Abstract
Over millennia the presence of the River Nile has helped make Egypt one of the
Middle East' s region' s
economic superpowers, sustaining agriculture and
providing drinking water to support millions of people.
Now, however, the
country is rapidly turning into a victim of its own success, as a swelling
population
and growing economy make demands on water resources that are
proving difficult to meet.
The problem is compounded by the similar issues
being faced by countries upstream, such as Sudan,
Ethiopia and Uganda.
Increasing water demand there, resulting in a desire to extract more water
from the
Nile, may mean less water for Egypt and rising regional
tensions.
In an effort to respond to this bleak scenario, Egypt has
embarked on a programme to overhaul and
expand its creaky water
infrastructure and has restructured the government framework for the
industry.
International donor agencies are heavily involved in this,
providing technical support and major project
funding.
The creation of
the Egyptian Water Regulatory Agency (EWRA) to supervise water and
wastewater
provision and the Holding Company for Water and Wastewater
(HCWW) to enable the provision of
water and sanitation services has
created a more streamlined structure. This has been regarded as a
necessary precursor to attracting more private investment to the water
sector.
Thus far, private involvement in the industry remains limited to
contractors, taking advantage of the
myriad opportunities opening up as
new projects are rolled out. However, Egypt is close to launching its
first public-private partnership (PPP) project in wastewater treatment and if
this is a success others are
likely to follow. International firms are
keeping a close eye on developments, eager not to miss out on
what appears
to be a highly promising avenue for investment.
In the meantime, Egypt is
pushing ahead with a series of large undertakings in the sector. The most
controversial of these is the US$70bn Toshka project, which is taking water
from the Nile in the south of
the country to turn nearby desert areas into
a heavily irrigated oasis. The wisdom of spending so much on
a project
dependent on potentially fragile water resources has been questioned.
A
series of initiatives to upgrade and enlarge water, wastewater and sanitation
across the Nile Delta and
in rural areas is less contentious. Their
success is vital to the government' s strategy for opening up new
areas
that can house the overspill from already congested urban areas. New Cairo, on
the fringes of the
capital is a case in point, and is the target of the
first PPP initiatives in the sector.
While the state and international
agencies are meeting much of the cost of these new projects, the
consumer
may end up footing the bill in the long term. This is a delicate area for the
government, given
that Egyptians are used to paying little for their
water. Any price increases will need to be handled
carefully if public
unrest is to be avoided in a country where the poor are already feeling the
pinch as a
result of the economic downturn.
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