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Egypt signs Chinese investment agreements worth $500 million

February 8, 2014 at 2:46 pm

The Egyptian government has signed four cooperation agreements with Chinese companies to develop and improve the economic area northwest of the Gulf of Suez. During a press conference, Minister of Investment, Osama Saleh, confirmed that the total amount of investments to be made by the companies amounts to $500 million and will be delivered in 3 stages. Furthermore, the companies are expected to promote other the projects such as factories in order to attract further investment and attract addition investment in the region of $1 billion creating 40,000 jobs.

He also announced that the next couple of days would witness a bid between major industrial development and infrastructure companies for 14 kilometres of land not included in the state budget. This will increase the total area allocated for the construction of an estimated 550 factories with an investment fund amounting to $6 billion dollars.

China’s ambassador to Cairo, Song Aiguo, said that Egypt was an important partner on the African continent as the volume of trade exchange between the two countries reaches $ 9.5 billion.

The Chairman of the General Authority of the Economic Zone northwest of the Gulf of Suez, Ibrahim Abdel-Salam, noted that the first contract for the development and improvement of a six square kilometre area under the usufruct system had been signed. The resulting investment will amount to around $2billion dollars and will create 40,000 jobs in addition to the signing of a protocol regarding the receipt of the Investors Service Centre in cooperation with China.

The Egyptian Prime Minister, Hisham Qandil, began a visit to the economic zone in the northwest Gulf of Suez by opening and inspecting some of the projects carried out with Chinese investments within the framework of supporting industrial projects and attracting investments and advanced technology in the industrial fields. He pointed out that the Egyptian-Chinese agreement for the development of the north-western area of the Gulf of Suez is the beginning of the region’s development and transforming of the Suez Canal from just a waterway to a huge national project. He also noted that the first phase of the agreement will provide about 700,000 thousand jobs and generate billions of dollars for the Egyptian cabinet. He also noted that the foundation stone for some small and medium enterprises for young people were laid as a form of social justice.

Qandil also announced an upcoming agreement on an IMF loan amounting to about $4.8 billion, and added “we are eager to implement the economic and social reform project and present it as a social dialogue in two phases.” He stressed that the project is a national project and that the government is working with full transparency and clarity.

The Prime Minister also said “the government is working on resolving the issue serious investors are having with collecting state funds, and hard work is the only way to achieve the goals of the revolution. We guarantee that Egypt is ready for investment,” and expects the level of self-dependence to reach 70 per cent this year. He mentioned that he read the resignation of the Advisory Board in the newspapers and does not know the reasons for the resignation, but is willing to hear their proposals and opinions.

Moreover, according to Reuters, the Egyptian government decided yesterday to build the tunnels, at an investment cost of EGP 5 billion ($722 million), under the Suez Canal as part of a plan to develop the Canal area. It also signed an agreement with Spain who will take charge of the technical support for the upcoming project. At the moment, the only tunnel under the Suez Canal is the “Ahmed Hamdi Tunnel” located north of Suez. The Egyptian government is also working on an ambitious project to develop the Suez Canal from a waterway into a large economic area to raise its resources to $100 billion a year.

The Head of the National Authority for Tunnels, Abdel Moneim Amin, told journalists that the three tunnels are considered “a step on the path towards developing the Suez Canal area.” Two of the three tunnels will be used as roads, while the third will be used as a railway.

Amin also stated that the first tunnel will be “near Kilo 19 Road south of Port Said, the second will be near the Suez Canal Bridge (north of Al-Ismailia), and the third in Suez.” He also said that a committee from the Armed Forces, the National Authority for Tunnels and the Ministry of Transportation was formed to supervise the project. The construction process for the first tunnel under the Suez Canal will be proposed to international companies in 9 months and will take 3 years to complete. The Egyptian government signed the agreement for the construction of the first Chinese investment area in Suez 2 days ago. It aims to attract investment amounting to over $2 billion in an attempt to take a step that will lead to the restoration of confidence in the country’s investment environment, and will support the economy that is suffering from the consequences of a severe crisis.