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Friday, 07 September 2012

Qatar to invest $8bn at Port Said East in LNG, iron and steel plants

QATAR has announced an $8bn investment in the construction of an integrated industrial complex at Port Said East, at the northern entrance to the Suez Canal in Egypt.

Qatar’s investment, involving the building of LNG, power, iron and steel plants, is part of an $18bn  package which includes a $10bn investment in tourism projects including a marina, along the West coast of the Suez Canal.

Qatar Prime Minister and Foreign Minister, H E Sheikh Hamad bin Jassem bin Jabor Al Thani and Egyptian leader, Mohammed Morsi, the country’s first elected President, announced the five-year investment plan in Cairo on Thursday.

“The investment in an integrated complex sounds similar to the plan we designed for Port Said Port Authority about two years ago,” said Wim Klomp, port project director at Dutch consultants, DHV - now RHDHV since its merger with Royal Haskoning earlier this year.

Mr Klomp, who was project manager of the ‘ Port Said East Master Plan,’ told Port Finance International that a multi-purpose terminal, together with a liquid bulk and LNG terminal were envisaged together with an 85km2 industrial cluster to support cargo shipments from and to terminals.

Port Said East is home to a robust transhipment trade at Suez Container Terminal, where operator APM Terminals is seeking to expand capacity.

It finished a quay extension last year but strong demand from East-West container traffic has led it to look at further enlargement plans.

Government plans to open a tender for a second container terminal have not materialised.

Sources in Egypt understand that Qatar and Egypt have overcome issues surrounding the sale of plots of land allowing Qatar's investment to be made.

Under a former plan for Port Said East, the Egyptian government had envisaged using the landlord port system, however it unclear whether what policy the new Egyptian administration will adopt.

Qatar's investment announcement however reflects a mood of increasing investor and consumer confidence in Eqypt.

During the last few months, Egypt has received more than $5 billion in loans and pledges, including $2 billion in direct budget support from Qatar and loans from Saudi Arabia and the Islamic Development Bank.

Qatar deposited $500 million in direct budget support at the Egyptian central bank in August and said it would pay the remaining $1.5 billion over the coming three months.

The country is awash with industry rumours over new investments and new opportunities opening following the Arab Spring revolution which led to the end of Eqypt's dictatorship.

But industry figures consulted by Port Finance International remain sceptical over FDI.

“The only certainty here is uncertainty,” said a port industry director in Port Said.

Copyright © 2012 Port Finance International Ltd.  By PFI's London newsdesk.


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