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Plans to double natural gas export by 2012

Egypt’s natural gas industry will push to double exports and expand its proven reserves over the next 5-6 years, petroleum minister Sameh Fahmy was quoted as saying. The planned boost will take place via the expansion of liquefied natural gas (LNG) plants at Idku and Damietta and an increase in the volume of gas sent abroad through the Arab Gas Pipeline (AGP), which has a capacity of 10 billion cubic meters (bcm).
Egypt currently exports 17 billion of its 55.2 bcm of annual production, bringing profits of $2.2 billion in 2005. That figure is expected to rise to $3.3 billion in 2006.

Egypt’s export hopes will depend largely on the success of efforts to expand its proven gas reserves – which currently stand at 1.87 trillion cubic meters – in the Western Desert, Sinai and deep waters off the Delta. Industry planners must find ways to induce leading gas exploration companies to assume the risks of exploration while coping with profits limited by artificially capped gas prices at home.

Poultry farmers cry foul

Hundreds of poultry farmers demonstrated in the Tahrir Square area on March 1, demanding that the government present a concrete plan for bailing out the 2.5 million people supported by Egypt’s £E 17 billion poultry industry, which has suffered severe losses since the government took emergency measures to contain the bird flu outbreak. They also demanded that government revoke the ban on the transport of birds across governorate borders and reopen baladi poultry vendors, which were shut down as a preventive health measure.

The government’s initial strategy for compensating poultry producers and vendors met with widespread disapproval. This proposal had included indefinite offers to buy healthy birds from farmers (at £E 3 instead of the customary £E 7), lift taxes and debts, and compensate them for the 1.5 million birds already slaughtered.

Rights groups have accused the government of failing to institute long-term plan to see the industry through the crisis and support farmers in duress. Officials at the Ministry of Agriculture, by contrast, claim they have recieved few complaints and that most farmers appear satisfied with the handling of the crisis.

Compensation for ferry disaster victims

Compensation for the families of the victims who perished when the ferry Al-Salam Boccaccio 98 caught fire and sank en route from Saudi Arabia to Safaga in Egypt on February 3 have yet to be paid out.
Following through on a promise by President Hosni Mubarak, a government spokesman announced on March 11 that the government’s Disaster Relief Fund would provide £E 36,000 to each family of the 1,027 who died in the disaster, and £E 18,000 to each of the 387 survivors. The compensation is separate from the money expected to be paid by the insurance company once investigations into the cause of the fire are complete, a process that could take at least four months.

Yet, almost two months since the disaster, not a penny has been paid out. Families of the victims spent much of the past month protesting in front of the People’s Assembly and in several squares in downtown Cairo, but to no avail.

A government investigation reported that “serious safety violations” had led to the disaster, whose material causes are being ascertained by experts analyzing the ferry’s “black box” data recorder in the UK. Preliminary results of that study will be issued to prosecutors in about two months, with a full report to follow in four months.

Meanwhile, the ferry’s owner, Mamdouh Ismail, a member of the Shura Council, has found himself under scrutiny after the Shura Council’s Committee for Constitutional and Legislative Affairs agreed to lift his parliamentary immunity pending an investigation into his accountability in the ferry disaster.

Egypt mulls bridge to Saudi Arabia

The idea of bridging the Red Sea between Egypt and Saudi Arabia has drawn renewed interest after the February 3 sinking of the ferry Al-Salaam Boccaccio 98, which caused the deaths of more than 1,000 people. It has been reported that a consortium of Arab companies under the leadership of Kuwait’s Al-Kharafi Group has offered to supply the $3 billion needed to fund the project.

First proposed in 1982, the 15-kilometer bridge would cross from the southern Sinai peninsula to Ras Hamid in Saudi Arabia. Alternatively, the bridge would span the Gulf of Aqaba further north. The principal obstacles to the project are political, say analysts. Officials are concerned that the bridge would be vulnerable to terrorist attacks or international conflicts because of its strategic location in the Straights of Tiran.

Danish firm lands engineering order despite protests

Danish engineering company FLSmidth signed a contract worth $72 million with Spanish-Egyptian joint venture Arabian Cement Company (ACC) on March 10, bucking the informal boycott of Danish businesses in the Arab world that followed the controversy over Prophet Muhammad cartoons. FLSmidth will provide engineering services and equipment for a cement factory to be built by ACC near Suez City.

The contract is a good sign for Danish firms hurt by the boycott, which began after Muslims were angered by caricatures depicting Prophet Muhammad that appeared in the private Danish newspaper Jyllands-Posten. Denmark’s government initially refused to apologize for the cartoons, insisting that it has no authority to censor private news media.

FLSmidth CEO Joergen Huno Rasmussen attributes the successful deal to longstanding contacts that the company has developed in the Middle East.

Australia expected to resume cattle exports

Australia could soon resume exporting live cattle to Egypt after Australian government investigations concluded that animals shown being mistreated on a February 26 television program were not from Australia. A boycott of the Egyptian market immediately followed the airing of the footage on an Australian television news program. Egypt bought $3 million worth of live cattle from Australia in FY 2004-05, according to the Australian Department of Foreign Affairs & Trade.

Officials from Australia’s Federal Agriculture Ministry claim that bulls shown having their tendons cut before slaughter in an Egyptian abattoir could not have come from Australia, which sent only steers to Egypt in the last year.

Locally produced Nissans hit the market

The inaugural run of Nissan Sunny sedans produced at a plant in Sixth of October City went on sale on February 28, following the Japanese automaker’s 2005 commitment to spend $60 million to develop Egypt as a base for building and marketing its products throughout North Africa. This first batch of automobiles consisted of Sunny 1,600cc EX Saloon manual and automatic-transmission and Super Saloon automatic-transmission sedans. Locally-made Nissan pickup trucks went on sale in 2005.
The factory in Sixth of October City has a production capacity of 17,000 units annually and employs 350 local workers.

Rights groups object to Internet censoring

The government of Egypt, along with those of several other Arab countries, has come under fire from activists who say that it is working to suppress freedom of expression on the Internet. A number of websites critical of the government have allegedly been blocked in recent months, including vocal blogs and sites pushing political reform, human rights causes and banned opposition groups, notably the Muslim Brotherhood. The reform-oriented site www.masreyat.org, for example, was allegedly rendered largely inaccessible on March 3 by TE Data, the Internet branch of state-owed Telecom Egypt.

The government denies the reports, arguing that to censor such websites would run counter to its recent policy of increasing media freedom. Activists call this rhetoric cosmetic, comparing the situation in Egypt to similar cases of online government surveillance and interference in Tunisia, Bahrain, Qatar, UAE and Saudi Arabia, which regularly block discussion of sensitive political issues while maintaining a facade of relative openness. According to human rights group HRinfo, over 200 sites are currently inaccessible in Saudi Arabia.

Spike in exports to the US

Last year saw a dramatic upswing in the volume of Egyptian exports to the US, said a report issued March 19 by the Egyptian Trade Representation Office in Washington. Egypt exported goods worth $2.1 billion to the US in 2005, up from just $1.3 billion in 2004 – an increase of 57 percent. Egypt’s import volume from the US, meanwhile, rose by 2.7 percent on the year.

According to the report, overall trade exchange between the two countries rose by 18.6 percent in 2005 to $5.3 billion, dropping Cairo’s US trade deficit by 39.3 percent.

Air crash report advises autopilot review

Investigators released a report on March 25 that said the crash of a Boeing 737 Flash Airlines plane on January 2, 2004 was likely caused by a fault in the spoilers on the plane’s wings, its aileron or the autopilot system. All 148 on board, mostly French tourists, were killed when the plane crashed into the Red Sea shortly after takeoff from Sharm Al Sheikh. Unable to pin down the exact cause of the accident, investigators recommended a review of the autopilot system.

French investigators, however, disputed the results, stating that pilot error was a factor. They argue that the crew failed to turn on the autopilot in the seconds following takeoff and didn’t react quickly enough after realizing that the plane was vearing sharply to the right.

Kenyans block sugar shipment

A group of Kenyan sugar importers has threatened to take legal action to prevent the Kenya Revenue Authority (KRA) from clearing 17,500 metric tons of sugar shipped from Egypt to the Kenyan port of Mombasa. Since Egypt is a net importer of sugar, Common Market for Eastern and Southern Africa (COMESA) rules of origin prohibit the country from exporting the commodity. The Kenya Bureau of Standards (KBS) has said it will test the sugar to ascertain its provenance before authorizing its release on the market.

Kenyan industrial groups are lobbying the government to impose protective tariffs on Egyptian products, which they say are dumped in Kenya at artificially depressed prices. They argue that energy and transportation subsidies allow Egyptian manufacturers to produce export products cheaply, giving Kenyan businesses a handicap on their own home turf.

Egyptians permitted to work in Jordan

Meeting during the Arab Labor Conference in Petra on February 26, Egyptian minister of manpower and immigration Aesha Abdel Hadi and Jordanian labor minister Basem Al Salem signed an agreement allowing Egyptian workers access to Jordan’s labor market. Under the terms of the agreement, workers will need Ministry of Labor cards showing employment details. The cards must also be approved by the Jordanian Ministry of Labor and the Egyptian embassy in Amman.

Sugar prices confound consumers

Sugar prices have jumped by over 40 percent since early February, with a kilogram retailing for around £E 3.25. Rumors of low sugar stockpiles circulated among some consumers, while others claimed that supplies were being reduced in preparation for the April holiday of Moulid Al-Nabi (Prophet’s birthday), during which large quantities of sweets are traditionally consumed. According to Minister of Foreign Trade and Industry Rachid Mohamed Rachid, however, Egypt’s sugar prices reflect fluctuations in the international market. Rachid explained that prices have increased in the wake of the recent EU decision to cancel subsidies for sugarcane farmers. In addition, Brazil, the world’s leading sugar producer, has begun using its sugar to produce electricity in response to soaring oil prices.

New traffic regulations

Cairo’s Traffic Authority announced in early March a set of changes to traffic regulations in the capital. Among these will be the purchase of additional radar units for monitoring motorists’ speed on highways. They also announced that drivers will now have the right to ask police officers to consult the radar scan before being fined for speeding. In addition, the Traffic Authority plans to mark all speed bumps in Cairo with white paint to increase visibility.

1 dead, 35 injured in cruise accident

An Egyptian was killed and 35 others – 27 German tourists and eight Egyptian staff – were injured when a cruise boat struck a bridge over the Nile on March 21 as it tried to pass underneath it. The cruise boat “King Tut 2” was nearing the southern city of Qena when it struck the bridge.

Consultant sought for Midor IPO

Egyptian oil minister Sameh Fahmy told reporters he was engaged in talks with potential advisers for the initial public offering (IPO) of the state-owned Middle East Oil Refinery (Midor). He said that two banks – Merrill Lynch & Company and Morgan Stanley – “have priority” for the advisory role, for which each has submitted a separate proposal. He hopes to reach an agreement by mid-April.

As much as 30 percent of Midor could go up for sale in July, according to an unnamed source cited by pan-Arab daily newspaper Asharq Al-Awsat in early March. The report also said that 51 percent of Midor – whose value Fahmy declined to disclose – will be sold to a strategic investor following the IPO. The government, which currently holds 98 percent of the refinery, will retain a 15-20 percent share, according to the report.

Gov’t signs MoU for e-schools

The government signed a memorandum of understanding with a consortium of private IT companies including Oracle, Microsoft, HP and Cisco to provide ICT hardware, software, digital content and teacher development to secondary schools. The educational development project falls under the auspices of the New Partnership for Africa’s Development (NEPAD), a 2001 charter initiative from the Organization of African Unity (OAU) to develop an integrated socioeconomic development framework for Africa.

Egypt has joined 15 other African countries in the NEPAD e-School Demonstration Project, which aims at setting up six high-tech, experimental “e-schools” in each of the participating countries and monitoring their progress over 12 months.

Cairo-Tel Aviv bus service could soon resume

Israeli and Egyptian ministers meeting in Berlin on March 8 moved closer to an agreement to renew the daily Tel Aviv-Cairo bus service after a 10-year discontinuation. Egyptian tourism minister Mohamed Zoheir Garana and his Israeli counterpart Avraham Hirschenson agreed in principle to renew the symbolic service, which started in 1981. Israeli public bus company Egged suspended the route in 1996 because it was unprofitable.

Russian car-maker opens assembly line

A high-capacity assembly plant for Russian Lada automobiles has opened in Cairo, under the auspices of Avtovaz OJSC partner Lada Egypt. The new plant will assemble the Lada 2107 and the Lada 110.

World’s oldest nautical artifacts discovered

A team of archaeologists working in the caves south of Safaga has discovered the remains of ancient ships and cargo that are believed to constitute the earliest known evidence of seagoing craft in human history. The wooden ships – some as old as 4,000 years – were likely constructed near the Nile and brought to the Red Sea for assembly by the Pharaohs’ soldiers. Their destination was the long-legendary land of Punt believed to be located in southern Arabia or the Horn of Africa, where they obtained spices and other precious goods for the Egyptian market. Prior to the discovery, the oldest analogous artifacts dated from 1300 BC.

India wary of OT’s entry into market

A number of Indian government ministries – including the ministries of defense and finance – are weighing the indirect entry of Egypt’s Orascom Telecom (OT) into Indian GSM mobile provider Hutchinson Essar. The office of India’s prime minister has already labeled OT’s acquisition of a 12.19-percent stake in Hutchinson Essar by way of a 19.3-percent stake in Hutchinson International, one element of the joint telecom venture, as a security threat. The supposed threat comes from the fact that OT also operates mobile services in neighboring Bangladesh and Pakistan, with which India has had strained relations in
the past.

Under the current terms, OT will have the conditional right to purchase an additional 3.7-percent direct interest in Hutchinson Telecom International over the next 12 months.

Cooperation with Vietnam inked

Several formal agreements between Egypt and Vietnam were signed during a five-day visit by a Vietnamese delegation to Egypt headed by trade minister Truong Dinh Tuyen during the first week of March. Among these were measures intended to prevent double taxation, discourage tax evasion and promote cooperation in tourism. Egyptian officials expressed interest in visiting Vietnam to observe the country’s successful experiences in aquaculture, agriculture, fighting avian flu and ordinance clearance.
Cultural cooperation and fair-exhibition programs between the two nations are scheduled for the coming five years.

The volume of trade between Egypt and Vietnam reached $40 million during 2005.

Journalists imprisoned in libel cases

Two recent libel cases in which journalists were hit with prison terms for libel have heightened tensions between the press and the Egyptian government over the prosecution of journalists. A criminal court found journalist Amira Malsh guilty on March 14 of libeling judge Atia Mohamed Awad in a story published in the independent weekly Al-Fagr in July, sentencing her to a year in prison. The case came less than a month after Abdel-Nasser Al-Zuheiry of independent daily Al-Masri Al-Youm received an identical sentence – plus a £E10,000 fine – in a retrial of a libel case against former minister of housing Mohamed Ibrahim Suleiman in a story that appeared in August 2004.

On March 3, however, Suleiman agreed to drop similar charges against 37 other publications, citing pleas from the Supreme Press Council as well as President Hosni Mubarak’s decision to do away with custodial sentences. In 2004, Mubarak pledged that the 1996 law that allows custodial sentences to be issued against journalists for libel would be repealed. Journalists have stressed the importance of enshrining their immunity to imprisonment in law.

Shell acquires stake in two concessions

Shell Egypt has acquired a 50-percent interest in two exploration concessions operated by Centurion Energy International, the West El Manzala and West El Qantara concessions, following an agreement between the two. Shell and Centurion will develop LNG from the Nile Delta sites if threshold quantities of gas are discovered. The agreement is subject to government approval.

WB lends $20 million to fight industrial pollution

The World Bank has approved a $20 million loan for Egypt to finance the Second Pollution Abatement Project (SPAP), which aims at demonstrating the applicability of market-based instruments in cleaning up industrial pollution hotspots such as Alexandria and Greater Cairo. The project will support the Egyptian government in improving its environmental management capabilities by providing technical assistance and expertise to the financial sector, beneficiary companies and the Egyptian Environmental Affairs Agency on regulatory and institutional aspects.

An additional $145 million of concessionary lending and grants will be supplied by the Japan Bank for International Cooperation (JBIC), the European Investment Bank, Agence Française de Développement and the Government of Finland.

A parallel project focusing on the conservation, protection and development of Alexandria’s Lake Mariout, a pollution hotspot, will be carried out by the Global Environment Facility (GEF) for $7.5 million. It will also help address regional concerns of pollution of the Mediterranean.

German firm to construct fertilizer complex

Misr Oil Processing Company (MOPCO) has awarded Germany’s Uhde Dortmund, a subsidiary of the ThyssenKrupp Group, a contract to design and construct a turnkey fertilizer complex. The complex will be located in the Damietta free trade zone and is due to start production mid-2008. Details of the agreement have not been made public.

13 charged in connection with bombings

Egypt’s High State Security Prosecutor charged 13 people on March 25 in connection with a series of blasts targeting Red Sea holiday resorts. Two others are already being tried for the July 2005 attacks in Sharm Al Sheikh, as well as bombings and in Taba and two other beach resorts in October 2004. Together, the attacks killed more than 100 people.

A third man had also been charged in absentia in connection with the bombings; however, he was killed in a gun battle with police in February 2005. According to prosecutor Hisham Badawi, the accused formed the terrorist organization that carried out the bombings in Taba and Nuweiba and assisted in the perpetrating of the attacks in Sharm Al Sheikh. The accused denied the charges.

The authorities have said that several individuals wanted in connection with the bombings have died in gun battles with the police in Sinai. They also argue that the bombers were Sinai Bedouin, some with Palestinian connections, but have ruled out that they were connected to anyone outside of Egypt.

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