ESIS extension / Egypt / Alternative Networks / Update Memo 3

The following report outlines new developments in the past three months and the state of on-going developments.

It was mentioned in the relevant report of the first quarter that "Telecom Egypt" is the sole provider of certain telecommunications services in Egypt, whereas the mobile telecommunications and the pay phones were recently being liberalized. Furthermore, it was clarified that the current legislation does not allow the production and commercial exploitation of alternative telecommunications networks.

Given the above-mentioned legal barrier, none of the major public utility suppliers in Egypt has so far developed an alternative telecommunications network. However, in view of the forthcoming liberalization of the telecommunications sector, it is expected that there would be good opportunities for organizations to enter the field.

With this rationale, it was decided to briefly describe the major developments of the said public utility organizations, even though these may not directly relate to either the Information Society, or the concept of alternative networks.

During the past few years, the Egyptian government has exerted great efforts to encourage investments in the private sector. Due to this encouragement, the capability of Egypt’s private sector has greatly increased and its activity has expanded. It is indicative to mention that during 1996/97 private sector investments accounted for about 51% of total national investments.

Egypt adopted economic reform policies in the framework of which stabilization, structural adjustment and privatization programs were integral components of the economic packages negotiated and agreed upon with the International Financial Institutions (IFIs), namely the World Bank and the International Monetary Fund (IMF).

In the near future, the government intends to start the privatization of Telecom Egypt, selling a total of 20% of the company’s stocks by the end of the year 2000. Of the total number of stocks to be sold, 33% would be directed towards the local market, while the remaining 67% towards international investors.

4. Inventory of the major "public" utilities with a potential for use in I.S. applications

There is on-going work on the linkage of Egypt's electricity network with other countries in the region, including a $239-million link with Jordan which was completed in October 1998. This is the first phase of a five country interconnection of Egypt's system with those of Jordan, Syria, Turkey, and Iraq, and it is scheduled to be completed by 2002.

Furthermore, electric load tests have been conducted on the Egypt-Jordan linkage line which is operational. Jordan has already completed the final stage of the high-tension 500 MW cables project. The cables were mounted across the Suez Canal on giant 220m high towers.

A 500 MW, 330 km power transmission line between Suez and Taba has been completed at a cost of LE 150 million. A power transmission line from Alexandria to As-Salloum has been completed. Both national networks have been linked with a 420 km line. Four giant transformer plants have been set up at Al-Amereya, Al-Alamain, Marsa-Matrouh and As-Salloum. Final tests are underway to operate the electrical links of the 170 km line between As-Salloum and Tobroq.

Egypt has a strategic importance because of its operation of the Suez Canal and Sumed (Suez-Mediterranean) Pipeline, these being two routes for export of Persian Gulf oil. Tanker traffic and revenues have declined in recent years as a result of competition from oil pipelines and the alternate route around the Cape of Good Hope in South Africa.

The Suez Canal Authority (SCA) carries on with enhancement and enlargement projects on the canal. The canal has been deepened so that it can hold the world's largest bulk carriers. Deepening works are expected to continue.

The Sumed (Suez-Mediterranean) pipeline is an alternative to the Suez Canal for transporting oil from the Persian Gulf region to the Mediterranean. The 200-mile pipeline runs from Ain Sukhna on the Gulf of Suez to Sidi Kerir on the Mediterranean. The Sumed's original capacity was 1.6 million bbl/d, but with the completion of the Dashour pumping station, located south of Cairo, capacity has increased to 2.5 million bbl/d. The pipeline is owned by the Arab Petroleum Pipeline Company (APP), a joint venture between Egypt (50%), Saudi Arabia (15%), Kuwait (15%), the U.A.E. (15%), and Qatar (5%). The APP also has been increasing storage capacity at the Ain Sukhna and Sidi Kerir terminals.

The most ambitious idea for gas exports is a sub sea Mediterranean pipeline, which would connect Egypt with Israel and Gaza, with the possibility of eventual links to Lebanon, Syria and Turkey. On December 22, 1999, an agreement was announced on the gas exports from Egypt to Israel and Gaza. A pipeline is to be extended from El-Arish in Sinai to Israel and Gaza, initially supplying gas-fired power plants along the coast. Construction is due to be completed by early 2002.

Please note that this report has been prepared under the sole responsibility of the ESIS II contractors.
It does not necessarily reflect the views of the Commission, nor does the Commission accept responsibility for the accuracy or completeness of information contained herein.
The ESIS Team of contractors welcomes any additional information or corrections.