By Skinner, Anthony
The Middle East , No. 376
IN LINE WITH its grand scheme to attract record levels of foreign direct investment (FDI) and privatise state assets, the Egyptian government is pressing ahead with plans to bring private capital and vision into the oldest business of all--agriculture and irrigation.
Improving the efficient usage of water by Egypt's agricultural community remains something of a priority for Cairo, which, along with the World Bank, set its sight on increasing water productivity by 15% in 2005. Egypt's Ministry of Water Resources and Irrigation is now courting the private sector to manage irrigation activities in the western delta. The West Delta Conservation and Irrigation Rehabilitation Project is part of this broader plan to extend the water flows of the Nile, which currently meets 95% of the country's water requirements, to the outer fringes of the delta--areas that have so far failed to use surface water effectively for irrigation activities, drawing instead on limited groundwater reserves.
The size of the West Delta project is impressive, covering a concession area of just over 450,000 hectares in the southern region of the western delta. A private sector operator will manage the design, construction and operation of a closed pipeline irrigation network--an efficient surface water conveyance system--for an initial 30-year concession period. Local farmers have agreed to pay a fixed flat annual tariff along with a second fee levied on water usage to finance the operational costs. The design-build-operate contract will be awarded to the bidder that offers the required technical specifications together with the lowest combined tariff. A $175m loan from the World Bank, contributing up to 85% of total construction costs, should ensure the success of the undertaking.
Improving water usage is just one aspect of Egyptian water-related concerns, with 26.44% of Egypt's economically active population engaged in agricultural pursuits, according to the World Bank; the highest in the Middle East. Land reclamation--converting desert into fields or orchards--counts as a priority for the government. Currently, as little as 3.5% of Egyptian landmass qualifies as agricultural land, all of it concentrated around the Nile delta. Expanding agriculture beyond the densely populated Nile valley would also provide more jobs in a country where 600,000-700,000 new jobseekers enter the labour market annually.
Large-scale commercial reclamation projects are already underway well beyond the Nile delta. These should help the Ministry of Agriculture and Land Reclamation retrieve 1.34m hectares by 2017. The biggest commercial undertaking is Toshka, the largest water project in Egypt since the construction of the Aswan High Dam. Drawing water from Lake Nasser, the project will transform 227,000 hectares of desert into agricultural land. The Sharq Al Oweinat project, located in the south-western section of the Western Desert, and Sinai's Al Salam Canal project are both amongst the country's biggest ongoing reclamation initiatives.
However, the anticipated success of the many large-scale horticulture projects the completed water projects will enable, has been questioned by some. A certain amount of scepticism exists over whether the Toshka project will ultimately realise the profits its owners expect. Its intent to resettle 3m people by 2017 while creating 700,000 new jobs has triggered doubt. Critics point out that Egyptians generally prefer to remain close to their friends and extended families in the Nile delta, and say the incentives for working at Toshka will have to be generous to ply workers away from Egypt's urban hubs.
Shrugging off the doubters, the government in Cairo remains committed to the national reclamation schemes, encouraging the private sector to continue investing, while pushing ahead with its public-private partnerships in agriculture.
With over 78m citizens expanding at a rate of between 1. …