The northwest Gulf of Suez is earmarked for immense development. Sherine Nasr examines the area's potential Ain Al-Sokhna, located in the northwest of the Gulf of Suez is about to witness accelerated development which, experts believe, will turn the area into a major attraction for foreign direct investment (FDI). One major step towards placing the area on the investment agenda of the country was taken on 3 October, when Minister of Investment Mahmoud Mohieddin announced the establishment of the General Authority for the Economic Zone of the Northwest Gulf of Suez (SEZONE). The new authority will act as an independent body charged with facilitating investment procedures in the area, addressing contenders and tailoring the overall development of the area, Mohieddin said while touring the site. A few days earlier, Egypt signed an agreement with China to establish the major company in charge of infrastructure in the allocated area for development. The product is the Main Development Company for the Northwest Gulf of Suez, established two weeks ago, with an issued capital of LE200 million and a paid capital of LE75 million. According to Mohieddin, the four shareholders in the new company are the General Authority for Investment and Free Zones (GAFI) with a 50.6 per cent share, the Egyptian/Chinese company owning 27.7 per cent, the newly created SEZONE with a 16.4 per cent stake, and Bank Misr with a 3.3 per cent share. "This is the first company to work under the Special Economic Zones Law 83/2002," declared the minister, adding that Law 83 gives special incentives and facilities to companies operating in these zones. "Companies established under this law will enjoy a 10 per cent tax. More significant still, is the one-stop shop which helps investors finish all procedures on the spot," noted Mohieddin. Investors will not have to make shuttle trips to Cairo for licensing or certification. "The strides taken to develop an area of 20 square kilometres of plain desert into a hub of industrial development, in one of the most strategic locations in Egypt, are the result of extensive negotiations for months," said Ziad Bahaaeddin, chairman of GAFI and the nascent SEZONE. Bahaaeddin continued that this major project ranks high among President Hosni Mubarak's priorities, as part of a larger plan to establish some 1,000 new small- and medium-sized factories by 2011. The goal is to accelerate development and help create new job opportunities. One of the main obstacles in establishing SEZONE was the fact that there was no available land for allocation in the area. "The lands for development were previously allocated to five major companies," explained Bahaaeddin. "We negotiated with two of them, and managed to acquire a total of 20 square kilometres of land." After overcoming that hurdle, a master plan for the development of the area was drafted. "Within the next few weeks, the authority and the five companies will sign an agreement by virtue of which all parties concerned will abide by the general outlines of the suggested master plan," announced Mohieddin. By early next year, the Egyptian/Chinese company will invite bids for extending basic infrastructure to the area, as a major step before renting the land out to investors for projects. Mohieddin clarified that according to Law 83, land will not be sold to investors but allocated under a usufructuary right for 50 years, which is renewable. Along with industrial development, a major plan is being set to develop the area of Ain Al-Sokhna into a tourist hub, particularly for curative tourism. According to Governor of Suez Seif Galal, international companies will be invited to present their ideas of how best to develop an area of 170 feddans in Ain Al-Sokhna for an integrated tourist project. "Part of the land is owned by the Governorate of Suez, while the rest is the site of what was once Ain Al-Sokhna Hotel that ceased to operate since Israel's attack on Egypt in 1967," explained Galal. Plans to develop the area into a tourist attraction are expected to draw in international bidders. "The allocated lands are meant to host five-stars hotels, tourist training centres, housing complexes, in addition to other tourist-related services," stated the governor. He added that the project will be promoted to international companies in the same manner as the Mediterranean Sidi Abdel-Rahman resort was two months ago. Although the northwest Gulf of Suez appears to suddenly be the scene of very ambitious plans, development is not all new to the area. The first attempts to tackle development there started in 1998, when spacious lots with full utilities were allocated to a number of major development companies. According to Galal, the industrial zones in Suez now host factories for producing several strategic products. For example, porcelain and ceramics which are exported to at least 55 countries worldwide; six major factories for ready-made garments and stainless steal household wares; as well as petrochemicals, Urea, steel and paper factories. "The volume of investment in these zones is estimated at LE36 billion," said Galal. "There are at least 45,000 workers and most of the production is for export." This industrial boom was aided by two gigantic electricity generating stations, and the flow of potable water which can satisfy the growing needs of different industries. The Sokhna Port, established in 2002, is a major facility serving the imports and exports cargo flows of the Suez Special Economic Zone as well as the Red Sea area. "A state-of-the-art port and logistics centre is now operational. A master plan for further development of the Sokhna port until 2020 has already been designed," said Galal. "At present, we are collaborating with the Ministry of International Cooperation and the investors in the area to build a much needed industrial drainage treatment station, to serve the factories in the governorate," revealed the governor. "This is one of our top priorities."
