Efficient and Sustainable Infrastructure in Egypt

Robust strategic direction helps direct infrastructure investment to where it is needed most. EV2030 provides robust strategic direction, with clear goals and actions and some key performance indicators (KPIs):

• EV2030 would benefit from having KPIs that cover a wider range of infrastructure sectors, including rail, maritime, water, health, education, electricity and digital infrastructure.

• There is some evidence that EV2030 is informing sector plans, such as in transport, and that performance monitoring occurs. To ensure that EV2030’s goals are implemented, it is important that objectives within sector plans are consistently and methodically monitored.

• Egypt’s National Climate Change Strategy 2050 (NCCS2050) sets out robust goals, objectives, actions and KPIs for reducing emissions and adapting to climate change, including recommending both built and non-built solutions. To establish consistency between the NCCS2050 and the second Nationally Determined Contributions (NDC) report, the actions in the NDC can be measured against the KPIs established in the NCCS2050.

Credible and predictable land use and financial planning decisions are essential for creating a credible infrastructure pipeline. Egypt has several good practices in this regard, and has introduced reforms that should significantly improve long-term financial planning for infrastructure:

• Many strategic initiatives are directed from the highest level of government and land use decisions about infrastructure are commonly co-ordinated via master plans. There are examples of good practices in involving stakeholders in land use decision making at the national and sub-national levels.

• Recent planning reforms, the introduction of multi-year capital budgeting and the Integrated System for Investment Plan Preparation and Monitoring (ISIPPM) should all help improve long-term financial planning and asset management.

Robust project selection and appraisal processes ensure infrastructure decisions achieve value for money and deliver desired public outcomes. Additional guidance (see chapter 3) would ensure these practices are strengthened and more widespread in Egypt.

• When prioritising investments, line ministries are guided by differing priorities set at a sector level. However, to obtain funding, MPEDIC requires line ministries to assess all investment proposals for funding by sovereign debt against the Project Selection and Evaluation Criteria.

• The Criteria provide quality assurance and a strategic and economic evaluation of infrastructure proposals. They could be improved by requiring more information and providing additional explanations as to what information is required.

In procurement, Egypt demonstrates several good practices and has implemented reforms for public procurement and PPPs. Expanding the use of procurement models presents a valuable opportunity to unlock even greater value and impact.

• Under these reforms, a public portal is being developed under the General Authority of Government Services to promote procurement opportunities, award decisions and monitor procurement plans. Egypt’s procurement processes also contain many of the features common to competitive tendering.

• Egypt could adopt more pro-competition measures and embed them more firmly within the regulatory framework to ensure wider and more consistent impact. There is an opportunity to diversify procurement approaches to better match project needs and maximize value for money, particularly when compared to PPP projects. This may also help with managing risks appropriately and capturing the widest possible range of private sector innovations.

While there are some good practices in infrastructure operations and maintenance, Egypt’s approach to asset management and identifying the necessary expenditure could be strengthened by adopting the Asset Management Guidance in this report (chapter 4).

• There are examples of public entities achieving efficiencies by using shared-service delivery arrangements across regions and infrastructure types. Egypt also exhibits some practices for holding contractors accountable for project specifications and professional standards. In the event of a contract renegotiation, amendments can be made. In addition, information about charges, costs and performance data is often shared among clients and suppliers. Costs are often indexed in a cost register, with some allowance for price fluctuation.

• Egypt could improve its approach to the planning of maintenance funding by collecting and disseminating more data about asset and network performance. Asset registers could also be used more widely. The introduction of ISIPPM should assist by collecting relevant information and facilitating closer engagement between MPEDIC and line ministries on maintenance planning. Over time, it will be important that ISIPPM can monitor long-term, government-wide trends related to costs, timeframes and intended benefits.