Egypt awards ambitious Suez project to army-linked Gulf firm
CAIRO (Reuters) - Egypt's Suez Canal Authority announced on Tuesday that a Bahrain-registered firm is to develop a huge industrial and logistics hub around the canal, but gave no details of the project itself.
The Egyptian army is a local partner in Dar Al-Handasah Egypt through the Armed Forces Engineering Authority, army and government sources have told Reuters.
A plan to develop the canal was announced under former President Mohamed Mursi last year but opponents accused him of attempting to sell public land to foreigners and the project was shelved for many months. The army ousted Mursi in July last year following mass protests.
The head of the Suez Canal Authority, Lieutenant General Mohab Memish, announced the winning consortium alongside Prime Minister Ibrahim Mahlab at a news conference in the city of Ismailia, a city on the banks of the canal.
"The winning consortium to create the master plan for the Suez Canal area development project is the consortium of Dar Al-Handasah Shair and Partners, which is registered in Bahrain, in alliance with Dar al-Handasah Egypt," Memish said.
He gave no further details about how much the project is likely to cost or which industries the plan would focus on. The Suez Canal Authority was not immediately available for comment.
Earlier this month, President and former army chief Abdel Fattah al-Sisi announced a multi-billion dollar national project to expand the Suez Canal by building a new canal alongside it.
It was not immediately clear in what way the two projects might be linked.
Sisi has said he would not hesitate to award to the army major projects that would help revive Egypt's economy.
The military - whose budget is not made public - has accrued a business empire ranging from bottled water to tablet computers and is seen by many Egyptians as more efficient than the government.
The Suez Canal is the fastest shipping route between Europe and Asia and brings in around $5 billion (3.01 billion pounds) in revenues per year, a vital source of hard currency for Egypt which has struggled since a 2011 uprising deterred tourists and foreign investors.
In January, Egypt invited 14 consortia to bid for the development of 76,000 square kilometres (29,000 square miles) around the canal. Thirteen of the 14 consortia, which included Australia's WorleyParsons (WOR.AX), consulting firm McKinsey & Co and Japan's Oriental Consultants, submitted bids.
"WAIT AND SEE"
The government says it wants to attract both local and foreign investors for the Suez Canal area development project which it has hailed as a way of turning Egypt into a major trading hub through the expansion of shipping facilities.
But investors are likely to wait until more concrete plans have been announced before pouring in money.
"It is an important project... If it is well planned and well designed it is achievable," said Mohamed Abou Basha, an economist at Egyptian investment bank EFG-Hermes.
"The idea has been there for many years but never been implemented or seriously considered... We have to wait to see how they are going to design the zone, which industries are they planning to attract and what benefits they will give investors," Abou Basha said.
The Sinai peninsula, which lies the eastern side of the canal, has seen a rise in violence from Islamist militants in recent months, prompting the government to launch an ongoing military campaign in which hundreds have died on both sides.
Egypt's Gulf Arab allies support the Egyptian military and have given billions of dollars in aid to the country since the army ousted Mursi last year.
Dar Al-Handasah says on its website that its 6,900 employees offer services in planning, design, management and supervision and that it has finished building projects across the Middle East, Africa and India.
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