly 21 per cent of the shares of Egypt’s first ever PPP project — the New Cairo Wastewater Treatment Plant from 2012 — further proving Egyptian PPP projects beneficial to residents and lucrative to investors.

Countries and institutions outside of Europe are also cognisant of the evolving market in Egypt; last March, the government organised the Egypt Economic Development Conference where 112 countries gathered to learn about the evolving economic and geopolitical landscapes in the region.

The delegates were evidently impressed, as Kuwait, Saudi Arabia, and the UAE each pledged $4 billion worth of investments to Egypt during the event.

While international investment is certainly indicative of an improving market, Egypt’s future is only as bright as its government is stable, its economy is robust, and its people are believing. If the celebrations for the grand opening of the New Suez Canal are any implication, the Egyptian people — for the first time in years — are finally excited about what’s to come.

“There are 90 million people here ready to turn things around,” said Tadros. “This is a market with a huge potential.”

The writer is Project Manager at IQPC. He is directing the third Annual PPP Investment Summit to be held on October 19 and 20 in Cairo.