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Egypt
>> Regional Overview >> Egypt Overview ACTIVITY DATA SHEET
PROGRAM: Egypt
TITLE AND NUMBER: Access to Sustainable Utility Service in Selected Areas Increased, 263-018
STATUS: Continuing
PLANNED FY 2001 OBLIGATION AND FUNDING SOURCE: $53,803,000 ESF
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: None.
INITIAL OBLIGATION: FY 1996 ESTIMATED COMPLETION DATE: FY 2004Summary: Egyptian citizens need reliable power, telecommunications (telecom), water, and wastewater services to improve their living conditions. These utility services are needed as well for increased trade and investment. To support Egypt's growing economy, utilities need to operate efficiently and recover costs. To secure needed financing, whether through private investment or revenue generation by the utilities themselves, an appropriate legal and regulatory framework is needed that provides competitive pricing of services, customer protection in situations of monopoly supply, and stability and transparency to attract private investment.
This objective includes funds previously obligated under "Accelerated Private Sector-Led, Export-Oriented Economic Growth" (263-001) and "Increased Access to Sustainable Water and Wastewater Services" (263-006).
In 2002, USAID will conclude the $700 million telecommunications program and the $1.8 billion electric power program. USAID will intensify its $2.5 billion water and wastewater program planned for closeout in 2005. Among the legacies of USAID's infrastructure program in Egypt is expanded coverage of basic services and support for institutional and regulatory measures needed to improve performance of utilities and increase access to sustainable financing.
Under USAID's 25-year urban infrastructure program, power sector programs have developed 2,500 megawatts of electricity and rehabilitated an additional 2,500 megawatts, representing over 35% of Egypt's generating capacity. Water and wastewater programs have reached 20 million people, and telecommunications programs have financed expansion and improvements in the quality of services reaching several million customers. At the conclusion of its infrastructure program, USAID will phase out direct financing of infrastructure construction, and will increase emphasis on supporting legal and regulatory reform in the infrastructure sector in order to create an enabling environment for private sector participation that improves services for customers.
Key Results: Expanded and better managed telecommunication, power, water, and wastewater services will improve Egypt's capacity to integrate into the global economy and protect the health of its citizens. Achieving the aims of the infrastructure program requires successfully improving service delivery, addressing the need for utility providers to operate as businesses, and promoting a legal and regulatory framework conducive to increased investments.
USAID programs have been effective in promoting reform in the power sector. The National Electric Power Company has been restructured into a holding company to facilitate divestiture of generation and distribution units. Tariffs have been raised, and an electricity regulatory agency was established by Presidential Decree in August 2000. Private sector participation has been encouraged through several "build-own-operate-transfer" contracts. The restructuring of the electric power sector is now led by the Government of Egypt (GOE) with USAID in a supporting role. USAID institutional assistance to the Egyptian Electricity Holding Company and the distribution companies focused on introducing business-oriented management and financial accounting practices. USAID's construction program in the power sector has shifted emphasis from building new plants to improving the efficiency of existing plants and building control centers that manage the national and regional electric power grids. Control centers are being completed to improve system efficiency in Cairo and Alexandria. The National Energy Control Center upgrade has been completed. Control systems are being upgraded at four power plants. Completion of the Alexandria Regional Control Center in FY 2000 has provided better electricity service for approximately one million residents. The Cairo Regional Control Center will be nearly complete by the end of FY 2001, which will improve the supply of electric power to approximately one million residents.
In the telecommunications sector, USAID technical assistance, now completed, helped to establish the Telecommunications Regulatory Agency and introduce enterprise-based management practices at Telecom Egypt. A master plan was completed in August 2000 that provides guidance to Telecom Egypt on increasing capacity and providing new services. This USAID capital assistance program has focused on the introduction of new efficient technology. Much of the digital switch exchanges and the associated outside plant were USAID-financed. Recently, Telecom Egypt requested USAID assistance to develop specifications for more sophisticated procurements to be self-financed by the organization. By the end of 2001, installation of digital switching technology will expand telephone services to an additional 1.5 million people.
During FY 1999, USAID technical assistance coupled with extensive policy dialogue directly supported the GOE's preparation of a comprehensive package of enabling legislation for reform of the water and wastewater sector. The legislation, consisting of a Presidential Decree that authorizes the creation of a regulatory agency and a law that repeals limitations on private investment, was approved by the cabinet in May 2000. This legislation is now under review by the State Council and the Ministry of Justice, and should be promulgated in 2001. Meanwhile, as a result of comprehensive ongoing USAID-financed institutional support, nine targeted utilities will continue to make consistent gains in operating efficiency and recovery of operation and maintenance costs through improved metering and billing systems, stricter fiscal controls, and improved accounting procedures. In FY 2000, construction was completed on schedule for the $380 million Canal Cities Project, and construction commenced in Alexandria with the award of a $92 million Alexandria design/build construction contract. Also in FY 2000, construction began on a wastewater treatment plant in Nuweiba, and major work progressed in Mansoura and Aswan. Construction on Luxor wastewater facilities is scheduled to begin this fiscal year. In addition, over half a million residents of Mansoura will receive new or upgraded water service by the end of FY 2001. Improvements in water and wastewater services in the other areas will commence during 2002-2004.
Performance and Prospects: The FY 2001 activities are illustrative.
The prospects for continued progress under this objective are good due to the GOE's increasing commitment to improving the efficiency, reliability, and access to utility services, as well as introducing private sector participation in the financing and management of these services. Although power and telecom activities are fully funded, USAID assistance will continue to focus on critical infrastructure needed to support increased private investment in the power and telecom sectors. Assistance is being provided to help the power regulatory board initiate its basic oversight functions. USAID is assisting Telecom Egypt to become a quality provider of customer-driven services and to position itself for additional privatization in the medium term.
USAID will help its partners establish the conditions for mobilizing private sector financing of infrastructure, while enhancing utility management and customer service and protecting USAID's capital investments to date. This is a logical graduation strategy for a program that has matured to the point where public entities are ready to change their roles from service deliverers to facilitators and regulators.
In FY 2001 ($53.8 million), USAID is pursuing a two-pronged approach in water and wastewater services. First, funding is being provided to expand and establish new water and wastewater treatment plants and related collection and distribution systems in the Fayoum, Beni Suef, and Minia governorates, with a combined population of 7.75 million. Funding also will enhance the capacity of water treatment and distribution systems in Alexandria, with a population of 3.5 million. Second, support is being provided to create an independent regulatory agency, enhance the GOE's capacity to manage private sector investment transactions, and institute measures to enable and encourage local utilities to operate along business lines. Institutional development efforts will continue to support greater cost recovery and operating efficiency, complementing capital assistance investments to enhance the delivery of services to customers.
Program Management and Support: USAID will obligate $3 million in anticipated recoveries of prior year funds in FY 2001.
Possible Adjustments to Plans: None.
Other Donor Programs: USAID is the largest donor in the water and wastewater sector in Egypt. Other donors include the European Union (EU), the United Kingdom, and Italy, all working in Cairo; Denmark, working in Aswan and Qena Governorates; and the Netherlands, working in Fayoum. In the power and telecommunications sectors, USAID's focus on policy and regulatory reforms to promote private sector participation also is supported by the EU and the World Bank.
Principal Contractors, Grantees, or Agencies: USAID works closely with the Ministry of Housing, Public Utilities and New Communities, Ministry of Communications and Information Technology, Ministry of Electricity and Energy, and a number of local utilities to implement the program. A large number of U.S. firms are under contract to implement the programs, including ABB SUSA; Morrison Knudsen; Morganti, Black & Veatch International; Camp Dresser & McKee; CH2M Hill; Harza Engineering; Metcalf & Eddy; PADCO; Hagler Bailly; Chemonics International; Advanced Engineering Associates; Deloitte Touche Tohmatsu; Duke Engineering Services; Pennsylvania Power and Light; Gilbert Commonwealth International; General Dynamics; Nortel Networks; Raytheon; Macro Corporation; Kuljian; and K&M Engineering.
FY 2002 Performance Table
Egypt: 263-018
Performance Measures:
Indicator FY97 (Actual) FY98 (Actual) FY99 (Actual) FY00 (Actual) FY00 (Plan) FY01 (Plan) FY02 (Plan) Indicator 1: Percent of operation and maintenance costs covered by collected revenue in the water and wastewater sector NA NA 61 72 62 69 79 Indicator 2: Cumulative number of people with new or improved water or wastewater service in selected areas (millions) NA NA 0 0 0 1.57 1.87 Indicator 3: Percent of operation and maintenance costs covered by collected revenue in the telecommunications sector NA NA 149 138 150 152 153 Indicator 4: Percent of operation and maintenance cost covered by revenue in the power sector NA NA 108 107 108 109 110 Indicator 5: Cumulative number of people with new telecommunications service.(millions) NA NA 0 0 0 1.55 1.55 Indicator Information:
Indicator Level (S) or (IR) Unit of Measure Source Indicator Description Indicator 1: IR Percent of Cost Institutional Development Contractor reports Operation and maintenance costs are defined as labor costs (salaries, bonuses, allowances) plus operating costs minus interest and depreciation. Collected revenue includes revenue actually collected from all sources.The value of the indicator is the simple average of cost recovery ratios across the nine water and wastewater utilities. Indicator 2: IR Cumulative number of Population served by USAID-supported systems and/or infrastructure Construction management Contractors for status of project. Population projections obtained from the master plan documents. The beneficiaries of a water or wastewater project are assumed to be the population of the service area of the utility in which assistance is provided.Benefits accrue to this population only when the entire project is completed (of beneficial use to the utility). Project components include water or wastewater treatment, pumping capacity, and distribution capacity. Indicator 3: IR Percent of Cost Telecom Egypt Annual Reports. The telecommunications sector uses accrual accounting methods. Costs are thus defined as "Total Operating Costs" and revenues as "Total Operating Revenue" from an accrual perspective. Indicator 4: IR Percent of Cost Egyptian Electricity Holding Company (EEHC), Annual Report The power sector uses accrual accounting methods. Costs are thus defined as "Total Operating Costs" and revenues as "Total Operating Revenue". The value of the indicator is the simple average over all seven electric companies Indicator 5: IR Cumulative number of Population served by USAID-supported systems and/or infrastructure Telecom Egypt Annual Reports. USAID contractor reports. The number of people with new telecommunications services is the number of lines added to the system multiplied by the average number of people per household. The cumulative number of people with new telecommunications services is measured from a baseline of zero in 1999. Benefits accrue to this population only when the project is completed (of beneficial use to the utility). Progress on this indicator reflects an increase in the number of people with new or improved services. U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999* 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 929,769 ESF 0 ESF 929,769 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 119,826 ESF 220,641 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 1,049,595 ESF 220,641 ESF 828,954 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 53,803 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 53,803 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 1,103,398 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA * These funds were previously obligated under former objectives 263-001 and 263-006, whose activities have been merged into this SO.
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Last Updated on: May 29, 2002 |
