Experts believe that several economic decisions undertaken by the government are flawed in nature and procedure, writes Mohamed El-Sayed Participants in a two-day conference discussing 'Decision-making and development projects in Egypt' concluded that some economic decisions pertaining to mega projects are drastically misguided. The conference, launched on Monday and organised by the Partners in Development research group, highlighted the government's lack of a comprehensive overview when preparing for major development projects. Convening experts, mainly university professors, slammed the government's decisions in a number of mega projects at Toshka, Phosphate Abu Tartour, the Aluminum Compound in Nagaa Hammadi, the North Coast, Sinai and Red Sea. "It's contradictory that the regime embarked on a number of major economic development projects in the mid-1990s, at a time when it was advocating and transforming into a market economy in stride with global capitalism," stated Mahmoud Mansour Abdel-Fattah, professor of economics at Al-Azhar University. The government's move coincided with the signing of the Marrakech Agreements and the World Trade Organisation treaties, but also at a time when there was great deficiency in the trade balance and the value of the Egyptian pound had fallen against the US dollar. The Toshka and Phosphate Abu Tartour projects received the harshest criticism from participants. Citing the vast land reclamation project at Toshka in Al-Wadi Al-Gadid as a blatant example of erroneous economic decision-making, Abdel-Fattah stated that its implementation did not proceed as planned and it continues to proceed off course. "A report issued by the Central Auditing Apparatus in 2004/2005 said that only two per cent of the total 420,000 feddans earmarked for agriculture was harvested," he quoted. "That's why the government began calling on investors, the Armed Forces and universities to invest in the project." While the government has built huge constructions on site, such as the Sheikh Zayed Canal and the massive water pumping stations, "only a few hundred feddans were planted and were accompanied by major media hype and false promises by main investors," insisted Abdel-Fattah. He believes that the aim of investors was not land reclamation, for which they bought the land at rock bottom prices, but rather to keep the land until its value rose and then selling it for huge profits. Abdel-Fattah lamented that when the Toshka project was launched in 1996, the portion earmarked for agricultural development did not exceed five per cent of the land, while mining, tourism, industry as well as other ventures were also slated there. Eventually, however, Toshka became a solely agricultural project and the idea of establishing a comprehensive community at Toshka evaporated. "The project should be reformulated to include industrial, tourism and mining activities, rather than just being an agricultural endeavour," suggested Abdel-Fattah. As for Phosphate Abu Tartour, participants agreed that this project also proves that some economic decisions are not money makers. Having cost the government about LE5 billion, wasted funds -- in the form of accumulated debts and bank interest -- exceeded LE11 billion by 30 June, 2004. According to Mohamed Reda Moharram, professor of mining engineering at Al-Azhar University, in the 1980s the government believed that most of the production of phosphate from the Red Sea region and the Nile Valley will soon run out, and hence it launched the Abu Tartour project. Today, after 20 years of the launch, Al-Nasr Company produces two million tonnes of high-quality phosphate from the Red Sea and Nile Valley, "while Abu Tartour produces nothing at all," noted Moharram. Adding insult to injury, the government relied on the National Investment Bank -- whose capital mainly comes from the savings of pensioners -- to finance parts of the project. Although the World Bank warned in 1983 that feasibility studies conducted by a Swiss-French consultant overestimated the price of phosphate at Abu Tartour, hyped its export potential and underestimated the cost of the project, the government went ahead with the project any way. "I don't know whether what happened in this project was institutional corruption or a combination of negligence and individual corruption," remarked Moharram.
