Egypt in multi-billion-dollar airport spree to meet tourist demand

CAIRO, Feb 21 (AFP) -

Egypt is in the midst of a drive costing two billion dollars or more to revamp its old airports and build new ones as it anticipates millions more tourists in the next few years.

Many of the projects are prompting bids from foreign firms such as those that run the airports in Frankfurt, Zurich and Amsterdam, as well as engineering companies and consultants from Europe and Canada.

When the current program is completed in about four years, Egypt will have a network of 26 modern airports, including seven new ones, with capacity sharply increased at the old ones, Egyptian aviation officials say.

"It is a revolution in civil aviation in Egypt," Captain Magdy Maurice, who heads the airport sector at the Civil Aviation Authority (CAA), told AFP.

Some 5.5 million foreign tourists visited Egypt last year and 10 million were expected to visit in 2005, tourism ministry officials said.

Tourism, like the Suez Canal and oil exports, is a multi-billion-dollar a year mainstay of the economy, although it was hit badly in the 1990s when Islamic militants attacked tourists.

There has been no attack reported on foreigners since the Luxor massacre in November 1997.

Maurice said the airport expansion drive was aimed not only at boosting tourism but also at facilitating Egyptian exports, although foreign financial experts and investors saw it primarily as a tourist draw.

Stretched with financing the 300-million-dollar cost of upgrading 16 of its 19 existing airports, the government decided in 1997 to award Build-Operate-Transfer (BOT) concessions to private firms for 40 or 50 years.

"It costs a lot of money. The government is working now. At the same time, we're encouraging the private sector," Maurice said.

BOT projects that are underway or up for bid include a third terminal at Cairo International Airport and the expansion of the airport at Sharm el-Sheikh, a Red Sea swimming and diving magnet for Europeans, Israelis and others.

The terminal-three project is ready for bidding and valued at more than 300 million dollars, according to Netherlands Airport Consultants (NACO) BV, which has worked on the design.

Top bidders for Sharm el-Sheikh are Zurich-based Asea Brown Boveri, Montreal-based SNC Lavalin, France's Vinci as well as firms that run airports in Frankfurt, Zurich, and Amsterdam's Schiphol, ABB officials said.

Bids are due to be opened next week.

The total cost of the Sharm el-Sheikh project was estimated by one bidder at more than 200 million dollars.

Other BOT schemes include building new airports at Marsa Alam on the Red Sea, at El Alamein in the north, in the western desert oases at Farafra and Bahriya, and at Ras Sidr on the Gulf of Suez, Maurice said.

The total value of those projects is estimated at close to one billion dollars, according to published reports.

Some of the participating firms are Egypt's Osman Ahmed Osman contractors, Aeroports de Paris (which has the operational management contract at Marsa Alam), Britain's Malicorp and Nordic Engineering Resource, a Norwegian-Egyptian consortium, and the Kuwaiti Kharafi

There are additional projects in Hurghada in the Red Sea, and in the southern Nile cities of Sohag and Luxor, as well as a new airport planned for Sixth of October City outside Cairo.

CAA officials estimated the value of the combined projects at several billion dollars.

Last Updated: June 13th, 2011