The cabinet approved the establishment of a free zone in the city of Nuweiba in South Sinai on Saturday in a decision that is in line with the new investment law and regulations concerning the establishment of free zones. Sahar Nasr, minister of investment and international cooperation, said at a press conference that the decision was part of a plan to develop Sinai through injecting investment and cooperating with Arab funds. Negotiations were underway to build an infrastructure network, and the establishment of a service centre for investors in the new free zone had already been approved to facilitate procedures, she added. South Sinai Governor Khaled Fouda told Al-Ahram Weekly that “establishing a free zone in Nuweiba will revive trade in the city. Nuweiba has the potential to be a marvellous free zone, and a new port area has already been constructed in the city costing LE350 million.” Fouda added that the port can receive up to 350 container ships. “A protocol has been signed with a Chinese company to build a container terminal. It will open in two years and will facilitate trade to and from Nuweiba,” he commented. Established on a million square metres, “Nuweiba's free zone will serve Saudi Arabia's Neom project across the Red Sea. The zone, the preparation of which will begin soon, will host light industry, maritime and shipping services, food and pharmaceutical industries and fish processing and drying facilities,” Fouda said. Neom is a project for a new smart tourist city located in the northwest of Saudi Arabia. Free economic zones are designated areas in which companies are taxed lightly or not at all in order to encourage economic activity. Egypt has 11 free zones, including those in Nuweiba and Minya. No free zone has been declared in the country since 2005. Egypt's free zones contribute 24 per cent of total imports and provide a million job opportunities, directly and indirectly. The project is part of plans to create a Riviera-like coast that includes Egypt, Aqaba in Jordan, Eilat in Israel, and cities in Saudi Arabia, said Sami Suleiman, head of the Investors Association in Taba and Nuweiba. The plan was born in 1998 with the idea that Nuweiba could become a city for leisure and entertainment. It would allow activities such as gambling, prohibited in Israel, and drinking alcohol, forbidden in Saudi Arabia. The Palestinian Intifada and the protests that have swept Gaza since the early 2000s have led to putting off the plan, Suleiman explained. He said that a free zone in Nuweiba would serve the tourism that had almost come to a halt in the city and revive its hotels and resorts. Out of 65 hotels in Nuweiba, only 10 are still functioning, Suleiman stated. Suleiman believes the new zone could also be a hub for traditional handicrafts, for which especially the Sinai Peninsula, Luxor and Aswan are known, as well as Egyptian cotton products. He added that Sinai is famous for botanical products used in manufacturing medicines. The free zone of Nuweiba could be a centre for exporting these medicinal plants, he said. Stores in the Red Sea city could act as outlets for Egyptian products to be exported, he suggested. The free zone could also house a commercial area and another for light industries, such as electronic and electrical appliances like televisions and mobile phones. These items were needed in neighbouring countries such as Saudi Arabia and Jordan, Suleiman said, adding that another area could display fruit and vegetables to be exported to the Arab countries. Suleiman said there was a need to facilitate tourists coming through Nuweiba and Eilat. The crossing fees now stand at LE400, he said, and they discouraged vacationers from visiting Nuweiba. Eliminating or decreasing the fees would encourage more tourists to visit the city, he said, helping its tourist establishments.