Egypt must strip back bureaucracy to attract investment in its planned second Suez canal and bring in new laws making it easier for companies to get licences and land, a legal firm linked to the project said.
Egypt plans to build the new canal alongside the existing 145-year-old historic waterway in a multi-billion dollar project aimed at expanding trade along the fastest shipping route between Europe and Asia.
The Suez Canal already earns Egypt about $5 billion a year in revenues, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since a popular uprising toppled autocrat Hosni Mubarak in 2011.
The new channel is part of a larger project to expand Suez port and develop 76,000-sq-km around the canal into an international industrial and logistics hub.
“If we want this project to work, and attract investors, we need to escape bureaucracy and make the licensing process easier,” said Hani Sarie-Eldin, head of Sarie-Eldin & Partners, part of a consortium advising the government on the project.
He said the government should issue new laws giving the new canal a special status, removing obstacles to investment that have undermined previous ventures in the biggest Arab nation.
His firm was already drawing up drafts of the legislation that could be used, he told Aswat Masriya, a news website sponsored by the Thomson Reuters Foundation.
Officials have said the new development would boost annual revenues from the Suez Canal, which is operated by the state-owned Suez Canal Authority, to $13.5 billion by 2023.
Egypt’s central bank governor told Reuters on Monday it had taken just eight days to raise the $8.5 billion needed to fund the project.
The Suez Canal is the shortest shipping route between Europe and Asia and is a strategic asset for Egypt, a key US ally which has a peace treaty with Israel.
Though a measure of political stability has been restored since former army chief Abdel Fattah El-Sisi was elected president in May, investment has yet to return to pre-uprising levels.
Sarie-Eldin said that further clarity on future tax and energy policies will boost investment in Egypt more broadly.
“Investors are all in a state of alert currently towards the situation in Egypt,” Sarie-Eldin said.
“(They) need to see a clear declaration about taxes, energy and the direction of the government’s economic policy during Egypt’s next phase,” he added.
Power cuts dogging Egypt have become the biggest obstacle to luring back foreign investment after three years of political upheaval, the country’s investment minister told Reuters on Tuesday.
Electricity shortages mean the country often has intermittent outages for hours a day, frustrating many Egyptians and raising questions over whether foreign firms can operate here effectively.
Sarie-Eldin was an adviser to the presidential campaign of former army chief Sisi in the run-up to the election before joining the Suez Canal consortium.
“There is no relationship between the winning consortium for the Suez Canal project and my former role on the advisory board for President Sisi,” Sarie-Eldin said.
“The selection process has been completely transparent, through the office of a French consultant nominated by the World Bank.”