We’re going to pay more for electricity come July

Downtown Cairo is angling for a new lease on life. We have, for nearly two decades now, been fascinated by the notion of redeveloping Downtown using a model not dissimilar to that used by Solidere in Beirut. It’s an idea to which we were first introduced by Alaa Saba, who went on with Karim Shafei, and subsequently Ammar AlKhudairy, Hazem Barakat and Samih Sawiris to put his money where his mouth was and create Al Ismaelia Real Estate as what we would call ‘proof of concept writ large.’ Our passion for what happens to this amazing, infuriating, historic city of ours was behind our series Saving Cairo from Itself last summer, wherein SODIC presented its vision for how Cairo as a whole might be given a new lease on life.

With all the talk of the New Administrative Capital, it has become common — including here at Enterprise — to assume the moving of state offices out of the downtown core would result in the gutting of the nation’s historic center. Enter the recently formed Cairo Heritage Development Committee, which (unwieldy name or not) has set out to prove us wrong.

We were recently briefed in on the CHDC and its mandate, and we’re feeling uncharacteristically optimistic. The committee draws its power from Presidential Decree number 604, passed at the end of 2016, a copy of which we have reviewed and that — critically — gives it the power to compel cooperation from other government entities in both coming up with a long-term plan for Downtown and in taking practical steps today to remediate problems. The committee’s ultimate line of reporting? Direct to the president.

The committee has power — Cairo Governor Atef Abdelhamid, the head of the National Urban Planning Organization, the CEO of the New Administrative Capital, the head of the General Organization for Urban Harmony are all members. And critically, it is led by Ibrahim Mehleb (the former prime minister and President Abdel Fattah El Sisi’s top advisor for national projects). Two private-sector figures are deeply involved: Mahmoud Abdallah is the only member of the committee appointed by name (as opposed to position). Abdallah is a global veteran of the insurance and private equity industries — one of the top leaders of American Re, he was later one of the architects of its KKR-backed management buyout and subsequent merger with Munich Re. Enterprise readers will remember him as the architect of the pre-2011 restructuring of Egyptian state-owned insurance corporations. Joining Mehleb, Abdelhamid and Abdallah is Hisham Ezz Al Arab, the CIB chairman, in his capacity as head of the Federation of Egyptian Banks. Ezz Al Arab heads the subcommittee that’s tasked with figuring out how to finance whatever vision for downtown the CHDC comes up with.

The CHDC issued its first press release earlier this week — have a look at it here (pdf) — outlining its vision and emphasis on both short-term remediation and long-term solutions. We think it’s off to a good start. We’ll be following its activities closely in the months ahead and invite our readers to do the same. The future of Downtown is critical to this megalopolis we all call home — CHDC’s work is too important to allow it to unfold in the dark.

Among the other stories on which we’re keeping an eye this fine winter morning:

• A cabinet shuffle is still in the cards, but Prime Minister Sherif Ismail is yet to provide guidance on which it might be announced.
• A delegation from the Confederation of Indian Industry is expected in Egypt between tomorrow through Friday, Ahram Gate reports. The group will include 17 members representing the trade, agriculture, infrastructure, chemicals, energy, food industries, and business services sectors.

Verbal divorce has now become the social cause celebre of the week and has crossed over to the airwaves. Expect to hear more on this in the short term.

The House of Representatives’ Religious Affairs Committee plans to draft legislation that would ban men from verbally divorcing their wives, MP Amr El Hamroush told Al Hayah Al Youm’s Lobna El Assal (watch, runtime 6:22). The MP said the House is considering giving couples a 24-hour grace period to document their divorce; the bill would impose a fine in the case of a violation. The announcement comes a day after Al Azhar openly rejected President Abdel Fattah El Sisi’s suggestion to ban the practice. El Hamroush said Al Azhar’s opinion should be taken into consideration, but defended the House’s right to take action against “phenomena that threaten society,” including high divorce rates.

The Industry Ministry’s 2020 Strategy will support the engineering, chemical, food and textile industries, Industrial Development Authority (IDA) head Ahmed Abdel Razik tells El Assal (watch, runtime: 2:09). Razik touched on the hot-button issue of land allocation, discussing both 2016 accomplishments and the IDA’s goal for 2020 (watch, runtime: 2:42).

Are the Russians finally satisfied with our airports? Kol Youm’s Amr Adib delved into a favorable report aired in Russia on the security measures being implemented at Sharm El Sheikh International Airport. House Tourism Committee chair Sahar Talaat Mostafa stressed the importance of the report, which she said “sent a positive message about our airports to Russia and the world” (watch, runtime: 7: 29). A Sharm-based investor commented on the Russian security delegation’s visit last week (watch, runtime: 2:29).

Adib also discussed security measures being implemented at Cairo International with Ahmed Hosny, a senior official at CAI who told Adib that the Russian delegation checked the passenger terminals and baggage areas. Hosny said that the new Terminal 2 includes five stages to run security checks on luggage. He added that they had transferred arrivals from Terminal 1 to the new terminal (watch, runtime: 2:45).

Haven’t gotten enough football in the last few weeks? Hona Al Assema’s Lamees Al Hadidi interviewed national team players Ahmed Fathy, Ahmed Hegazy, Mahmoud Kahraba and Abdullah El Saeed (watch, runtime: 2:29:46). 90 Minutes’ Moataz El Demerdash interviewed Mohamed Elneny’s father (watch, runtime: 51:55).

We’re all going to start paying more for electricity come July: The Electricity Ministry is repricing electricity following the increase in fuel prices as a result of the EGP flotation, ministry spokesman Ayman Hamza told Al Shorouk, without providing details on the new pricing formula. The move comes as the Ismail government is under pressure to show the IMF it is making progress on the reforms to which it has committed as conditions of obtaining a USD 12 bn extended fund facility. A delegation from the IMF is in town now as a prelude to the disbursement of the second tranche.

Last February, the ministry had announced an ambitious five-year plan to eliminate power subsidies by 2025, and the IMF staff report released last month on Egypt’s USD 12 bn bailout noted that the Ismail government is committed to completely lifting electricity subsidies over the next five years. The Electricity Ministry last hiked electricity prices in August 2016 for residential and commercial consumption as production costs increased and would have exacerbated the burden of subsidies (which rose to EGP 60 bn following the EGP float in November) if consumer prices were not raised in step.

Meanwhile, citizens who were removed from the smart card subsidy system are (expectedly) outraged and are claiming that their welfare access was unlawfully revoked, Al Shorouk reports. As we noted yesterday, the Supply Ministry purged 1.2 mn welfare cheats from the country’s smart card subsidy system in the first phase of a large clampdown on Kramers.

Shoukry to meet EU foreign ministers, but there’s no refugee deal for Egypt on the table: Foreign Minister Sameh Shoukry has been invited to attend next month’s meeting of European Union foreign ministers, but a long-rumored financial assistance package to curb the flow of refugees to Europe is not in the cards. That’s the word from yesterday’s meeting of the European Union Foreign Affairs Council. Speaking after the gathering, top EU diplomat Federica Mogherini was directly asked “On Egypt: is there a migration compact in the pipeline?” to which she replied “No, on this question no, clearly not,” adding that any cooperation on the issue would have to run through the usual channels. Austria and Germany have since last fall promoted the notion of a Turkey-style agreement with Egypt that would give the Ismail government incentives to stem the flow of illegal migrants to the EU. Mogherini noted that EU foreign ministers had “agreed to increase the EU’s engagement with Egypt, a key country in its region, and help it meet a number of challenges.” Among them: The economy and deepening security cooperation. Watchthe post-meeting press conference (runtime: 19:18), read its official statement or check out this partial readout of Mogherini’s remarks and the Q&A.

Natural gas reserves in the East Mediterranean can fuel Europe, David Wainer writes in an evergreen story for Bloomberg. Looking at gas from Egypt, Cyprus, and Israel, Wainer writes: “hundreds of miles of undersea pipelines will cost [bns of USD] and pose a technical challenge for their designers. And even that task is dwarfed by the political engineering required to build stable energy routes through a conflict-ridden region.” Amos Hochstein, the former US energy envoy to the region says: “This is the kind of opportunity where either everybody rises or everybody falls.” Eni’s CEO Claudio Descalzi shares the view and sees Egypt as the center of a hub including Israel, Cyprus and Libya that can provide “solutions for European energy security.” Former US diplomat Matthew Bryza sees potential to replicate in the region the success achieved with BP’s Baku-Ceyhan oil pipeline runs from Azerbaijan via Georgia to Turkey’s Mediterranean coast.

Elsewhere, Bloomberg’s Salma El Wardany reports that Egypt plans to import between 100 and 108 LNG shipments in 2017. According to sources close to the matter, the country might phase out imports in 2018 as BP’s North Alexandria concession and Eni’s Zohr field begin production this year ahead of exporting in 2019. As we noted earlier this week, 43 to 45 shipments of LNG will be imported between March and December this year from Oman, Russia’s Rosneft, and France’s Engie, with a tender in November for the remaining shipments.

The Alexandria Mineral Oils Company (AMOC) board has approved converting 10% of the company’s shares into GDRs, Al Mal reported. We had earlier reported that the company could be offering an additional 10-20% of its shares in 2017, having originally floated 20% of its shares in 2014.

Remittances from Egyptian expatriates rose 15.4% y-o-y in December 2016 to USD 1.6 bn from USD 1.4 bn last year, the CBE told Reuters. Remittances in 4Q2016 totalled USD 4.6 bn, an 11.8% increase from the same quarter last year.

Incentives under the Investment Act will last for three years, Youm7 quotes General Authority for Investment and Free Zones (GAFI) Mohamed Khodeir as saying. He added that these incentives have been made deliberately short to encourage speedy development of projects. The draft of the law which was shopped to the public had set a five-year timeline for the incentives. Ditto the Supreme Investment Council’s incentives, which also suggests that the new investment incentives program will last for five years. It is unclear whether these were changes to the law recommended by the Egyptian Council of State (which recently completed a review of the law) or the Investment Ministry. Khodeir was coy on the subject, stating that the changes made by the Council were not major without stating what these were.

As for private free zones, Khodeir also said that there is consensus against establishing new private free zones, many of which have turned into graft havens, and have thus been excluded from the legislation (this has the Finance Ministry’s fingerprints all over it).

In a bid to sell the faltering one-stop shop policy, Khodeir said that land is being tendered jointly by different government bodies without delays to the investor. He can only be speaking recently, as all of 2015 and 2016 show this not to have been true. In any case, he still does not address the conflict between the policy and other legislation granting other authorities the right to tender land on their own. But thanks anyway. On a related note, GAFI’s investment promotion company, which was sanctioned by the Supreme Investment Council, will be established this month, Al Borsa reported.

Egypt ranked 108 on Transparency International’s Corruption Perceptions Index for 2016, alongside Algeria, Cote D’Ivoire, Ethiopia, and Guyana. “More countries declined than improved in this year’s results, showing the urgent need for committed action to thwart corruption,” the report states. Countries are assessed on the basis of press freedom, judicial independence, transparency on public expenditure, and integrity of public officials and institutions. Denmark and New Zealand both ranked first, while Somalia was last and seen as most corrupt at 176. The UK and US were at 10 and 18, respectively.

Saudi Aramco has hired four banks to advise on its first bond sale ahead of its 2018 IPO, Bloomberg reported. NCB Capital, Alinma Investment Co., Riyad Capital, and HSBC Holding Plc’s local arm will advise on the sale of SAR-denominated sukuk, which could be followed by USD-denominated bonds, sources close to the matter said. Aramco is hoping to raise USD 10 bn from the bond sale.

*** Investor relations analyst wanted: Inktank Communications, the Cairo-based investor relations firm that works with both major EGX-listed companies and privately held groups, is looking for two investor relations analysts. The position with our parent company entails working on everything from investor presentations, earnings releases, board material and client transactions to investor-focused press releases and correspondence. Outstanding English-language writing skills are a must. While we have a hiring preference for Egyptian nationals, applications from foreign candidates based in Egypt are welcome. Learn more about the position at inktankcommunications.com/careers or apply now with a cover letter and CV to patrick@inktankcommunications.com.

It’s a big morning for Egypt in the international press. Football remains the dominant story by sheer volume of pieces, with one of the more significant piece in that vein being the BBC’s report that the Egyptian Football Association isn’t planning on kicking head coach Héctor Cúper to the curb for failing to bring home the African Cup. Instead, it’s looking ahead to the 2018 World Cup.

Also on the BCC, Orla Guerin reports from Cairo that the “Trump era heralds a warming of US-Egypt ties.” The lengthy piece notes that “Egypt’s hardline leader, and his supporters, are on the Trump train. Now President Sisi is looking forward to a reset in relations, and a visit to the White House – which the Obama administration denied him.”

Nobody in “Greater Sudan” (hold the hate mail, please, we’re joking) is terribly pleased with us today. The South Sudanese claim we’re bombing them. The Sudanese are edging us toward a trade war. And now geriatric Sudanese leader Omar Al-Bashir is lashing out at Cairo, lumping us with Iran as he “accused Egyptian intelligence of supporting Sudan’s opposition forces, and vowed to take a border dispute between the two neighbors to the United Nations Security Council if negotiations fail.” The Associated Press’ report — triggered by Al-Bashir’s demand that we give Halayeb to Sudan — is getting wide pickup around the world.

Relations between Cairo and Khartoum are getting plenty of ink in Breitbart, the right-wing news outlet close to the Trump administration. The site is also covering (dateline: Israel — begad) the apparent sentencing to death of a man accused of murdering a Christian alcohol seller last month.

Over in the Washington Post, foreign affairs columnist David Ignatius picks up on a Carnegie report we noted last week to argue in “A look at the Arab Spring, six years later” that we’re facing a region-wide crisis in governance, that our biggest problems are authoritarianism and corruption, et cetera, et cetera, ad nauseum. Uncharacteristically, the best part of the piece is from the comments, where the reader FarTraveler notes as a visitor to Cairo that “things are rarely as simple as columnists or commenters want to imagine.”

In the New York Times, author and Century Foundation fellow Thanassis Cambanis is given plenty of space for a review of Rachel Aspden’s “Generation Revolution,” a lengthy excerpt of which appeared in the Guardian last July when the book was first published in the UK. The bottom line is all you need to know in deciding whether to buy a copy: “So what did happen to Egypt’s revolution? Aspden, like most of its chroniclers, was rooting for it to succeed. Yet it failed, she says, not only because the police state adapted so efficaciously but also because the people who sparked the revolt ultimately remained faithful to too many reactionary ideas.”

Some tourism experts remain pessimistic about Egypt’s tourism, saying that the return of the Russians may not be enough to revive the ailing sector, Menna Farouk writes for Al Monitor. Expect no trenchant sector analysis.

Rumors that the Tourism Ministry rejected a request from British band Coldplay to perform in Egypt are “baseless,” a spokeswoman from the ministry said, adding that the ministry had received no such request, Al Arabiya reported.

The legal crackdown on FGM has pushed the practice further underground, while also medicalizing it, as parents who want their daughters to undergo the surgery are likely to believe a doctor is the “safe option,” CNN’s Sophie Morlin-Yron writes. Many doctors are charging parents heftily — to the point where some parents forego anaesthetics because they can’t afford it — and often carry out the procedure late at night to avoid being caught.

Arriving rather late to the party and with nothing in hand but a single source, the Middle East Eye says the latest price hikes on subsidized goods are adversely affecting welfare recipients.

It’s time for the stadiums to reopen their doors to the football fans, Ossama El Ghazaly Harb writes in Al Ahram. Football stadiums have been closed to the public since 2011 for safety concerns, but allowing the crowds back in, particularly now after the AFCON, would send a message to the world that Egypt is safe and stable, encouraging tourists and foreign investors to return.

Islamic customs with a modern twist are not a novelty, so why is the issue of banning verbal divorce such a big no-no for Al Azhar? May Azzam muses on the question in her latest column for AMAY, arguing that certain guidelines of Islamic shari’a have been adapted—in practice rather than essence—to cope with changing times and social conditions. Azzam says that while a culprit would still be punished by law for stealing, for example, it is no longer socially or morally acceptable to cut off their hand, which had been a widely-held practice in different times. The writer argues the same for the legislation on verbal divorce, saying it would not strip a man of his rights, but merely give people time to think and reconcile their differences, ultimately for the benefit of society.

Women’s issues in Egypt have been pushed to the sidelines since the start of the Arab Spring, as the country grappled with political and economic instability in its aftermath, the director of Rice University’s Women’s Rights in the Middle East Program, Marwa Shalaby, says in an interview with World Politics Review. The significant progress that women achieved in fields such as health and education fail to translate, for instance, into increased female participation in the labor market, and Egypt still has one of the lowest rates worldwide. What further aggravates these issues, the researcher elaborates, are “restrictive social norms” that discourage women from certain fields such as business, tech, engineering, economics, and particularly from political life, where they would be able to “push for women’s rights and influence policy priorities.” Women currently hold 15% of the seats in the House of Representatives, which is under the regional average of 19%. Harassment and violence against women also remain prevalent, as existing laws are not strictly enforced, Shalaby states.

Ancient Egypt’s underworld is a red tape nightmare: Looking at the Egyptian Book of the Dead — the guidebook to the soul — one really gets the impression that the underworld of the Ancient Egyptians was a bureaucratic nightmare of Mogamma El Tahrir proportions. The sheer number of tests and hurdles the soul might go through, not to mention the over 50 gods that must stamp a soul’s passport at every turn, makes it seem obvious why the ancients invested so much into their tombs and monuments. There’s even bribery involved. This quirky, but informative video by TED (watch, runtime: 4:31) gives you the cliffnotes to the soul’s journey. Don’t leave this realm without it.

Egypt is interested in participating in the China-Pakistan Economic Corridor (CPEC) agreement, Pakistan’s National Assembly speaker Sardar Ayaz Sadiq told Pakistan Observer following a meeting with Egyptian Ambassador to Pakistan Sherif Shaheen. Egypt’s participation in CPEC can connect the trade corridor — part of the China-led One Belt, One Road initiative — to Africa, Europe, and the Middle East, Sadiq added.

The US apparently considering enacting new measures such as easing restrictions which would facilitate trade with Egypt, particularly in food and agriculture, according to statements made by a delegation of the US Foreign Agriculture Service (FAS) which met with Supply Minister Mohamed Ali El Sheikh on Sunday. “We anticipate growth in trade in agriculture goods in the coming period, said Jocelyn Brown,” assistant Deputy Director at USDA-FAS, AMAY reported.  AAAS Science and Technology Policy Fellow at USDA Foreign Agricultural Service (FAS) Timothy Brown believes the coming years will see a potential boom for Egypt’s exports following the EGP float. In light of all we’ve been hearing about Trump’s trade policies and considering the hepatitis A strawberry scare last year, their words are welcome news.

The Trade and Industry Ministry expanded the role of the Egyptian Export Promotion Center, turning it into its top authority on export policy, Al Borsa reported. The center will take the lead on executing the ministry’s strategy for boosting exports, according to Minister Tarek Kabil.

International Cooperation Minister Sahar is holding meetings with UN officials to set a working framework for its operations in Egypt for the coming five years, according to an email statement.

The Assiut Oil Refining Company (ASORC) is building a new EGP 187 mn project to produce butane at an annual rate of 400k tonnes, Oil Minister Tarek El Molla told Al Shorouk. The project will double ASORC’s daily production from 60 tonnes to 120 tonnes, said Chairman Nagy Kassab, which will increase to 190 tonnes after a high-octane gasoline complex goes into operation.

EGPC intends to channel all the petroleum products produced from refining Iraqi crude domestically and will not export them, unnamed officials tell Al Mal. We had earlier reported that Egypt will send a delegation to Iraq to finalize an agreement to import 1-2 mn bbl of crude, and the Oil Ministry has already proposed freeing up capacity at MIDOR to refine imported Iraqi crude. Meanwhile, Kuwait is said to be increasing the amounts of crude it is storing in Egypt, unnamed sources told Al Mal. The increase in the amounts stored in Egypt is due to the global supply glut, the sources added.

The Egyptian Electricity holding Company (EEHC) signed an MoU with Ganoub El Wadi Petroleum Holding and the Advanced Environmental Recycling Technologies (AERT) to study a project to convert oil shale from Ganoub El Wadi’s concessions to fuel and electricity, Al Borsa reported.

The Ismail cabinet approved the establishment of a EGP 350 mn industrial wastewater treatment plant in the South Port Said industrial zone, according to a cabinet statement.

A consortium of seven public companies is pursuing a USD 700 mn loan to build a phosphoric acid and phosphorous fertilizers factory in the New Valley, unnamed government sources tell Al Mal. The factory will produce phosphoric acid and phosphorous fertilizers with an annual capacity of 500k tonnes, the source added. The companies participating include Al Ahly Capital and Phosphate Egypt with 20% each, and East Mediterranean Gas, Petrojet, Enppi, Abu Qir Fertilizers, the Saudi Egyptian Industrial Investment Company, and the Egyptian Mineral Resources Authority with 10% each, Abu Qir Fertilizers Chairman Saad Abou El Maaty said. The total estimated cost of the project is USD 1 bn, with the consortium self-financing USD 300 mn. NBE was hired to arrange the loan, but is still conducting a feasibility study, Al Ahly Capital CEO Khaled Badawi said.

The Arab Organization (AOI) for Industry-affiliated railways factory SEMAF is in talks with Korea’s Hyundai Rotem to build 1,314 freighter cars, which the AOI will export to Mozambique, Al Borsa reported. The estimated value of the agreement is USD 500 mn and about 60-80% of the needed inputs will be sourced locally, factory Chairman Abdul-Rahman Hussein said.

The Health Ministry is promising that it will pass the responsibility of clearing pharmacies of expired meds on to pharma companies, in another capitulation to the tantrums of the Pharmacists Syndicate. Pharma companies must now reimburse pharmacists for expired products without receipts, ministry spokesman Khaled Megahed confirmed to Al Shorouk. .

The government is apparently squeezing government hospital suppliers, and is using the Auctions and Tenders Act to do it, said the head of the medical equipment division of the Cairo Chambers of Commerce Ismail Abdo. He says the government has not yet increased the prices of medical supplies and equipment to accommodate the EGP float, as per a government decision taken last December. It is using the Tenders Act — which allows the government to withhold advance payments to companies — to force suppliers to sign guarantees it will meet contracts at the price it sets or face being blacklisted, he tells Youm7.

The Administrative Capital for Urban Development Company will build the government block using Egyptian contractors after failing to reach an agreement with the China State Construction Engineering Corporation (CSCEC), Chairman Ayman Ismail tells Al Masry Al Youm.

The Public Transport Authority will issue a tender for 286 buses in two months’ time, Al Borsa reported.

Investment firm CI Capital will be taking on the restructuring of the National Investment Bank (NIB), Amwal Al Ghad claims, citing unnamed sources “close to the matter.”

Real estate developer Misr Italia is looking to borrow EGP 712 mn to fund its Cairo Business Park project in the Fifth Settlement, Amwal Al Ghad reported, citing an unnamed source. The National Bank of Egypt and the Arab Investment Bank have agreed to contribute EGP 312 mn and EGP 100 mn, respectively, and negotiations for the remaining EGP 300 mn are ongoing with several other banks, the newspaper reports.

Al Hayat television network has established an advertising agency by the name Hayat Media Services (HMS) that becomes the exclusive advertising agent for the network, Al Mal reported. HMS will be chaired by Ihab Talaat, the company statement said.

MP Mohamed Anwar Al Sadat’s feud with fellow members of the House of Representatives continues as tells Al Mal that he will file a complaint with the Prosecutor General’s Office if the House Ethics Committee takes disciplinary action against him. Al Sadat has denied charges he leaked a draft of the NGO bill to foreign embassies and forged signatures on proposals he presented to the House. The outspoken MP has vowed to “continue exposing the truth … like I did with the cars that were purchased,” referring to controversy he stirred last week, when he pushed for an inquiry into a claim that the House has purchased three automobiles at a total cost of EGP 18 mn.

The Armed Forces killed 14 militants and arrested 10 in a raid in central Sinai, the Armed Forces spokesperson told Reuters. The five-day operation has destroyed three car bombs, 10 explosive devices, and seized communication devices, military clothing, and weapons, the spokesperson said.

Egypt has inaugurated the African Cinema Club at the Cairo Opera House’s Hanager Cinema as part of a bid to “deepen cultural and political ties” with African countries, Al-Monitor reports. Screenings are scheduled to take place on the first Saturday of every month.