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Structure of Petroleum Industry in Egypt

Egyptian General Petroleum Corporation (EGPC)
EGPC was established by the Egyptian government in 1962 and is considered the first
economic corporation established in the petroleum industry in Egypt. It is active in the
upstream, downstream and petrochemical sectors, has full responsibility for all sectors
of the Egyptian petroleum industry and holds the sole right to import and export crude
oil and other petroleum products. As a controller of the industry, any foreign
investments in Egypt are maintained through a joint venture with the EGPC and are
supervised by the government. Among the major activities of the EGPC are petroleum
agreements, exploration, production, transportation and refining.

Egyptian Natural Gas Holding Company (EGAS)
Recognizing the increasing importance of natural gas, the Egyptian government
created EGAS in August 2001. The purpose of existence of EGAS is to manage foreign
investment in exploration and the use of LNG (Liquefied Natural Gas) tankers,
production and infrastructure. In addition to handling all the actions of natural gas
industry in Egypt, EGAS has a mission of employing an active plan which encompasses
the following:
To prove additional gas reserves, EGAS plans to develop intensive exploration
programs, based on the application of the most advanced exploration techniques and
concepts.


To maximize NGL (Natural Gas Liquids) recovery and enhance the petrochemical
industry, EGAS plans to: (1) develop a complete framework for integration, and (2)
upgrade the natural gas recovery facilities and transmission infrastructure.
To expand gas export activities, EGAS plans to: (1) increasing gas export pipelines to
link with the European Gas Pipeline system, and (2) implementing additional LNG
(Liquefied Natural Gas) trains within the Ministry of Petroleum policy guidelines.
To achieve sustainable development, EGAS plans to continue enhancement of gas
utilization in the domestic market.

Egyptian Petrochemicals Holding Company (ECHEM)

ECHEM is a holding company assigned to manage and market Egypts emerging
petrochemical industry. It is a major corporation in Egypt established in 2002, with a
mission of developing a competitive petrochemicals industry based on the use
advanced technology. ECHEM promotesinvestment, facilitates the development of new
projects owns and is continuing to establish production plants. ECHEM has a 20-years
plan to develop the petrochemical industry based on natural gas reserves of Egypt,
which form the backbone of the petrochemical industry.

Ganoub El Wadi Petroleum Holding Company (GANOPE) GANOPE, previously known
as the South Valley Development Company (SVDC), was established in January 2003 to
promote development activities specifically in Upper Egypt (Sohag, Aswan, Assyout,
Qena, AL Wadi El-Gedied), which represent over half of Egypt's total area. GANOPE is
the chief corporation assigned by the Egyptian government for handling and assessing
all petroleum activities in the south area of Egypt.

Foreign Companies and Egyptian Private Sector Companies

In addition to the holding companies (EGPC, EGAS, ECHEM and GANOPE), there are
foreign companies and Egyptian private sector companies operating the Egyptian
petroleum sector. These companies are granted concession areas for exploration
purposes in accordance with the periodic bidding rounds administered by the relevant
holding company. There are over 50 international companies that operate in the
exploration, excavation and production of oil and gas in Egypt.





Business Activities of Dana Petroleum
Dana Petroleum operate across the first four phases, from exploration through to
production
Phase 1: Exploration
We find the oil and gas that helps meet the energy needs of the complex modern world we
live in.
Danas exploration experts harness their years of accumulated skills and experience with
the most advanced technology to find hydrocarbons beneath the surface of the earth.
The people who do this work are industry-leading geoscientists. It is their job to help make
the earth yield up its precious reserves of oil and gas.
They use a variety of tools including topographical maps, 3D images and seismic surveys to
examine the viability of prospects. After they have undertaken rigorous technical work
they will have a good idea of the risks and whether a prospect is worth further evaluation.
An exploration well is then drilled to discover whether all their painstaking efforts have
paid off and if oil and gas is present.
39 exploration wells in 2012
drilled four exploration wells in the UK in 2012
drilled four exploration wells in the Netherlands in 2012
drilled 10 exploration wells in Egypt in 2012
drilled four exploration wells in Norway in 2012

Phase 2: Appraisal
When oil and gas is found it is only the first part of a very long journey to bring this energy
into peoples homes, to power industry or fill the petrol tank. We then move on to the
appraisal phase.
At this stage once a discovery is made, we will drill further wells. This is when we find out
how big the discovery may be and how easy or difficult it will be to extract.
We will then have a good idea of the sort of quantities of hydrocarbons that are in the
ground. Although ultimate recovery of a well cannot be known with certainty until the well
ceases production, our experts will calculate an estimated ultimate recovery (EUR) based
on decline rate projections years into the future.
If we find enough oil and gas and it can be brought onshore safely and profitably we
take the next step forward. We may choose to sell our interest in a discovery or proceed to
the development phase. We often work with partners to share costs and pool expertise.




Phase 3: Development
Once we have a commercial discovery we need to develop the best solution to get the oil
and gas out of the ground safely and efficiently.
To get to this stage we need a lot of skill taking it forward requires significant investment
as well.
The earth does not yield up hydrocarbons easily. Oil fields are often located in challenging
offshore environments. Even when onshore they can present all kinds of challenges some
technical and logistical and some geopolitical.
Our experts consider a whole range of factors during the development phase. They will
decide whether gas or water has to be injected into the wells to maintain pressure to help
bring hydrocarbons to the surface.
They will decide on the best solution for bringing the oil and gas onshore. That may mean
using conventional platforms or Floating, Production, Storage and Offloading vessels
(FPSOs). It may mean using a subsea tieback to an existing platform. They will also
consider how to use existing subsea infrastructure or whether new infrastructure has to be
developed.
as 77% equity holder of the Western Isles development project, Dana will operate a new
build Floating Production Storage and Offloading vessel (FPSO). First production is
scheduled for Q4 2015.
Phase 4: Production
Production is our life blood as an oil and gas company. By selling it we earn the cash we
need to reinvest in the business.
At this stage we can now bring oil and gas onshore from platforms or FPSOs our
production assets. They have to be maintained and monitored 24/7 to ensure they can
operate safely and efficiently. Field lives may run into decades and production assets have
to be looked after throughout their lifecycle and safely decommissioned at the end of their
production life.
we have more than 48 producing fields in our portfolio with an average daily
production of 60,000 barrels of oil and gas per day
production in 2011 increased by 30% from 40,000 barrels of oil per day in 2010 to
56,000 boepd, and remained consistently high in 2012
key contributions are from the Greater Kittiwake Area, Greater Guillemot Area,
Cavendish, Babbage, Hudson and Ettrick in the UK; East Zeit in Egypt; and from the
De Ruyter and Hanze oil fields in the Dutch sector
drilling 24 production wells in Egypt in 2013
the Medway project in the Netherlands (a 50/50 joint venture with EBN) achieved
first production in January 2012 with the innovative tri-lateral Van Ghent well. First
gas production from the Van Nes field commenced in April 2012























Policies and Norms of Egypt
Overview of Foreign Investment Climate
The Egyptian government has made increasing foreign investment a major economic goal.
Egypt has embarked on an extensive reform program aimed at bringing the country in line
with international investment standards and tripling the annual amount of foreign
investment it attracts over the next three years. The government hopes to position Egypt as
one of the most attractive investment destinations among emerging market economies.
Egypt is a signatory to a number of international treaties and trade agreements and has
codified its obligations into laws and regulations. Egypt is party to 111 bilateral investment
treaties and is a member of the World Trade Organization (WTO), the Common Market for
Eastern and Southern Africa (COMESA), and the Greater Arab Free Trade Area (GAFTA). In
most sectors, there is no legal difference between foreign and domestic investors.
Generally, foreign investment in Egypt is not subject to discrimination or special approvals,
and the investment environment is mostly transparent for foreign investors. There are,
however, special requirements for foreign investment in particular sectors, such as
upstream oil and gas development, where joint ventures are required. Foreign investors
can freely repatriate funds, and there are no restrictions on capital transfers out of Egypt.
Egypt offers many incentives meant to attract foreign direct investment into special
economic and trade zones. The General Authority for Investment (GAFI) implements
Egypts policies and procedures to facilitate doing business, including maintaining Egypts
one-stop-shop for investors. GAFI's one-stop-shop, which aims to process approvals for
new investments within 72 hours, brings together all the government ministries needed to
establish a new investment and provides after-care services for existing companies. The
Egyptian tax code caps income and corporate tax rates at 20% for both foreigners and
nationals. According to the World Banks Doing Business Index for 2010, Egypt (ranked 94
out of 183 countries) has made significant progress in easing the procedures for doing
business.
Foreign direct investment accounts for less than 25% of all investment in Egypt, and
significant impediments to investment exist. Labor rules prevent companies from
hiring more than 10% non-Egyptians, and foreigners are not allowed to operate sole
proprietorships or simple partnerships. The lack of protection of intellectual property
rights is a major hurdle to direct investment in Egypt, which remains on the U.S. Trade
Representatives Special 301 Watch List for IP violations.
Egypts trade regulations impose distinct barriers on foreigners. Foreigners may function
as commercial agents, but are prohibited from acting as importers for trading purposes. A
foreign company wishing to import for trading purpose must do so through an Egyptian
importer. In 2009, Egypt imposed temporary tariffs and export and import bans on
strategic goods, such as rice, sugar, cement, and steel, to combat high domestic prices. Such
actions impede transparency and undermine the predictability of Egypts trade regime for
investors.
Although Egypt is a signatory to international arbitration agreements, Egyptian courts do
not always recognize foreign judgments. Resolution of any dispute is very slow, with the
average time to adjudicate a case to completion averaging about seven years. The judicial
system is also subject, in some cases, to political influence.
Other obstacles to investment include excessive bureaucracy, a shortage of skilled labour,
limited access to credit, slow and cumbersome customs procedures, and non-tariff trade
barriers.

Business Sectors:
Banking
The Central Bank of Egypt has not issued a new commercial banking license since 1979.
The only way for a new commercial bank, whether foreign or domestic, to enter the market
(except as a representative office) is to purchase an existing bank. As part of its 2004 plan
to restructure the banking sector, the government has sold shares in several joint venture
banks to foreign banking entities. The first public bank to be fully privatized was the Bank
of Alexandria (now AlexBank), which was sold to Sanpaolo Intesa of Italy in 2006. In 2008,
the Central Bank invited bids for a 67% stake in Banque du Caire, but it cancelled
the auction when the highest bid came in US$250 million below its target price of US$1.6
billion. In 2009, the Central Bank announced that it had no plans to privatize the three
remaining state-owned banks (Banque Misr, Banque du Caire, National Bank of Egypt),
citing poor market conditions. These three banks control at least 40 percent of the banking
sector's assets.
Insurance
The government has stated that it will not issue licenses for new insurance companies. As
in the banking sector, foreign firms can only enter the Egyptian insurance market through
purchase of a stake in an existing insurance company. In 2006, the Ministry of Investment
(MOI) began restructuring the public insurance companies in preparation for privatization.
In September 2007, the companies were merged and placed under an insurance holding
company, and real estate assets were stripped out of the companies and transferred to a
newly established affiliate, Misr for Real Estate. A foreign consultant assisted the holding
company in preparing a prospectus, but there have been no significant events in this regard
since 2007.


Oil and Gas
The Petroleum Industry is one of the most dynamic industries in Egypt and petroleum
production is by far the largest single industrial activity, representing eight to ten percent
of Egypts GDP. The Egyptian Government encourages international oil companies (IOC) to
participate in the oil and gas sector, and currently more than fifty IOC are operating in
Egypt. The petroleum industry in Egypt is managed by the Ministry of Petroleum, under
which four companies function as government agencies. One of these is the Egyptian
General Petroleum Corporation (EGPC), which concludes concession agreements in
cooperation with IOC in the form of production sharing agreement (PSA). Egypt grants
concessions in a specific area through the promulgation of a special law by the Egyptian
Parliament, which allows the Minister of Petroleum to conclude an agreement between the
Egyptian Government on one side and the Egyptian General Petroleum Corporation (EGPC)
acting as the concession holder and the foreign oil investor (IOC) acting as a Contractor on
the other side. This legislative act gives new agreements supremacy in application over any
contrary legislation or regulation. After concluding the agreement, any contractual changes
are remedied through amicable adaptation of its provisions or arbitration. These
safeguards were specifically devised to forge trust with foreign investors and improve
investment in the petroleum sector. In July 2010, GOE concluded a novel agreement with
BP for exploration in the North Alexandria and West Mediterranean deepwater
concessions. BPs agreement is unique in that it resembles a service contract, rather than
the traditional production sharing agreement; nevertheless, it is unclear whether this new
breed of agreement will become the new norm. Furthermore, electricity shortages during
August and September 2010 revealed that Egypts energy sector is not immune to political
risk, as domestic pressure mounted to reduce gas supplied aboard under exports
agreements, specifically gas sales to Israel.



Telecommunications
Telecommunications Law 10 of 2003 stipulated that Telecom Egypt (TE) would relinquish
its monopoly status as Egypt's sole domestic fixed-line operator and sole international
operator by January 2006 and provided for greater flexibility in selling shares of TE
through public offerings. As of January 2011, however, the MCIT had still not issued a
license for a second fixed-line operator and blamed the delay on the world economic crisis.
The MCIT refuses to set a date or conditions by which they plan to issue a second fixed-line
license.
Egypt has issued three mobile phone operator licenses, with the most recent acquired by
Etisalat in July 2006 at a cost of US$2.9 billion. Etisalat Egypt, MobiNil, and Vodafone Egypt
compete heavily in the mobile telecommunications market, where there are more than 65
million mobile lines.
Key Laws Governing Foreign Investment:
Investment Incentives Law 8 of 1997 was designed to encourage domestic and foreign
investment in targeted economic sectors and to promote decentralization of industry from
the crowded Nile Valley area. The law allows 100 percent foreign ownership of investment
projects and guarantees the right to remit income earned in Egypt and to repatriate capital.
Other key provisions include: guarantees against confiscation, sequestration, and
nationalization; the right to own land; the right to maintain foreign-currency bank
accounts; freedom from administrative attachment; the right to repatriate capital and
profits; and equal treatment regardless of nationality.
Law 94 of 2005 amended the Investment Incentives Law and made companies
incorporated under the Investment Incentives Law subject to relatively simpler
incorporation. It also granted companies established under the Companies Law or the
Commercial Law certain incentives under the Investment Incentives Law, including
protection from nationalization, imposition of obligatory pricing and cancellation or
suspension of licenses to use immovable property. It also granted companies the right to
own real estate required for their activities and the right to import raw materials,
machinery, spare parts and transportation methods without being required to register at
the Importers Register.
Companies Law 159 of 1981 applies to domestic and foreign investment in sectors not
covered by the Investment Incentives Law, whether shareholder, joint stock, or limited
liability companies, representative offices, or branch offices. The law permits automatic
company registration upon presentation of an application to GAFI, with some exceptions. It
also removes a previous legal requirement that at least 49 percent of shareholders be
Egyptian; allows 100 percent foreign representation on the board of directors; and
strengthens accounting standards. Founders of joint stock and limited liability companies
must submit a bank certificate to GAFI showing that 10 percent of the company's issued
capital has been paid in.
Public Enterprise Law 203 of 1991 permits sales of state enterprises to foreign
entities. Egypt began a privatization program under the Public Enterprise Law for the sale
of several hundred wholly or partially state-owned enterprises and all public shares of at
least 660 joint venture companies (joint venture defined as mixed state and private
ownership, whether foreign or domestic). Since 2008, however, the GOE has not
undertaken any new privatizations, and senior officials have said that the government will
retain majority stakes in the 150 public companies that remain under the MOI's authority.
Instead, the GOE is reportedly considering selling minority stakes in some of the companies
and restructuring others. Bidding criteria for privatizations are generally clear and
transparent.


Tenders Law 89 of 1998 requires the government to consider both price and best value in
awarding contracts and to issue an explanation for refusal of a bid. However, the law
contains preferences for Egyptian domestic contractors, who are accorded priority if their
bids do not exceed the lowest foreign bid by more than 15 percent.

Capital Markets Law 95 of 1992 and its amendments and regulations govern Egypts capital
markets. Foreign investors can buy shares on the Egyptian Stock Exchange on the same
basis as local investors. Brokerage firms have capital requirements of LE 5 million
(US$862,000), and same-day trading on the Egyptian stock market is allowed. As of January
2011, 47 brokerage firms have licenses for same-day or intra-day trading.

Law 123 of 2008 amended the Capital Markets Law to allow local and foreign institutions
to issue bonds at a par value of LE 0.10 (US$0.02).




Import Export Policy of India


Import Restrictions
Control over the import of goods into India is exercised by the Import Trade Control
Organization, which functions under the ministry of Commerce. This organization is
supervised by the Director General of Foreign Trade stationed at New Delhi, who is assisted
by Additional and Joint Directors General and by other licensing authorities at various
centres. Current import policy, valid from April 1992 to March 1997, is embodied in the
Export and Import Policy book out by the Director General of Foreign Trade.
Export License
An Export License is a one types of document which is issued by Appropriate Licensing
agency after the when an exporter is allowed for the transport of his product in the foreign
market. After a careful review of the facts nearby the given export transaction license is
issued.
Main Export License is depends on destination port as well as on nature of goods to be
transported.
EXIM Policy 2009 to 2014 Highlights
Market Access and Export Market Diversification: Incentive schemes have been expand
to cover new markets and new product categories the incentives available have increased
from 2.5% to 3% for these new markets.
New Product Incentive Scheme: The incentives increased from 1.25% to 2%.
Technology Upgrades: For companies in certain sectors such as engineering and electronic
products who want to upgrade their technology, zero duty will be assessed.
Gems & Jewellery Sector: Gold Jewellery exports will be permitted to receive Duty
Drawbacks. This is where the duty collected on the export will refunded.
Value added Manufacturing: To increase it a 15% minimum value addition on imported
inputs has now been prescribed.
Procedure Simplification: Increase from 15 to 50, the number of sample pieces allowed to
be imported by exporters at duty free rates.






Potential for import-export in India & Gujarat market

Egypt and India are looking forward to an exponential increase in bilateral trade
volume, from the current $3 billion to $10 billion. For the uninitiated, India and Egypt
share a 2500-year old diplomatic relationship.
In the light of this development, President Hosni Mubarak, flew down to India last year,
to further economic relations. This year, Indian Prime Minister Mr Manmohan Singh met
the Egyptian President at Sharm El-Sheikh during the summit for Non-Aligned
Movement.
Looking at the recent past, trade relationship between both the nations have been
blooming and blossoming. In 2004-05, trade between the two countries totaled $684.7
million. In 2006-07, it grew to around $1.96 billion. A year later it grew more than 50 %
to $3.38 billion.
Both the countries India and Egypt have been surprisingly enjoying robust growth,
despite developed nations wilting under the pressure of global economic slowdown.
India is seemingly interested in tapping Egypts expertise in number of areas; however,
the countrys principal focus is on infrastructure development and desert agricultural
methods.
Egypt exports to India primarily include oil and gas. Both countries however seem
inclined towards renewable energy sources, which can lead to further business
activities.
India at the present pace produce 8% of its energy from renewable sources and
hopefully, in the future its aspiring to achieve 20%. Egypt too shares the same vision as
India. Going forward, the two countries might work together in the energy domain.
India and Egypt have also come up with number of programs to expand cultural
relations. Alexandria University has associated with seven universities in India in an
Endeavour to give students international exposure.
Also the Maulana Azad Center for Indian Culture, incorporated 30 years ago, has played
a significant role in continual cultural exchange.





Business opportunities in future in India and Gujarat
Future prospects for oil and gas look bright and promising. Our relations are based on
strong foundations of history and expanding common interests. There is a mutual
determination to further enhance these relations and to push ahead the standing
cooperation between these two countries. Our cooperation in investments and joint
ventures has witnessed a remarkable increase during the last few years. The exchange of
visits between our officials & business communities is accelerating, and new cooperation
opportunities are made available.
The world has changed since Nasser and Nehru. However, India and Egypt still face the
same challenges of globalization and shape their policies & priorities accordingly. Both
countries have introduced reform policies to link up with global economy. Yet, both
countries face the challenges posed by the current world economy crisis. Such challenges,
and others relating to regional and global security issues, do provide a common platform
for strong political ties of consultation and coordination between our two countries.
Many big Indian enterprises such as TATA, ESSAR and RELIANCE have already chosen
areas of investment opportunities. GUJARAT STATE"PETROLIUM CO. has recently obtained
a concession to dig for oil & gas. Contacts are currently underway to establish an industrial
zone For India in Egypt. There are ongoing consultations to conclude a comprehensive
agreement on enhancing trade and investment cooperation with Egyptian oil and gas
industry.
Gujarat State Petroleum Corporation (GSPC) appears to have been moving fast in exploring
opportunities abroad. The State Government run company may launch its first overseas
exploratory drilling campaign at North Happy offshore block, on the Mediterranean Sea
near Port Said in Egypt. GSPC has already contracted Noble Paul Romano, a semi-
submersible rig, to carry out the drilling. According to the concession agreement with the
Arab Republic of Egypt, gas from the field will be used primarily to meet the rising local
demand.
Gandhinagar headquartered company is also aiming at launching a six-well onshore
drilling campaign at South Diyur blocks in Egypt in April 2012. The company is already in
the advanced stage of acquiring the seismic data from the 38,000 sq.km block, located next
to a recent onshore oil discovery by Shell. The tender for appointing drilling contractor for
South Diyur is already floated. The contract is expected to be awarded end of next month.
The total cost of the exploration is pegged at $60-70 million (Rs 300-350 crore)
In addition, Gujarat State Petroleum Corporation is in the process of launching 3-D seismic
data acquisition programme in two more off-shore blocks on Egypt in Southern Egypt.
GSPC holds 60 per cent operating interest in both the blocks while Gujarat-based Adani
Group holds the residual participatory interest. Drilling operation is expected to begin in
both the blocks in 2013. The Egyptian Government is also expected to sign concession
agreements for two more offshore blocks with a GSPC-led consortium in next couple of
months.

























Trade barriers of import export in Egypt
SERVICES BARRIERS
General Agreement on Trade in Services (GATS) Commitments
Egypt has restrictions for most services sectors in which it has made General Agreement on
Trade in Services (GATS) commitments. These restrictions place a 49 percent limit on
foreign equity in construction and transport services. In the computer services sector,
larger contributions of foreign equity may be permitted, such as when the Ministry of
Communication and Information Technology determines that such services are an integral
part of a larger business model and will benefit the country.
INSURANCE
Foreign firms may own up to 100 percent of Egyptian private insurance firms. Investors
acquiring more than a 10 percent stake in an insurance company require approval from the
Egyptian Insurance Supervisory Authority (EISA). A 2008 amendment to the insurance law
made EISA more autonomous and strengthened its role from administrative regulator to a
risk-based and market-sensitive regulator.
BANKING
No foreign bank seeking to establish a new bank in Egypt has been able to obtain a license
in the past 20 years, and in November 2009, the Central Bank Governor reaffirmed that no
new banks would be given licenses.
TELECOMMUNICATIONS
Despite the passage of a February 2003 law to allow for new telecommunications
companies in accords with Egypt's WTO commitments, Telecom Egypt continues to hold a
de facto monopoly since additional fixed-line licenses have not been issued by the National
Telecommunications Regulatory Authority (NTRA). The NTRA postponed a plan to issue a
second license in mid-2008, citing a lack of interest in the international markets for fixed-
line service.
TRANSPORTATION
The government is liberalizing maritime and air transportation services. The government's
monopoly on maritime transport ended with the passage of Law 1 of 1998, and the private
sector now conducts most maritime activities including loading, supplying, ship repair, and,
increasingly, container handling.
COURIER AND EXPRESS DELIVERY SERVICES
Private courier and express delivery service suppliers seeking to operate in Egypt must
receive special authorization from the Egyptian National Postal Organization (ENPO). In
addition, although express delivery services constitute a separate for-profit, premium
delivery market, private express operators are required to pay ENPO a "postal agency fee"
of 10 percent of annual revenue from shipments under 20 kilos.
OTHER SERVICES BARRIERS
Egypt maintains several other barriers to the provision of certain services by U.S. and
other foreign firms. Foreign motion pictures are subject to a screen quota, and distributors
may import only five prints of any foreign film. According to the Egyptian labour law,
foreigners cannot be employed as export and import customs clearance officers, or as
tourist guides.
INVESTMENT BARRIERS
Under the 1986 United States-Egypt Bilateral Investment Treaty (BIT), Egypt is committed
to maintaining an open investment regime. The BIT requires Egypt to accord national and
Most-Favored Nation (MFN) treatment (with certain exceptions) to U.S. investors, to allow
investors to make financial transfers freely and promptly, and to adhere to international
standards for expropriation and compensation. The BIT also provides for binding
international arbitration of certain disputes.
ELECTRONIC COMMERCE
Egypt's Electronic Signature Law 15 of 2004 established the Information Technology
Industry Development Agency (ITIDA) to act as the e-signature regulatory authority and to
further develop the information technology sector in Egypt. The Ministry of State for
Administrative Development (MSAD) is implementing an e-government initiative to
increase government efficiency, reduce services provision time, establish new service
delivery models, reduce government expenses, and encourage e-procurement. For
example, the e-tender portal, established in August 2007, allows all government tenders to
be published online.


Business Opportunities for future
Egypts positive momentum in recent years has been supported by far-reaching
Government-led reforms aimed at making Egypt more trade and business friendly, the
report states. This openness has seen Egypt rise up the rankings of, among others, the
World Bank Doing Business Survey and World Economic Forum Global Enabling Trade
Report. The same surveys highlight opportunities to drive improvement in Egypts
infrastructure, which is a key focus area of Connecting Egypt.
Freight infrastructure issues contribute to Egypts high logistics costs (the factors
associated with the storage, transportation and delivery of goods). According to Frost &
Sullivan estimates, Egypts logistics costs are around 20 percent of GDP, compared with
the average of 10-12 percent for developed economies.
Reduce logistics costs and optimize inbound, outbound and domestic trade flows. It could
help attract FDI and make Egypt an even more attractive manufacturing location, as well
as an international hub for shipping and logistics. In fact, it could feasibly lead to Egypt
capturing one or two additional percentage points of GDP growth, Frost & Sullivans Mr
VG Ramakrishnan said at the launch of Connecting Egypt in Cairo.
Ports
According to official estimates, Egypts total port capacity in 2025 is expected to be around
244 million tons, but forecast demand will be 274 million tons. Accelerating productivity and
expansion plans to meet these potential shortfalls is essential, according to the research.
Inland Transportation The report states that Egypts inland infrastructure is the weakest
link in the countrys freight transportation network and perhaps has the most to gain from
concerted investment and development.
Road
Roads account for more than 80 percent of total inland freight volumes. But road quality, a
lack of modern multi-lane highways, congestion and a fragmented trucking sector hinder the
rapid and reliable movement of freight. As Egypts roads will continue to be the primary
mode for freight carriage, more public and private investment and development should be
encouraged, according to the research.
Rail
The report suggests that Egypt needs to closely examine the potential advantages of freight
transportation by rail over road in terms of reliability, safety and profitability.

Inland waterways
The Nile River has the potential to offer low cost, efficient, environment-friendly freight
transportation, which could take pressure off the countrys 194 congested roads. Barges also
provide economies of scale as they are able to carry many times more cargo than even the
heaviest of trucks. Another economic advantage is that river infrastructure development is
far less costly than for either road or rail.
Logistics
Egypts economic growth has exposed areas requiring attention in its logistics environment,
the report states. For example, the lack of availability of high-quality storage and handling
facilities offering value-added services has in some cases required international
manufacturers to create their own facilities, rather than outsourcing logistics functions.