Ahmed Eleiba looks into the Suez Canal Development Axis, a mega project for Egyptian development so far steeped in murkiness
The Suez Canal Development Axis has been billed as the “development project of the century” that will spur Egypt forward by qualitative leaps and bounds. Yet, in spite of the hype, the project is not new. It dates back to at least a decade and some experts maintain that the idea actually germinated in the era of Anwar Al-Sadat and that Hasaballah Al-Kafrawi, who had served as minister of housing under both Sadat and Hosni Mubarak, had laid the preliminary cornerstones. But it was Essam Sharaf, minister of transportation under the Ahmed Nazif government and then the first prime minister after the revolution, who was the chief architect of the project. He had worked on it and nurtured it for years.
The project had been shelved for a while and it is highly unlikely that the Muslim Brotherhood, who is managing it now by virtue of positions in various executive agencies, had any knowledge of its details. Certainly, no mention of development of the Suez Canal zone had been mentioned in the electoral platforms of their first and second presidential candidates Khairat Al-Shater and Mohamed Morsi. In all events, the Muslim Brothers do not deny that they are not the originators of the project. Mohamed Gawda, a Brotherhood economic expert who is now familiar with the project, told Al-Ahram Weekly, “the project existed. It was not the brainstorm of the Muslim Brothers.” However, he adds: “But this does not refute the fact that the Muslim Brothers worked on it and helped develop it.”
The Suez Canal Development Axis is a comprehensive project. In interview with the Weekly, Ibrahim Nawwar, advisor to the minister of trade and industry, said that the project comprises the construction of major ports, industrial cities, major residential centres and mega-agricultural projects along the entire length of the canal. Around 450,000 acres of land will be put under cultivation and three tunnels will be built to link the two banks of the Suez Canal zone, which will become a “bridge for development” in the Sinai. It is envisioned that the project will take at least 20 years to implement, which therefore means that it will require the framework of a carefully devised national plan and realistic working agenda. According to available information, the project will create around a million jobs.
Nawwar also said that the US, France, Germany, Italy, Norway, Britain, India, Holland, Russia, China and Japan had voiced offers to invest in the project. Under the G8 Dauville Partnership agreement with Arab countries in transition, there is a promise of a package of international investment in Egypt that would help fund the Suez Canal Development Axis.
On Monday, Minister of Housing Tarek Wafik announced that the National Organisation for Tunnel Construction, in cooperation with a Spanish firm, has already begun drawing up plans for the three tunnels. The other projects that have been proposed for this phase will proceed in tandem with the construction of the tunnels in the framework of partnerships with other foreign firms. Next week, he said, the government will announce the four companies chosen out of 35 contenders that will be awarded the contracts to work on these projects.
In spite of the golden aura that surrounds the project now, it has not been free of murkier sides, which only began to surface with the resignation of Sharaf and his advisory team. As convinced as they were that the project held the key to the future of Egypt, they had objections to the bill of law that needed to be drafted to form the legal framework of the project. According to Mohamed Ibrahim, one of Sharaf’s assistants, the opinions of Sharaf’s team had not been taken seriously in the drafting of the bill, which had been submitted to the Council of Ministers and has yet to emerge. He said that the Ministry of Housing approached the project as though it were little more than an urban development scheme, in contrast to the Sharaf team that viewed it in the larger context of national security logistics. The Weekly was unable to reach Essam Sharaf for comment as, according to the director of his office, he is currently on a visit to Muscat, Oman.
Nawwar does not believe that placing the project under the supervision of the Ministry of Housing would present a problem. It is that executive agency that controls state land and represents the state with respect to that land. However, there were numerous other major problems arising from legal ambiguities. For example, what are the mechanisms governing the usufruct rights of the foreign partner? What are the conditions and periods of duration of these rights? What are the rights of the principal, or the state? What are the mechanisms governing how the project will be funded by the state: loans or credit? “There is a general economic policy crisis that has brought mega projects in Egypt to a halt and it is feared that this may cast a shadow over the Suez Canal project. We have a Japanese petrochemical project in Port Said that cost around $1.2 billion. That project has not gone into operation yet for silly reasons. And there are Indian companies and companies extracting gold in the same area,” said Nawwar.
Another matter that has sparked surprise among experts is that Walid Abdel-Ghaffar, a Muslim Brotherhood member, has been made the de facto official in charge of the Suez project. Following the resignation of Sharaf and his team, Abdel-Ghaffar was appointed as an adviser to the minister of transport and, according to him, he has since met regularly, every two weeks in the Ministry of Transport premises, with those in the executive agency responsible for project. Experts find it curious that Abdel-Ghaffar, an adviser to the minister of transport in some capacity, is now effectively the boss the team of ministers involved in the project, including the minister of transport he is presumably meant to serve in the capacity of adviser. Ironically, too, although the ministers are meeting in the capacity of an “organisation” responsible for the administration of the project, when Sharaf and his team tendered their resignations the Muslim Brothers had countered that there was no “organisation” to resign from since the law governing the Suez development project had yet to emerge from the Council of Ministers.
Nor are the problems likely to end with such oddities. The final law is expected to emerge soon from the Shura Council, according to a source close to the Muslim Brotherhood who told the Weekly that economic and political officials in the Brotherhood envision the creation of an organisation for the project that would be headed by an individual with the capacity of deputy prime minister and responsible directly to the president. At the same time, he said, governors in each of the relevant governorates would retain certain authorities, thereby realising a certain degree of decentralisation.
It may be premature to discuss the controversial details of this law when the very agency that is expected to pass it is controversial itself. Many question the authority of the current Shura Council to pass such laws, since it has assumed the powers of the dissolved People’s Assembly on a purely extraordinary basis and is theoretically entitled to deal only with bills of law of an urgent or exceptional nature until a new People’s Assembly — now to be named the House of Representatives — is elected. But Minister Wafik seemed untroubled by this. “The project is moving forward and its phases are being implemented regardless of the bill of law. The law won’t stand in our way.”
To compound anxieties surrounding the project are leaks regarding the role of the Muslim Brotherhood’s deputy supreme guide, Khairat Al-Shater, in the project. According to a Muslim Brotherhood source, Al-Shater is the “maestro” of the project and his recent visits to Qatar, Malaysia, Turkey and elsewhere were related to it, which meant — according to the source — that, “there are excesses involved in the project.” Some government sources connected with the project have voiced their concern over the Qatari role in it. One went so far as to say that there were bribes, some from Qatar, others from China, involved. He said that the fact that the Chinese firm Tida obtained six kilometres of the land allocated for the project last week underscored this policy. Although it was agreed that the company would receive land for its project, it did not obtain it until those in charge of the project felt that they were in need of some quick funding. As for Qatar, a Muslim Brotherhood source that requested anonymity said that it was a partner that would enter the tender process but that in the end the process was directed to a number of Gulf countries.
Although the source acknowledged that there were indeed “problems” with the question of the project as a whole, it was essential to overcome them as quickly as possible because time was of the essence. “The Suez Canal can not remain a mere maritime passage when it has the capacity to be a passage for development and economic prosperity, too,” he said, adding: “Israel is studying the prospect of a similar project and the UAE doesn’t want the project to begin with.”
What has been described as “excesses” may have a bearing on the sensitivity the Suez Canal zone has with respect to Egyptian national security. Salah Gawda, director of the Egyptian Centre for Economic Studies, told the Weekly: “Many disturbing questions continue to hover around the project, especially as pertains to the national security dimensions in the Suez Canal Zone and the Sinai 1 and Sinai 2 development projects that are subsidiary to the project. There are also a number of related social and demographic questions, foremost of which is the question of resettling four million people in that area. Is there a mechanism for this? I doubt it.”
Commenting on such reservations, Nawwar admitted that there were, indeed, many “hazy zones” at the legal, political and even economic and social levels. However, he said: “I believe that we can be confident with respect to the national security dimension, because the Armed Forces has pitted its full weight behind the project and General Intelligence has a representative [involved in it]. There is a perception that the Suez Canal belt, which extends to kilometres inland on both sides of the canal, cannot be brought into the scope of the project without the agreement of these sovereign agencies, and that their agreement would be required in order to expand the land area allocated to the project, especially in areas of logistical importance.”
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