Wednesday, 15 February 2023

Cracks are starting to show in our countrywide canal upgrade initiative

Egypt’s massive canal upgrade project is facing some challenges: The government’s plan to upgrade and reinforce the lining of some 20k km of water canals — announced back in 2020 — has come under fire at the House of Representatives, where MPs summoned Irrigation Minister Hany Sweilam to discuss the state of the country’s water resources last month. MPs questioned Sweilam about the cost, feasibility, and status of the project, following complaints about delays and the quality of implementation.

REFRESHER- The initiative is expected to cost some EGP 68.2 bn and could save up to 5 bn cubic meters of water annually upon its completion by the end of FY 2023-2024, Planning Minister Hala El SAid previously said. The project is being rolled out in two phases, with the first EGP 14 bn phase covering upgrades for over 1k canals across 20 governorates. Some 60% of the phase’s financing is coming from local creditors, 25% is from foreign loans, and 15% is from international financing institution grants, according to State Information Services.

Where things stand so far: Some 6.6k km worth of canals have been upgraded out of a total of 12k km that are being targeted throughout the country. Currently, work on some 3.8k km of canal networks are underway and construction on an additional 1.6k km are expected to begin soon, the Irrigation Ministry said late last month. In Hayah Karima villages, almost 3k km (or 66.1%) of canals have been upgraded as of late January and upgrades to another 1.5k km stretch are now underway, according to an Irrigation Ministry statement last week.

But there have been issues cropping up: Some user-uploaded images circulating on social media have shown cracks and misalignments in some of these newly upgraded canals’ concrete banks. Some farmers have also voiced concerns about the lower than usual water levels running through the canals which has made the process of extracting water to irrigate their farmland even more challenging. These issues led the Irrigation Ministry to put together a special unit last month tasked with investigating construction work on canals and ensuring they meet the quality standards outlined in their agreements. Faulty canal work or upgrades that failed to meet those standards are now being redone at the implementing contractor’s expense, Irrigation Ministry spokesperson Mohamed Ghanem said last month.

Gov’t says contractors violated guidelines: The entire project was supposed to follow a precise set of guidelines determining the extent of reinforcement needed and exactly how to implement those changes, according to Ghanem. The priority outcome is for canals to serve their primary function, which is to deliver water to those who need it, Sweilam told the House. If canals require reinforcement, this can be done using concrete or alternative materials that are less costly and more environmentally friendly. “It is impossible to line all canals with concrete. It would be a waste of public money,” Sweilam told the House.

The situation on the ground: Concrete is in many cases being used to reinforce canals, in place of increasingly scarce and eroded soil, and to reshape the waterways to their original form, former Irrigation Minister Mohamed Nasr Allam told Enterprise. Most canals in Egypt have grown far wider than they were first dug, Allam explained. Many of the problems that have emerged with canals are linked to a decades-long reliance on mechanical purification techniques and weak technical supervision. In many instances, restoring canals to their initial size has become impossible because of a lack of soil and high costs.

Cost pressure following the float: All canal upgrades currently being implemented are based on the findings of a three-year study prepared by consulting firm Dar Al-Handasah, the Irrigation Ministry said in 2021. A separate ministry study published in 2010 estimated that there would be an annual reduction of some 25-35% of the Nile River flow between the Aswan High Dam and the Delta region. That same study also made the case that reinforcing our canal systems’ lining would “not be a waste of public money,” land and water professor Nader Nour El Din explained in a televised interview (watch, runtime: 18:14). However, the reality on the ground has recently changed with economic pressures that have made these projects more costly, Cairo University geology and water resources professor Abbas Sharaky told Enterprise. “If we have the resources to line all the canals in the country, we can do that, but right now there are only some canals that really need it and it would otherwise be extremely costly to line the entire country’s canal network,” Sharaky said.

The project has already yielded positive results, the ministry says: More equitable water distribution, faster water flow, improved water quality and more efficient distribution are among the many benefits the Irrigation Ministry says farmers have enjoyed since upgrades have been made. The ministry has also said the value of agricultural land located in close proximity to canals increased 30%, while there’s been a net reduction in irrigation pump use. Upon completion, farmers should see annual water savings of about 5-10% and those with land that was once beyond the reach of canals should expect to be able to irrigate fields that have been left barren for years, according to a 2021 ministry statement.

The project’s timeline has been amended more than once: Before the government announced that it would be undertaking this initiative only some 50 km worth of canals were being lined every year. But as demand for water has steadily increased in recent years, the government decided it would target lining some 2k km every year over the course of a decade. In 2020, the government ramped up the pace once more to instead target a two year time limit for the project’s completion.

Estimates vary on exactly how much water we lose under our current irrigation system: Most of Egypt’s water waste is the fault of leakages and evaporation, which are extremely difficult to accurately quantify, an Irrigation Ministry official previously told Enterprise. Still, there are some figures, including those provided by state statistics agency Campas, that set water losses in the Nile Delta to 9.5 bcm in FY 2018/2019 due to canal leakages (7 bcm) and evaporation (2.5 bcm). Irrigation canals, which span about 30k km, waste 8 bcm from water leakages alone, Sharaky previously told us.

Your top infrastructure stories for the week:

  • Faster imports / exports: The French container and shipping giant CMA-CGM announced the inauguration of its freight rail services connecting the ports of Alexandria and Ain Sokhna to the Sixth of October Dry Port.
  • GREGY is advancing: The consortium behind the 3-GW Greece-Egypt Interconnector (GREGY) is putting together the final technical and financial surveys ahead of an investment decision.
  • Metro Line 1 tender: Germany’s Siemens and French firms Alstom and Colas reportedly submitted separate offers in a government tender to develop Cairo’s oldest metro line.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.