Abstract
For millennia the presence of the River Nile has helped make Egypt one of the
Middle East’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 issues similar to
those 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 – an
Egyptian/Spanish venture has
now been announced as the lowest bidder
– 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 services across the Nile
Delta and in rural
areas are 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.
| 
View Cart
