The Ministry of Finance kicked off a third phase of the country's taxi-renovation project, which started in April 2009 and aims to replace older cabs with newer ones, on Monday, with Minister of Finance Al-Morsi Hegazi signing the protocol for the third phase with Minister of Social Affairs and Insurance Nagwa Khalil and the heads of the banks participating in the project, the car manufacturing companies, and the Misr Insurance Company. The third phase aims to replace 15,000 vehicles that have been in service for over 20 years, raising the total number of replacement cabs to 56,000. According to Amgad Mounir, deputy minister of finance and head of the taxi-renovation project, the third phase has advantages including the LE5,000 paid to black-and-white taxi-owners in return for their old vehicles regardless of condition, paying sales taxes on the new cars at an average of LE9,500 per vehicle, and exempting the imported components needed for the assembly of the cars used for the taxi-replacement project. Mounir added that the participating banks were providing other advantages, such as providing loans for drivers to get new taxis at a discounted annual interest rate of 7.5 per cent instead of nine per cent, and the Misr Insurance Company had undertaken to lower its annual fee to 3.25 per cent instead of 6.25 per cent for insurance against accidents and theft. The National Bank of Egypt and Alex Bank announced during the signing that they were targeting LE150 million and LE100 million, respectively, to financing the third phase of the taxi-replacement project and were providing loans for drivers to get new cars. The minister of finance also announced that his ministry would support taxi-owners with an additional LE400 million. Mounir said that the ministry would allow taxi-owners participating in the project's third phase to choose a marketing company that would place advertisements on the new taxis in return for paying the drivers a certain amount of money every month. Although the ministry did not specify the amount of the monthly installments that each driver participating in the new phase would have to pay, it is expected to be no less than an average of LE1,200, as in the previous two phases. In those phases, an advertising company paid LE550 of the monthly installment in exchange for displaying ads on the taxis. But the advertising companies then pulled out of the project, which led the Finance Ministry to replace them by paying the LE550 in monthly instalments for 41,000 cabs. The ministry will not be responsible for paying any money to the taxi-drivers in the third phase as compensation for the absence of ads. Rather, it has left it to the cab owners to attract advertising. The third phase of the project was kicked off amid protests by many taxi-drivers who had participated in the first two phases who have been calling for the postponing of the monthly installments because of the current poor economic state of the country. In an interview with the daily Al-Shorouk newspaper, the head of the White Taxi Association, Salah Seddik, said that many drivers were unable to pay the monthly instalments and were demanding that their cumulative instalments be rescheduled. He also said that the new taxis were overpriced and should be revalued and that spare parts were very expensive. The events of the 25 January Revolution led the Ministry of Finance to postpone the instalments due in January, February and March 2011. “The ministry bore LE36 million in interest resulting from postponing the payment of the installments,” said Mounir, adding that the cost of cars purchased through installments outside the ministry's project amounted to an average of LE118,000, while they cost only LE48,000 through the project, saving drivers LE70,000 at a discount of about 60 per cent. Mounir stated that the white taxi owners had been supported with over LE1 billion in public funds since the beginning of the replacement project and until February this year, explaining that this figure represented LE205 million as the cost of scrapping the old vehicles, LE343 million in sales taxes, LE360 million in the cost of customs exemptions on spare parts, and LE475 million as a replacement of what the advertising company had used to pay. The minister stressed during the protocol signing on Monday that increasing demand to join the project on the part of drivers was evidence that the taxi-replacement scheme was successful, adding that he had received requests from many governorates asking to join a fourth phase.
