This chapter analyses and assesses the current practices in Egypt in infrastructure planning and delivery. Along the five main dimensions presented in the previous chapter - strategic vision, stakeholder engagement, project selection and prioritisation, public procurement and public-private partnerships, and infrastructure operations and maintenance – this chapter explains the importance of each aspect for infrastructure governance, presents the international best practice and Egypt’s current practices.
Efficient and Sustainable Infrastructure in Egypt
2. Assessment of current practices
Copy link to 2. Assessment of current practicesAbstract
2.1. Strategic vision
Copy link to 2.1. Strategic visionThis section assesses the extent to which Egypt’s infrastructure planning and delivery decisions are informed by an overall strategic direction, which ensures infrastructure decisions are contributing to broader public policy objectives.
2.1.1. Why is strategic vision important?
Having a clear strategic intent is important for public investments, especially infrastructure, given the long lead times required to deliver major physical assets and the many decades or centuries they can be in operation. Most major infrastructure investments around the world involve participation by the private sector across many stages of the lifecycle, including legal, planning, design, engineering, financing, construction and maintenance phases. The private sector relies on having a steady, predictable and reliable pipeline of projects to give them the confidence to invest in the necessary people, plant and equipment. In turn, countries benefit from being able to access high quality skills and capabilities that they can draw upon at different stages of the investment lifecycle.
This certainty begins with having a clear strategic intent. For the strategic direction to be reliable and credible, it must be supported by a specific set of programmes, projects and policy initiatives with a broad indication of timeframes and a clear rationale and articulation for how those investments help implement the strategic direction. The high-level vision, priorities, targets and KPIs must be set at the highest level of government policy making and clearly and consistently cascade down through the planning hierarchy, being reflected in the subordinate planning instruments delivered by ministries, agencies and governorates. Ministries, agencies and governorates will need to build upon the high-level direction with more specific priorities, targets and KPIs, which should become more specific the further down the planning hierarchy. But it is essential that the highest-level priorities, targets and KPIs are clearly reflected in subordinate strategy and planning instruments so that government policy makers can easily measure whether their policy goals are being implemented.
Being able to demonstrate that investments align with the long-term, strategic direction enables government to demonstrate to the public that it is allocating resources where there is a genuine need, which is important for upholding integrity and transparency. Having public policy goals at the centre of decision-making also helps infrastructure providers to think about the widest possible range of solutions to a policy problem, which could include either supply-side solutions (e.g. building a new transport corridor to meet demand) or demand-side solutions (e.g. introduce network pricing to reduce or change demand patterns). This opens decision-makers up to new possible solutions that may be more affordable and deliver greater benefits more quickly than if they were to deliver conventional solutions. Demonstrating that investments address genuine needs also builds trust with communities and signals to the private sector that the government has a clear policy plan that they are committed to, which can help give the private sector the confidence to invest in a country’s infrastructure market.
It is important to note that the strategic planning phase is not the stage at which decision-makers choose infrastructure programmes or projects. The strategic planning phase should deliberately avoid settling on any solutions, instead focusing on setting a high-level vision, identifying genuine public policy needs and making the case for the government to act on a particular need. The subsequent phases of investment planning, including the economic, commercial and management stages, are where potential solutions are shortlisted and assessed (see 3.4 Potential Value for Money).
2.1.2. Current international best practice
For this reason, it is important that countries develop long-term strategic visions for infrastructure which are:
informed by rigorous assessment of current and future infrastructure needs at the national and subnational levels, and presents a plan on how these needs should be prioritised and addressed.
monitored, flexible and regularly updated to promote and take into account the impact of evolving technologies and infrastructure needs.
the product of a broad-base political consensus and stakeholder engagement process, based on clear assumptions, properly co-ordinated across levels of government and across relevant line ministries and agencies taking into account synergies across sectors
contributory to the achievement of sustainable and inclusive development in line with long-term policy objectives, including national and international commitments on environmental protection, climate resilience and low greenhouse gas emissions, human rights, social inclusion, gender equality, regional disparities and urban-rural connectivity, among others.” (OECD, 2020[1]).
2.1.3. Current practices in Egypt
Egypt Vision 2030
Egypt’s overall strategic direction is outlined in Egypt Vision 2030 (EV2030), which provides robust strategic direction, with clear goals and actions, with some indicators for measurement. The first iteration was launched in 2016 and updated in 2023. EV2030 sets out challenges, objectives and indicators across social, environmental and economic dimensions through to 2030. Responsibility for implementing and monitoring the commitments in EV2030 fall to the relevant ministries, which are expected to incorporate EV2030’s strategic direction into their sectoral strategies. Performance monitoring of EV2030 is undertaken periodically by MPEDIC’s Sustainable Development Unit by tracking the progress of the Vision’s KPIs identified in its monitoring and evaluation framework. This is complemented by ongoing efforts to ensure the alignment between the KPIs in the Vision and the KPIs on the outcome, output and input levels outlined in the government programme and sectoral plans.
To inform the 2023 update, MPEDIC’s Sustainable Development Unit adopted a participatory approach engaging all actors and development partners from the government, the private sector, civil society, academics and experts in different fields. The process included 28 working groups established from the different governmental entities and around 60 workshops, which focused on identifying gaps in the first version. Thematic workshops were also held with experts, academics and practitioners to discuss the indicators and their targets to be included in the updated EV2030. The updated version was then presented for discussion in the National Dialogue. Around 40% of the participants throughout the update process were women, and also involved participation from youth and people with disabilities.
EV2030 includes the following guiding principles:
1. Human-centred development;
2. Equity and accessibility;
3. Resilience and adaptation and;
4. Sustainability.
EV2030 is also guided by several key enablers, which include:
1. Financing;
2. Technology and innovation;
3. Digital transformation;
4. Data generation and availability;
5. Supportive legislative and institutional environment;
6. A supportive cultural system and;
7. Population growth control.
EV2030 is also supported by six strategic goals:
1. Improve Egyptian’s quality of life and raise their living standards;
2. Social justice and equality;
3. Integrated and sustainable environmental system;
4. Diversified, knowledge-based and competitive economy;
5. Well-developed infrastructure and;
6. Governance and partnership.
These six strategic goals are supported by 32 general goals. The fifth strategic goal, well-developed infrastructure, is described as follows:
Well-Developed Infrastructure recognizes the significance of ensuring basic and adequate services, including energy, electricity, water, and sanitation. It underscores the importance of establishing secure and sustainable transportation systems, be it through the Suez Canal as a waterway, the utilization of electric traction within the railway network, or the development of a comprehensive network of roads, bridges, ports, and airports. Additionally, it entails developing communication and information systems to foster an appealing investment environment that supports public-private partnerships in infrastructure projects, and to construct an advanced industrial base that enhances the competitiveness of the national economy (Ministry of Planning, Economic Development and International Cooperation, 2023[2]).
“Well-developed infrastructure” is supported by four general goals:
1. Providing basic and adequate services;
2. Providing secure and sustainable transportation systems;
3. Promoting sustainable energy resources and systems and;
4. Developing communication and information systems.
Each goal is then supported by a set of targets and KPIs (see Table 2.1).
In the 2023 iteration, MPEDIC has made changes aimed at improving EV2030’s monitoring and evaluation framework and ensuring EV2030 has a strategic focus. Firstly, MPEDIC has amended the KPIs on an outcome, output and input basis so they more closely align with EV2030 and sectoral plans. MPEDIC also reduced the number of KPIs, for which it is understood there were too many in the first iteration of EV2030 for effective monitoring to take place. As a result, there are several differences between the 2016 and 2023 versions.
For instance, several of the goals related to infrastructure were changed or amended between the 2016 and 2023 iterations of EV2030. In addition, many of the KPIs that were set as 2030 targets in the 2016 version have changed or been removed. For example, KPIs related to water efficiency have been removed from the 2023 version, such as “Upgrade irrigation systems, optimise water flows, increase efficiency surface irrigation by 30%”. In addition, much of the specificity of actions in the water sector has been reduced, such as introducing penalties for violations, building groundwater treatment plants, sewerage treatment plants, drainage, water harvesting, desalination, irrigation, dams, pumping station upgrades and undertaking water conservation efforts.
In transport, some goals have changed, such as: “Enhance role of private sector to participate in transport; development, training, incentive programmes for Ministry of Transport officials; enable competition of transport services.” In addition, the following 2016 KPIs were removed: “Increase goods across the Nile and its tributaries by 28%; raise rail for goods transport by 20%; and increase river transport for goods by 5%”. EV2030 now includes no KPIs related to rail or maritime.
Finally, since 2016, energy has been elevated to play a greater role in achieving sustainability and decarbonisation goals, as well as providing energy security and economic development. As a result of this change, the energy goals listed in 2016 are not all included in 2023. While the 2023 version prioritises “Fostering a conducive environment for investment in the energy sector” and “Improving the efficiency of refineries”, it is unclear whether these are consistent with the energy goals set in 2016, such as: “ensuring energy security, increasing the contribution of energy to GDP, maximising utilisation of domestic energy resources, enhancing rational and sustainable management of the sector” and “reducing the intensity of energy consumption.” In addition, all previous KPIs for the energy sector have been removed and new KPIs created. The only exception to this is a 2016 KPI to “Measure of thermal efficiency for electricity production by comparing the total input with the total output”, which is largely consistent with “Thermal efficiency of electrical power generation (%)” included under “providing basic and adequate services” from the 2023 version.
MPEDIC has set 2025 and 2030 as the next dates to carry out monitoring exercises of the performance of EV2030’s KPIs. It is reasonable for strategic visions to be updated and moderated around every 5 years to reflect political, economic and social changes. This is especially true for the period between 2016 and 2023, during which the international community experienced the COVID-19 pandemic and economic turbulence. So while some revision can be expected, it is important that future changes are minimised because, as noted in 2.1.1, credible and consistent long-term plans give private infrastructure developers a degree of certainty about the government’s infrastructure plans, providing them with the confidence to invest in people, property and equipment. In addition, by setting actions and indicators that remain unchanged over time, countries can demonstrate their commitment to their infrastructure goals by showing their progress towards achieving them, demonstrated by having quantifiable and robust indicators. These are important factors to consider in case the monitoring exercise will conclude that the strategic vision should be revised.
Overall, the 2023 and future iterations would benefit from more KPIs that would enable decision-makers to undertake a more comprehensive assessment of whether Egypt is achieving its goals. For example, given the transport goal focuses on improvements in road, rail and maritime transport, it would benefit from building on the existing KPIs focused on road quality and including 2-3 additional KPIs to measure whether Egypt is achieving its rail and maritime objectives. We understand MoT is developing new KPIs that may align more closely with this recommendation are currently under development. Similarly, when measuring the performance of “basic and adequate services”, this goal could be better supported by 2-4 additional KPIs on the number of outages across electricity, water and potentially other utilities. A good example of relevant KPIs for measuring basic and adequate services comes from the Sustainable Rural Sanitation Services Programme for Results. The Programme’s aim is to strengthen institutions and policies for increasing access and improving rural sanitation services in the Governorates of Beheira, Dakahliya, and Sharkiya in Egypt. It contains a series of KPIs with baselines, current results and targets measuring various outcome, input and output-based measures, such as access to sanitation and numbers of functioning wastewater treatment plants and household connections (World Bank, 2024[3]). Finally, for the goal of “Developing communication and information systems”, the policy of “Achieving digital equity” could be supported by a KPI that measures the digital uptake of communities where it might currently be low, such as remote communities. Table 2.1 shows EV2030’s commitments related to infrastructure, KPIs, progress reporting, role of stakeholders.
Table 2.1. Egypt Vision 2030’s commitments related to infrastructure
Copy link to Table 2.1. Egypt Vision 2030’s commitments related to infrastructure|
General goals |
Action |
Indicator |
Baseline (2019) |
Target (2025) |
Target (2030) |
|---|---|---|---|---|---|
|
Providing basic and adequate services |
Fostering a conducive environment for investment in the energy sector |
Thermal efficiency of electrical power generation (%) |
48.6 (2020/ 2021) |
50.2 |
50.2 |
|
Continuing the programme to establish service and supply chains |
|||||
|
Improving the efficiency of refineries |
|||||
|
Activating the involvement of the private sector |
|||||
|
Designing public utilities services |
|||||
|
Reinforcing the role of civil society |
|||||
|
Ensuring regular maintenance of basic services projects |
|||||
|
Secure and sustainable transport systems |
Gradually transitioning towards clean modes of transportation |
Quality of Road Infrastructure Index (ranking out of 141 countries) |
28 |
25 |
22 |
|
Smart, integrated transportation networks |
|||||
|
Enhancing the competitiveness of maritime transport |
|||||
|
Improving the efficiency of locks and river routes |
Road Connectivity Index (ranking out of 141 countries) |
48 |
46 |
44 |
|
|
Expanding the use of smart transportation applications |
|||||
|
Expanding passenger transport services with distinctive features (safety, accessibility, smart, air-conditioned, internet connectivity, timesaving) |
|||||
|
Developing railways for passenger and freight services |
Infrastructure Pillar in the Global Competitiveness Index (ranking out of 141 countries) |
52 |
50 |
48 |
|
|
Integrating sustainable transportation principles into urban planning |
|||||
|
Facilitating the mobility of people with disabilities |
|||||
|
Developing the road safety system |
|||||
|
Promoting sustainable energy resources and systems |
Improve the capacity of the electricity grid |
Share of renewable energy in electricity generation (%) |
20 |
29.1 |
40.3 |
|
Foster an attractive investment environment for new, renewable energy |
|||||
|
Monitoring advancements in energy storage |
|||||
|
Encourage decentralised, small-scale renewable energy |
|||||
|
Stimulating private sector engagement in renewable energy projects |
|||||
|
Disseminating energy-efficient technologies |
|||||
|
Developing communication and information systems |
Achieving digital equity |
Fixed broadband subscriptions per 100 people (%) |
6.95 |
11 |
14 |
|
Training government employees |
|||||
|
Disseminating a culture of cyber security |
|||||
|
Developing clear legislation and regulations |
|||||
|
Attracting global data centers for investment |
Internet subscriptions through mobile phones per 100 people (%) |
40 |
65 |
79 |
|
|
Expanding the reliance on big data |
|||||
|
Creating an academic and scientific environment |
|||||
|
Capitalise on rapid advancements in emerging technologies |
EV2030 provides some information on its infrastructure needs, such as the need to diversify from thermal electricity generation, noting that around 88.2% of electricity was from thermal sources and 11.8% from renewable sources in 2021/22. EV2030 also provides evidence for why investment is warranted in the water sector, describing how Egypt’s total water needs are 11 billion cubic metres annually, while only 60 billion cubic metres is produced (Ministry of Planning, Economic Development and International Cooperation, 2023[2]). However, the 2016 iteration provides more detail on Egypt’s infrastructure needs, particularly in transport and digital connectivity. For example, in transport, the strategic case for multi-modalism and a need to respond is well-established: the 2016 iteration recognises a heavy dependence on private vehicles and a lack of adequate transport alternatives, which then acknowledges the need for investment in road, rail and river transport, which is supported by several initiatives.
Another key difference between the two versions is that the 2016 version listed infrastructure programmes and mega projects, including the Suez Canal Development Project, construction of the new administrative capital and the Northwest Coast Development Project. However, the 2023 iteration does not list any projects. As EV2030 is an instrument that sets out a high-level vision with supporting policies and KPIs, removing information on infrastructure needs and specific projects from the 2023 version is acceptable if programmes and projects are specified in subordinate planning instruments, such as master plans for transport, water, electricity and other infrastructure sectors.
Indeed, several of EV2030’s goals are reflected in subordinate plans within the transport sector. EV2030 emphasises the need to enhance public transportation along with urban development, as these areas represent key challenges. The Ministry of Transport (MoT) has made significant efforts at the policy and project levels to address these challenges, by preparing a sustainable transport strategy that includes the Ministry’s strategic objectives, policies and projects that support them. The strategy sets out goals under three major pillars:
The expansion of the electric-based transportation system includes the expansion of metro networks, monorail and light rail projects, rehabilitation of certain tram lines, the expansion of the high-speed train network, encouraging the use of electric vehicles through electrifying the bus and taxi fleet, expanding the natural gas bus fleet, and introducing P&R policies and first-mile and last-mile public transport options. The enhancement of the railway system in Egypt includes freight and passenger railway transportation projects, and a unified ticket system. The expansion of the interchange stations encompasses the Adly Mansour Station project, which connects 5 different means of transportation, as well as the creation of interchange stations between metro lines, monorail lines, LRT-metro, and high-speed train lines.
In addition, the MoT’s National Transport Study, funded and delivered by the Japanese International Cooperation Agency (JICA), reflects EV2030’s goal of multi-modalism through investment in road, rail and maritime. For instance, the Transport Study includes a “multi-modal transport hub”, which service the Cairo, Alexandria and Sokhna, Cairo-Alexandria, Cairo-Suez and Upper Egypt Axes, and contains a proportionate mix of road, rail and maritime projects. The Cairo-Damietta / Port Said Axis also reflects a multi-modal approach, with mostly rail projects and two port-related initiatives. However, the Mediterranean, the Sinai, Delta Waterways, Red Sea and East-West Axes are heavily dominated by road over rail projects (Ministry of Transport, 2012[5]). Admittedly, the Transport Study (2012) pre-dates EV2030 (2016), but what this analysis shows is that the Transport Study is broadly aligned with EV2030 and therefore may not need to be updated. Overall, EV2030’s goal of multi-modalism through investment in road, rail and maritime is being reflected in the subordinate transport plan.
In the water sector, the Water Resources Development and Management Strategy until 2050 reflects EV2030’s focus on desalination and water infrastructure upgrades ((n.a.), 2016[6]). Similarly, Egypt’s Port Development Strategy 2030 describes objectives in the areas of port upgrades that align with EV2030 (Ministry of Transport, n.d.[7]). However, for all infrastructure sectors, it is important that goals describe an outcome whereby the wellbeing of future users of infrastructure will be enhanced. Good examples include “reducing deaths or serious injuries on the transport network”, or “reduce Egypt’s contributions to rising temperatures by reducing GHG emissions from the electricity system”. While most of the strategic documents made available to the OECD include outcomes-based goals, the Transport Study includes goals that are input-based, including: “encouraging private sector participation” and “providing a road network with tolls”. These examples are described as “input-based” because they measure inputs to an outcome, rather than a desired result. To illustrate, citizens do not derive value from the private sector being involved in infrastructure or being paid for by tolls; however, they may benefit from the innovations provided by private sector parties, or more efficient services enabled by tolls.
Finally, it is also important to ensure that sector plans are routinely monitored in a consistent and methodical manner to ensure agencies can assess whether they are on track to meet their commitments, or whether changes need to be made. It is also an important method of holding public officials accountable for their commitments. Egypt can establish systematic monitoring arrangements that focus on outcomes, as well as inputs and outputs, through the development of the Automated Information Management System (AIMS). AIMS is an electronic system for managing data and following up on projects funded by development partners that support “a digital transformation and promote the principles of international cooperation” (Ministry of Planning, Economic Development and International Cooperation, 2024[8]). AIMS gathers data related to development co-operation agreements, projects and programmes to ensure the availability of relevant information at all levels between MPEDIC and national agencies to enable the follow-up and evaluation of development co-operation activities. It also enhances the follow-up of the financial and technical performance of projects funded by multilateral and bilateral development partners, extracting periodic reports for decision-makers, and sharing data with project-related entities. Furthermore, Egypt’s National System for Monitoring and Evaluation, known as ADAA, is a government-based network that facilitates the monitoring and evaluation of all state entities. Through quarterly monitoring reports, ADAA enables the government to assess the performance of the state administrative apparatus in accordance with international standards (OECD, 2024[9]). This platform allows intra-governmental monitoring, whereas AIMS tackles the monitoring and evaluation of development co-operation projects.
National Climate Change Strategy 2050 and Nationally Determined Contributions
Reducing emissions and addressing the effects of climate change will require large-scale, transformative responses from all countries. This is equally true for Egypt, which is significantly exposed to the risks of climate change, in part due to its dependence on the Nile River. In addition, infrastructure decisions will play an important role in shaping every country’s climate change response. For this reason, it is critical that countries have long-term strategies for emissions reduction and climate adaptation that integrate the role of infrastructure.
Egypt’s National Climate Change Strategy 2050 (NCCS2050) (Environment, Ministry of, 2022[1]) achieves this by setting out goals, objectives, actions and KPIs for reducing emissions and adapting to the effects of climate change. In acknowledgment of the fact that countries will struggle to deliver their infrastructure goals through built solutions alone, Egypt recommends a range of built and non-built solutions to achieve NCCS2050. These actions include increasing the share of all renewable and alternative energy sources, raising the efficiency of road infrastructure to reduce congestion, more electrified mass rapid transit networks, use of natural gas for fuelling cars, ships and for heating. NCCS2050 also commits to carbon capture, developing the freight transport network, maximising energy efficiency and using digital technology to reduce energy consumption. NCCS2050 also commits to capitalising on existing infrastructure through maintenance, renewals and upgrades to make infrastructure more resilient and lower-emitting, as well as including climate considerations into the design of new infrastructure. NCCS2050 is supported by robust objectives and KPIs for measuring whether the actions listed under the objectives will be achieved. Good examples include measuring the percentage of contribution of new and renewable energy to the total production, length of metro/electric train networks, mass transit user volumes, electricity transmission line efficiency ratios and the number of facilities that have obtained international certificates for energy management.
To be effective, it is important that long-term strategies have buy-in from the highest levels of government. NCCS2050 is overseen by Egypt’s National Climate Change Council, which is headed by the Prime Minister with support from executive and technical working groups. The Strategy was developed based on a SWOT analysis (strengths, weaknesses, opportunities, threats). NCCS2050’s development was informed by regularly organised consultation meetings and workshops with stakeholders from the public sector, non-governmental organisations and academia. More than 50 participants were involved in the NCCS Review and attended the Strategy Data Collection Workshops. The participants included representatives from various ministries, entities and academic bodies as well as 15 different NGOs. In the early stages of the NCCS preparation, an Advisory Committee was formed with the involvement of high-level Egyptian experts, who met twice to prepare the NCCS. Given responding to climate change will require transformative change with wide input from across sectors of government, it is pleasing to see that the Strategy commits to integrating with national and sectoral strategies, including EV2030, and commits to mainstreaming climate actions into national planning and budgeting generally. While the Strategy also includes high-level costs and potential funding sources, the high-level nature of this document means it does not constitute a full financial outline, which is appropriate given its strategic, high-level nature. The Strategy also includes a plan for reporting on its achievements.
NCCS2050 is supported by Egypt’s Second Updated Nationally Determined Contributions (NDC) Report, updated in June 2023. The goals in the NCCS2050 align with the actions in the NDC, containing commitments to increase renewable energy and deliver low carbon transport and energy efficiency in buildings and other infrastructure. The NDC sets 2030 targets for GHG output by sector, including electricity generation, transmission and distribution and transport. For example, in electricity, the NDC commits to a GHG emissions reduction of 37% on the 2015 amount by 2030 through various means, including by renewable electricity generation contributing to 42% of total generation by 2030. In transport, the NDC commits to a 7% reduction on the 2015 figure by 2030 through extensive urban electric rail projects, transforming buses to operate on lower carbon fuels and roading improvements to reduce congestion. Egypt has also taken practical steps to implement the NCCS2050 and NDC via the Nexus for Water, Food, and Energy (NWFE) and NWFE+ (transportation) programmes. Through these programmes, 9 out of 26 high priority projects for adaptation and mitigation are now eligible for financing via debt swaps, guarantees, concessional loans, grants and private investments (Ministry of Planning, Economic Development and International Cooperation, 2024[8]).
To establish strategic consistency, the actions in the NDC could be measured against the KPIs established in the NCCS2050. Having this information would help decision-makers understand whether Egypt is on track to achieve its climate goals, and if not, whether they need to change plans to meet their commitments. It is also vital that a strategy like this is informed by wide-ranging stakeholder engagement, given the various actors involved in making decisions about infrastructure and the numerous interdependencies that exist between infrastructure networks.
Finally, addressing climate change begins with having a long-term vision and strategy. To implement the Strategy, countries then need robust processes for planning, appraising, funding, procuring and delivering infrastructure that can give effect to a country’s climate goals. These processes do not have to be specifically designed for climate change but must be broad enough that that they can capture a wide range of costs, benefits, issues, risks and factors across economic, social considerations, including climate-related dimensions. For Egypt to have the full arrangements necessary to manage climate-related issues across the infrastructure lifecycle, it will be vital to implement the recommendations pertaining to project selection and prioritisation and infrastructure operations and maintenance (see 1.3 “Project Selection and Prioritisation”).
2.2. Infrastructure planning (land use, financial planning and stakeholder engagement)
Copy link to 2.2. Infrastructure planning (land use, financial planning and stakeholder engagement)This section focuses on how robust land use planning and funding arrangements are essential for implementing the strategic vision and delivering on a government’s commitments. Credible infrastructure planning also requires robust methods for involving relevant stakeholders, which is also explored in this section.
2.2.1. Why is infrastructure planning important?
Land use and financial planning are the mechanisms by which governments commit to delivering their infrastructure objectives. As the strategic vision signals a country’s infrastructure investment intentions to the market and stakeholders, land use and financial planning decisions are a government’s tangible commitment to delivering its goals. Grounded in legal and budgetary commitments, land use and financial decisions form the basis of a credible infrastructure pipeline, which, as noted in 0 (Strategic vision), helps build trust with citizens and gives the private sector sufficient certainty to invest in the property, plant and equipment needed to deliver the pipeline projects.
Because infrastructure assets are long-lived, it is important that land use and financial planning decisions are signalled in advance and that governments remain committed to these decisions for at least several years. Advanced planning of infrastructure can also give countries the foresight to bundle programmes of projects across sectors and even levels of government, which can attract private investors who are seeking larger-scale investment opportunities.
As well as attracting investment, a credible, predictable pipeline can also help countries co-ordinate design and construction activities so the public sector does not ‘flood the market’ with infrastructure projects, creating construction cost inflation. A co-ordinated pipeline can be sequenced in a way that matches the cyclical nature of construction, increasing demand for construction services during downtimes and easing off in high times. It can also help ensure infrastructure is delivered as efficiently as possible, by avoiding any unforeseen negative impacts of one investment over another, which may result in the need to do rework or inhibit the ability for these investments to deliver at their maximum levels of service.
In addition, advanced planning can enable countries to capitalise on synergies that may exist between projects in different sectors. For example, the location of housing developments in relation to transport routes and schools, hospitals, parks and other public facilities can have a significant impact on congestion levels and the ability for people to access the amenities and services that contribute to their overall wellbeing and help avoid unintended spill-over effects like congestion bottlenecks.
Advanced infrastructure planning requires public entities from different line ministries and/or governorates to work together to develop investment proposals that derive greater synergies, efficiencies and pipeline certainty. This ensures that officials can present proposals for the allocation of capital and operational expenditure that funds a co-ordinated project design, construction and maintenance plan. Therefore, in addition to investment decisions being reviewed and approved at ministerial decision-making committees, countries can also co-ordinate their investment decisions at the conception stage, to ensure that synergies and efficiencies are built into the design of investments as early as possible.
Given the significant impact that land use decisions have on citizens and stakeholders, stakeholder engagement is an essential part of land use planning. In fact, decisions about public investments can be significantly improved when those impacted are involved in the decision-making process. It allows for alternatives to be found, assumptions to be tested, and helps with continuing to build trust in government action. Stakeholder engagement can take place with citizens, affected property owners, businesses, representative organisations, the public sector and non-governmental organisations among many others. Given the wide range of potentially affected stakeholders, it is important to consult broadly, ensuring that all relevant impacts are assessed, and that decisions about public investments are – where appropriate – reviewed, amended and open to legal challenge.
Stakeholder engagement can take place at various levels of government – from local communities to the national level – and be applied to most infrastructure decisions. It is particularly important for decisions about large, physical assets to include input from stakeholders, given the immediate impact that roads, water services, electricity infrastructure and public facilities have on people’s wellbeing, the productivity and operations of businesses and the policy decisions of national and sub-national governments. Another important aspect of stakeholder engagement involves land acquisition, where public works providers have recourse to acquire private land holdings. When engaging with affected property owners in particular, it is critical that governments are transparent, fair and timely with making decisions that impact the property and wealth of people and businesses.
But not all stakeholders are equally affected by a particular public investment proposal. Also, different stakeholders will have different information needs. Different stakeholder engagement options exist along a spectrum depending on the extent to which a particular stakeholder is impacted by the proposed public investment. For example, larger, longer-lasting public investments that impact a wide range of people may need a more structured, systematic approach, involving many different methods of gathering information, to accurately capture a wide range of perspectives. A more specific public investment, which might have a direct impact on a small group of individuals, may require more in-depth, targeted engagement. Quality stakeholder engagement, which captures the perspectives of people from across society, will also use communications and engagement tools that appeal to people of a diverse range of ages, cultural backgrounds and gender. Box 2.1 shows a best-practice approach of how to involve a diverse range of stakeholders in strategic decision-making at an early stage of the infrastructure development process.
Box 2.1. Public participation as a tool to inform land use and budgeting decisions, Bulgaria
Copy link to Box 2.1. Public participation as a tool to inform land use and budgeting decisions, BulgariaThe Sofia Municipal Council, which represents Bulgaria’s largest urban centre of approximately 1.2 million people, applied a best-practice approach to involving stakeholders in the development of the city’s long-term strategy and plan, Vision for Sofia 2050. The Municipality organised a series of public discussions, over 400 interdisciplinary meetings, using social media, surveys, a ‘hackathon’, extensive gathering of evidence and data from a wide range of sources, public exhibitions and other initiatives designed to attract as wide a catchment of stakeholders as possible. Over two years, Sofia allocated approximately EUR 750 000 (EGP 40 060 275 (Egyptian pounds)) of the municipality’s annual budget to projects that citizens have voted for.
In all municipalities across Bulgaria, the public must be consulted on all budgets before they can be adopted. While the process for doing this across municipalities may vary, some municipalities invite proposals from citizens and representatives, which informs the composition of the following year’s budget.
In addition, for some projects the findings from public consultation inform environmental impact assessments (EIA), which gives confidence to society that infrastructure providers are operating within environmental parameters while also benefitting infrastructure providers.
A 2023 study on Public Investment in Bulgaria found that several municipalities across Bulgaria are effective at organising public participation processes that reflect the preferences of people from all demographics and age groups. This is achieved by municipalities being as accessible as possible, such as by holding weekly open days and active use of social media.
Advanced land use and financial planning of infrastructure can be supported by two categories of co-ordination relevant to this report:
Vertical co-ordination, which is the co-ordination of investment decisions between national and sub-national government and the private sector
Horizontal co-ordination, which is co-ordination within a level of government (either national or sub-national).
Vertical co-ordination helps to identify and prioritise investment opportunities and bottlenecks, strategically co-ordinate investments, and ensure that adequate resources and capacity are in place to undertake investments. Addressing the multi-dimensional and global challenges of climate change, urbanisation, and demographic pressures, for example, requires partnerships that align policy objectives and investments at all levels. While policymakers often recognise the advantages of vertical co-ordination, it can be difficult to put into practice. Vertical co-ordination can be achieved through dialogue and by ensuring the coherence of infrastructure investment strategies at all levels.
Horizontal co-ordination is required so that investment needs are undertaken at the right scale and avoid fragmentation as infrastructure needs and projects often span jurisdictional boundaries (see Box 2.2 for an example). Fragmentation might occur where similar investments are undertaken by neighbouring jurisdictions, unnecessarily duplicating investment. Infrastructure investment co-ordination and co-operation are difficult, even when actors recognise the need for it. It can be hampered by transaction costs, competitive pressures, resource constraints, differing priorities and fears that the distribution of costs or benefits from co-operation will be one-sided (OECD, 2019[12]); (OECD, 2014[20]).
Box 2.2. Horizontal integration at the sub-national levels of government in Spain
Copy link to Box 2.2. Horizontal integration at the sub-national levels of government in SpainThe regional government of Galicia has encouraged economies of scale by improving the flexibility of voluntary intermunicipal co-ordination arrangements while providing financial incentives to encourage them. National government rewards horizontal co-ordination at the regional level by ensuring that investment projects that involve several municipalities get priority for regional funds. Local co-operation is also being encouraged in the urban mobility plan for public transport, involving the seven largest cities in the region. The regional government also created the Metropolitan Area of Vigo, an association of 14 municipalities. Although the metropolitan area was defined by the regional government, it was based on a history of “light co-operation” among 12 municipalities (out of 14).
2.2.2. Current international best practice
For this reason, it is important that countries have credible, stable and predictable arrangements for making land use and financial decisions within and across levels of government, informed by public participation. Best-practice is comprised of:
The use of long-term land use tools, such as spatial planning, that identify and signal future infrastructure investment needs in a defined geographic area. These tools help deliver as much certainty as possible to communities and developers by clearly stating areas that are available or unavailable for development.
A robust, transparent, accountable and long-term capital budgeting framework, identifying, measuring, regularly updating and reporting infrastructure annual and multi-annual expenditure in relation to both development of new infrastructure, and maintenance, renovation, adaptation to changing needs and decommissioning of existing assets.
Mechanisms to disseminate information on infrastructure projects, including their potential short and long-term effects, and allow for continuous, inclusive, social and open dialogues that are broad-based, involving relevant stakeholders in planning, decision-making and oversight.
Integrating consultation processes that are proportionate to the characteristics of the project (e.g. size, political sensitivity, environmental aspects, and impacted population) and that take account of the overall public interest and of the views of the relevant stakeholders (OECD, 2020[1]).
2.2.3. Current practices in Egypt
Land use planning and stakeholder engagement
With respect to land use in Egypt, master plans are a common tool for co-ordinating land use. The transport, electricity, health and housing sectors all have current master plans. For example, Ministry of Health and Population (MHP) has been preparing a strategy to 2050, which covers all health-related services within a given geographic area. The strategy addresses issues regarding the availability of drinking water and involves input from citizens and other stakeholders on desalination and sludge conversion plans. The strategy is broken down into five-year action plans, with budgets for delivering commitments within the agreed timeframes. In transport, MoT frequently co-ordinates its transport plans with housing and electricity needs when developing master plans. As part of obtaining either loans from international funding parties or funds from MPEDIC, line ministries typically present master plans, which contain details on infrastructure proposals, including timelines and costs.
There are instances of good practices when involving stakeholders in decisions about infrastructure, which could be applied more widely. MPEDIC adopts a country-led multistakeholder engagement framework that includes country platforms and mapping official development assistance (ODA) to the SDGs. In turn, this framework maximises socioeconomic returns from ODA, ensures the alignment of development interventions with national objectives and the SDGs, and enhances the management of development co-operation. This is in accordance with the Global Partnership for Effective Development Cooperation (GPEDC), which prioritises country ownership, a focus on results, inclusive partnerships, and transparency and mutual accountability. MoT has also demonstrated commitment to improving its stakeholder engagement practices by establishing a dedicated unit for community outreach and technical consultation to ensure stakeholder involvement takes place during all project phases. Public consultations, digital feedback channels, and collaboration with local authorities and civil society organisations have led to concrete design improvements in several projects, including in the Delta and Upper Egypt regions.
There are also instances where local infrastructure plans are informed by stakeholders. One example includes the MHP’s desalination and sludge conversion plans, which involve input from citizens and other stakeholders. When developing project proposals, line ministries may also include demand studies, which reflect the views of citizens and other stakeholders. Also when assessing project proposals, as shown in Table 2.2, one of the criteria for projects valued above EGP 500 million (approx. EUR 9 800 000) for sectoral projects and EGP 50 million (approx. EUR 980 000) for local projects are that they demonstrate “… the extent of consultation with affected parties and other stakeholders”.
At the sub-national level, there have been examples of ministries co-ordinating with local stakeholders and service providers to align nationally-provided infrastructure and services with local needs. For example, MHP described holding workshops with local communities to explain the details and benefits of health-related initiatives in their communities. There is also an opportunity for communities to inform the development and design of health-related initiatives, such as infrastructure that improves drinking water to help build a sense of ownership among communities ((n.a.), 2024[14]).
Funding
Many strategic initiatives overseen by a range of ministries are directed from the highest levels of government, such as the ‘’Decent Life’’ programme, a presidential initiative aimed at improving the living standards of citizens (Ministry of Communications and Information Technology, 2023[15]). The initiative, which is considered as the largest development project in Egypt in terms of funding and number of beneficiaries (58% of the population of the Republic), aims to improve the quality of life of citizens in the Egyptian countryside to eliminate development gaps between governorates and between rural and urban areas, thus achieving comprehensive and balanced regional development. "Decent Life” also includes environmental concerns through the "Green Village" initiative, which aims to transform the selected villages into green and sustainable communities. The "Decent Life" initiative won praise from the United Nations and was noted amongst the "Accelerators for Achieving the Goals (July 2020)" and "Best Practices (July 2021)". Most public spending across Egypt happens at the national level: in 2022, expenditures at the sub-national levels, which include governorates, districts and local units, was the equivalent of only around 10 percent of national expenditures (IMF, 2023[16]). At the highest level of government, the co-ordination and alignment of projects is discussed and confirmed at Cabinet. This process is supported by MPEDIC, which co-ordinates projects within infrastructure portfolios, including transport, health and water. MPEDIC also co-ordinates with the Ministry of Finance (MoF) to determine the funding that is available for investment within each ministry’s portfolios.
The General Planning Law No. 18 of 2022 establishes a comprehensive framework for Egypt's development planning, emphasising the alignment of investment allocations with national and sectoral development goals. It mandates the creation of several key planning documents, including EV2030 and the Medium-Term Sustainable Development Strategy (MSDS). EV2030 provides overarching development goals, while the MSDS offers a five-year planning horizon that outlines performance indicators, public and private investment aggregates, and major sector-specific projects. Sectoral plans developed by ministries focus on performance objectives and trends but often lack direct connections between investment outcomes and desired sectoral results. These documents must receive approval from the Supreme Council of Planning and Sustainable Development before being presented to Parliament (IMF, 2024[17]).
The law promotes sustainability, decentralisation, and efficiency by requiring rigorous evaluation of investment projects to prevent inefficiencies or failures. It prioritises output-focused targets and enhances follow-up mechanisms to improve accountability (Ministry of Planning, 2021[18]). The Planning Law reflects Egypt's efforts to modernise its planning processes, align investments with its EV2030 goals, and improve fiscal discipline and public service efficiency.
Funding for infrastructure projects is co-ordinated by the MoF and MPEDIC, in the form of the Annual General Economic and Social Development Plan (AGESDP). MPEDIC applies the Project Selection and Evaluation Criteria (see 2.3.3) when evaluating and prioritising investment proposals for the AGESDP. The AGESDP confirms funding for one year only and includes non-binding projections of major macro-fiscal aggregates and report on the projected debt level over the medium-term. Egypt has also recently introduced a medium-term budgeting framework (MTBF), covering capital and operational expenditure, which should better align infrastructure decisions with the capital expenditure framework and better allow for the long-term visibility of funding for infrastructure. The new Public Financial Management Law was enacted in 2022 and came into effect in the 2024/25 financial year. Supplementary Regulations and Articles for the Unified Public Finance Law, Article 3 integrates the investment decisions proposed by 59 public entities into medium term fiscal plans by requiring those entities to align their financial planning and reporting with the government’s broader fiscal policy. Budgets are approved by Cabinet, who also consider any proposed changes to budget commitments. Based on the new law, a MTBF can be prepared for a period of four years on a three year rolling basis, according to the objectives of the general plan for economic and social development and the strategic objectives outlined in the Fiscal Strategy Paper. In co-ordination with the MoF, the Central Bank, and the relevant ministries, MPEDIC prepares the general plan for economic and social development, while also considering Egypt’s strategic objectives for the budget year and the MTBF. MPEDIC also determines the priorities for implementing these objectives and submitting them to Cabinet for approval. MPEDIC is notified of the expenditure ceiling regarding investments. This process helps prevent unplanned liabilities and helps ensure certainty that infrastructure investments will have the funding needed to proceed. The MTBF also requires public entities to provide information on all financial obligations extending beyond the current fiscal year and fiscal indicators, such as revenues, expenditures, debt levels and economic forecasts, which are reviewed annually by the MoF to decide whether any adjustments to the medium-term plan are needed. Programme-based budgeting, alongside the traditional line-item budgeting, will be fully implemented by the 2027/28 fiscal year (Arab Republic of Egypt, 2022[19]).
To develop the follow-up and performance evaluation system, MPEDIC launched the National Monitoring and Evaluation System "Ada'a" in 2018. Ada’a is an integrated electronic system based on the methodology of programmes and performance, and concerned with following up and evaluating government performance on a quarterly basis, through performance indicators linked to EV2030, and annual plans and budgets. MPEDIC has also recently introduced the Integrated System for Investment Plan Preparation and Monitoring (ISIPPM). All government entities at the national and local levels are required to submit information about their projects to ISIPPM, potentially making this a powerful co0ordination tool. ISIPPM collects information on timeframes, funding sources, amounts and performance indicators over a five-year period. As of January 2024, ISIPPM had collected approximately 75 – 80 percent of total current expenditure on public investment for which line ministries and local governments enter information about their projects. ISIPPM contains details on over 10,000 projects with a total value of EGP 3.8 trillion (EUR 74 billion) and is comprised of three modules: social and development plan preparation; investment funds reallocation; and monitoring and evaluation (IMF, 2023[16])
With respect to sub-national government, national budgets are highly co-ordinated with the budgets of governorates. The public administrations of governorates include heads of service directorates, who are local agents of national line ministries. Each governorate directorate has the autonomy to create their own budgets if they are consistent with the strategies set by their line ministries. Once approved at the local level, each governorate submits its budget to the Ministry of Local Development, MoF and, for capital spending, MPEDIC (IMF, 2023[16]). MPEDIC is aiming to achieve integration between planning systems at the national and local levels through the implementation of the "Performance Excellence Incentives in Public Investment Management at the Local Level" initiative. This initiative aims to motivate governorates to adopt and apply the best international practices in public expenditure management, planning, follow-up and performance evaluation, including granting an additional financial incentive from approved government investments for each governorate, conditional on achieving a set of criteria (participatory planning, preparation of feasibility studies, investment planning, follow-up of the implementation of the investment plan, transparency and disclosure, planning capacity building, self-resource development). There are other examples of more top-down approaches between the national and sub-national levels. For example, Ministry of Housing, Utilities and Urban Communities (MHUUC) develops five-year plans for the water sector and oversees multiple companies that build, operate and maintain water services across Egypt. The Ministry enforces the five-year plans by allocating funds to the companies based on indicators derived from the five-year plans and invests in the capability of water engineers in line with the Ministry’s priorities. This is a good practice that could be applied more widely across Egypt, such as via shared service delivery agreements (see 2.5.3).
2.3. Project selection and prioritisation
Copy link to 2.3. Project selection and prioritisationThis section evaluates Egypt’s current practices when appraising and prioritising infrastructure investment proposals against OECD best practice.
2.3.1. Why is sound project selection and preparation important?
The systematic process of calculating the benefits and costs of policy options and projects is an essential step in the policy process. It helps decision makers have a clear picture of how society would fare under a range of policy options. This is particularly the case for the development and operation of infrastructure, which can be an important lever in delivering public outcomes and can determine the quality of people’s lives, including how and where they live, over many decades.
Project selection methodologies are about organising in a logical and methodical way information about a project and its impacts, while reducing the uncertainty that would otherwise exist around benefit estimates. Without these, decision-makers would be left to rely on their own intuitions and prejudices. Robust project selection methodologies ensure decision-makers can demonstrate that they have thought through the problems they are trying to solve, the benefits they are trying to achieve, the full range of options at their disposal, their plan for managing risks and all possible funding streams. A project selection process, captured in writing, can also provide an important public record to support why a particular decision was made.
2.3.2. Current international best practice
For this reason, it is important that countries have tools that are developed at the centre of government for all line ministries, sub-national governments, State-owned enterprises and other public infrastructure bodies to apply when prioritising infrastructure proposals. These tools should take into account economic, social, fiscal, environmental and climate-related costs and benefits across the entire asset lifecycle (OECD, 2020[1]).
While robust project selection methodologies should be applied to all public investments, they must be right sized for the scale and risk of the project while still meeting all relevant, globally adopted standards. For example, the level of analysis required will be different between a small, local municipal water treatment plant upgrade project with few new environmental or social impacts and a large-scale, multi-regional transport project with complex engineering and environmental risks which affect many stakeholders. A systematic method does not necessarily need to be complex, detailed or expensive. Even a high-level calculation can be logical and methodical.
Countries should use cost benefit analysis (CBA) as the standard tool for assessing project worthiness. CBA can be used to establish the following points in relation to a project proposal:
1. Whether people’s wellbeing, welfare or utility, would be higher under the proposal than the status quo
2. Whether people are willing to pay for a benefit and accept compensation for a cost
3. When the sum of all individuals’ benefits and costs are aggregated, whether the collective social benefit outweighs the social cost
4. Whether beneficiaries can hypothetically compensate the losers from a change, and have some net gains left over, which indicates that the benefits exceed the costs (OECD, 2018[20])
While CBA has traditionally been used to monetise the benefits and costs of public investment proposals, it can also include wider economic benefits that are harder to monetise, such as peoples’ ability to access community services. CBA also commonly involves discounting benefits and costs to an agreed and consistently applied period, known as social discount rates. However, traditional tools and mechanisms to appraise and prioritise infrastructure projects, such as CBA, are often ill-equipped to factor in wider benefits and costs, such as environmental and climate aspects due to the inherent difficulty translating them into monetary values. Moreover, cause-effect relationships are not always straightforward and there can be uncertainty about the social and environmental consequences and effects, such as changing climate conditions and extreme weather events (OECD, 2023[21]). Where costs and benefits are hard to monetise, multi-criteria analysis (MCA) is a method of evaluation that can appraise costs and benefits without strictly relying on monetary valuations (OECD forthcoming).
2.3.3. Current practices in Egypt
When prioritising investments, line ministries are responsible for setting the priorities within their sectors. To obtain funding, MPEDIC requires line ministries to assess all investment proposals for funding by sovereign debts against the Project Selection and Evaluation Criteria. The requirement for line ministries to apply the Criteria is enforced under a Circular issued by MPEDIC for preparation of the AGESDP and a Circular issued by MoF for the preparation of the State budget (IMF, 2023[16]).
The Criteria acts as both a quality assurance and economic evaluation tool, assessing whether the submitter has completed project preparations (e.g. location, description, timeframes, funding arrangements), and whether the project is expected to deliver net economic, social and environmental benefits (e.g. feasibility analysis, the project’s strategic goals, identification of a service gap, interconnections with other projects). It sets out information requirements for submitters to complete, with weightings applied to each criterion (see Table 2.2).
The following sections assess the Criteria according to the three functions it serves: quality assurance, strategic assessment and economic evaluation.
Project Selection and Evaluation Criteria as a quality assurance tool
As a quality assurance tool, the Criteria requires submitters to provide information on several important matters but could be improved with more information requirements. For example, the Criteria confirms important matters such as location, timing, cost estimates, affordability, the availability of land, approval of permits, the confirmation of the contract award and supply order and the completion of environmental impact assessments. However, the Criteria could be strengthened by including criterion that requires submitters to provide engineering plans, project management arrangements, risk management strategies, contracting and sub-contracting arrangements and processes for monitoring and reporting breaches of transparency standards. As an example of a promising and relevant good practice for MPEDIC’s consideration, MoT has established an independent technical committee to review all major projects prior to approval. Project documentation now includes contract models and operation and maintenance strategies. These procedures are already being implemented in smart transport and high-speed rail initiatives. In addition, to support better quality assurance assessment, some of the criterion could be supported with more instruction on the type of information MPEDIC needs to complete its assessment, such as:
1. The existence of a technically acceptable time frame for the project – further explanation of what would constitute a technically acceptable time frame would be helpful, including how “technically acceptable” is defined. For instance, there may be differences in what might be politically acceptable versus what might be achievable from an engineering perspective.
2. The accuracy of estimating the required financial investments (and the sources of financing and their uses for the project) – more direction on what constitutes “accuracy” would help ensure line ministries can provide MPEDIC with information needed to make their assessment.
3. The project considers environmental dimensions – environmental impact assessments can vary in depth and in the variety of considerations they need to make. This criterion would benefit from more details on information required, such as how the proposal performs against existing environmental standards, any proposed measures to mitigate environmental, heritage or cultural impacts, the extent of consultation with affected parties and other stakeholders. This would help agencies better meet the expectations of MPEDIC, and to avoid rework.
The Manual for the Preparation of the AGESDP, developed by MPEDIC in collaboration with the OECD and European Union under the MENA-OECD Governance Programme, contains additional guidance on the information required for high-quality feasibility analysis (Ministry of Planning, Economic Development and International Cooperation, 2024[22]).
Project Selection and Evaluation Criteria as a strategic and economic evaluation tool
The Project Selection and Evaluation Criteria requires submitters to provide important information that is essential for establishing a proposed investment’s net environmental, social and economic benefits. However, to ensure it is consistently applied, it would benefit from being supported with detailed guidance on how each of the relevant criterion should be applied. To assist, it is recommended that MPEDIC require submitters to comply with the methodology for selecting projects as set out under Project Selection (see section 3) when assessing investment proposals against several of the criterion relevant to the strategic assessment and economic evaluation. This will give line ministries more detailed guidance on how to assess strategic alignment and economic, social and environmental benefits, costs and impacts.
In addition, the criterion all have individual weightings, indicating a different level of importance for each. While weightings are appropriate for several of the criterion, others should be treated as ‘’must-haves’’ and therefore should be subject to a yes / no criteria, for which obtaining a ‘’yes’’ is compulsory to proceed. Criterion that would be suitable for a yes / no requirement include: location, timing, cost estimates, affordability, the availability of land, approval of permits, the confirmation of the contract award and supply order and the completion of environmental impact assessments. The additional, new criteria proposed above would also be suitable for a yes / no criteria.
One of the criterion requires project proponents to develop feasibility studies, which are reviewed by the Debt Management Committee on the advice of MPEDIC, outlining all relevant technical, economic, and financial aspects. The Debt Management Committee may either recommend to the ministerial debt committees that they approve an assessment based on the quality of the information and assessment completed or recommend that the responsible line ministry complete more analysis and gather more information. There is no standard approach for completing a feasibility study in Egypt. In practice, feasibility studies may sometimes, but not always, include cost benefit analysis (CBA) and the level of information included varies. For example, MoT has committed to conducting CBAs for all new projects and already provides transportation studies as part of feasibility studies that define numbers of users, beneficiaries, expected revenues and comparisons with alternative modes of transport. MoT also applies economic evaluations to capture economic costs and benefits, which can include measuring time travel savings, vehicle operation cost savings, emissions, employment, access to transport and wider economic development opportunities. Other line ministries also include demand studies, which reflect the views of citizens and other stakeholders on the merits of proposals. Another factor leading to variation in the level of detail can be because feasibility studies are often completed by consultants on behalf of line ministries, often resulting in variation depending on the capabilities of the consultant. This variation in the quality of feasibility studies, often resulting in rework, could occur less often if the information requirements were better specified and internal capabilities better developed to help ensure information standards can be regularly met. Standardising and disseminating the information requirements would assist in this regard, and it is pleasing to note that National Guidelines for Feasibility Studies, supported by capacity-building programmes, are under development. The OECD is pleased to note that modifications are being introduced to ensure that line ministries perform acceptable feasibility studies when providing their plans, which may include technical assistance and capacity building initiatives ((n.a.), 2024[14]). A standardised approach to feasibility studies would also help officials to more easily compare similar investment proposals, such as increasing roading capacity with expanding rail services, or extending the water network with local “off the grid” distributed water services. Comparing investment options is important because public resources are scarce, so decision-makers must allocate public funds to projects that will deliver maximum public benefits.
Some line ministries complement MPEDIC’s criteria with their own sub-criteria. For example, Ministry of Housing, Utilities and Urban Communities (MHUUC) prioritises its investment in water infrastructure based on geographical considerations, allocating 90 percent of their investment to regions equitably, with more targeted investment in villages and satellite areas for the remaining 10 percent. The MHUUC’s water investments are also subject to targets in wastewater and delivering services at lowest cost ((n.a.), 2024[14]).
Privately-financed projects tend to have more in-depth, comprehensive feasibility studies than projects that are not privately financed. This is because for privately-financed projects, third parties such as international donors have the resources and capabilities to undertake in-depth, comprehensive feasibility studies. This potentially gives favour to projects which happen to have a private-finance component but do not necessarily deliver greater net public benefits than a similar public-funded project. This is another reason why agencies should be required to apply the Guidelines: Project Selection, because this will help to standardise the approach to feasibility studies and improve the capability across the public administration.
The Criteria also directs officials to prioritise projects that have either the availability or possibility of providing part or all of the financing for the project from sources other than the public treasury (these sources include grant, self-financing, etc.). Internationally, this criterion is not commonly applied when undertaking value for money or quality assurance assessments because it does not assist with measuring a proposed investment’s economic, social or environmental impact, or technical feasibility. As a result, including this criterion can give favour to proposed projects that happen to have a privately-financed component but do not deliver maximum net social, economic and environmental benefits or may face technical issues. In addition, while privately-funded proposals may appear to be no or low cost for the government, they risk drawing market capacity away from other projects that may generate greater benefits. Secondly, noting that the criterion prioritises proposals only partly funded by private parties, this risks the government having an ongoing financial liability for projects that may have low social returns.
An illustrative example of the project selection process in Egypt comes from the Ministry of Transport’s National Transport Study Master Plan from 2012, delivered in co-operation with the Japanese International Cooperation Agency (JICA). The Transport Study’s purpose is to identify Egypt’s priority transport investment needs to 2027. It begins with identifying multiple future scenarios, including:
“doing nothing”;
minimal additional investment in roads;
multi-modal investment and;
maximising revenue generation.
Based on a needs assessment informed by the Study and earlier transport studies completed by JICA, the Study identifies a preferred scenario that involves additional investment in non-road transport and a gradual introduction of market-based fuel prices. The Study then identifies four “axes”, or strategic corridors, that span large areas of Egypt’s landmass, that are of priority for Egypt’s transport system. The Study then sets out a priority list of new transport connections and supporting infrastructure in road, rail and maritime, determined by a multi-criteria analysis (MCA), which are then packaged into short-, medium- and long-term priority investments. Typically, an MCA might be used to filter a long list of options down to a shorter list that can undergo extensive CBA, so that each proposal’s direct and indirect costs and benefits can be systematically quantified and compared (see section 3.4). However, the Study states that due to their alignment with Egypt’s strategic goals and extensive stakeholder engagement, the top 10 projects identified through the MCA do not require further analysis. However, the top 10 projects include substantial public investments that could represent high-value and potential high-risk investments, so should therefore undergo CBA. To illustrate, the top 10 list includes the Cairo-Ismailia-Port Said Expressway, a port linking the Nile River to a multimodal transport hub and the Mansoura-Damietta Dual Carriageway. The final list of priority investments in the Study includes a mixture of road, rail and maritime investments, as well as initiatives to provide additional capacity and capability across the transport system. For example, the Study’s priority investment is the Egypt Transport Centre, which is intended to collect and monitor data that will inform decision-making across the entire network. The Study also prioritises other non-physical initiatives, such as training for officials in modern traffic management and control systems.
Table 2.2. Evaluation Criteria for Investment Projects (Ministry of Planning, Economic Development and International Cooperation)
Copy link to Table 2.2. Evaluation Criteria for Investment Projects (Ministry of Planning, Economic Development and International Cooperation)|
M |
Evaluation criterion |
Description of the evaluation criterion |
Weighting (%) |
|||
|---|---|---|---|---|---|---|
|
Evaluation criteria for list of projects |
||||||
|
1 |
Determine the project’s precise location |
Assess the extent to which the entity accurately determines the co-ordinates of the project location |
20 |
|||
|
2 |
Assess the project’s feasibility |
This includes assessing the contract, award order and supply order |
25 |
|||
|
3 |
Percentage of implementation and in-kind implementation rate |
Priority is given to projects with completion rates exceeding 50% |
55 |
|||
|
Total |
100 |
|||||
|
Criteria for projects valued under EGP 500 million (approx. EUR 9 800 000) for sectoral projects and EGP 50 million (approx. EUR 980 000) for local projects: |
||||||
|
4 |
A detailed description of the project that clarifies the project’s final outcome |
The extent to which the sub-entity provides an accurate description of the project, identifying its final outcome and the number of beneficiaries. |
8 |
|||
|
5 |
Having a specific goal for the project |
The extent to which the sub-referring entity provides a clear and specific goal(s) resulting directly from the project, consistent with the output parameters. What is meant by a ‘goal’ is the presence of a direct, measurable impact for the project. |
8 |
|||
|
6 |
Accurately determining the co-ordinates of the project location with a picture. |
The extent to which the sub-referring entity determines location co-ordinates accurately. |
4 |
|||
|
7 |
The existence of a technically acceptable time frame for the project. |
The extent to which the start and end dates specified by the sub-referring entity are consistent with the nature of the project and its final output. |
10 |
|||
|
8 |
The accuracy of estimating the required financial investments (and the sources of financing and their uses for the project). |
How accurately the total cost of the project is estimated and its consistency with the nature of the project and the time frame required for implementation. Three levels of measurement: accurate = 10%; somewhat accurate = 5%; inaccurate = 0%. |
10 |
|||
|
9 |
The feasibility study or benchmarking has proven the feasibility of the new project, or a contract/assignment order/supply order has been attached to the already existing project. |
Analysing or reviewing the feasibility study or benchmarking to verify the feasibility of the project, or reviewing the contract/assignment order/supply order in accordance with volume of investments required during the year to confirm the seriousness of the required project, in addition to evidence of the availability of the necessary plot of land to implement the project and the necessary permits and drawings, as proactive steps to begin implementing the project to ensure that investments are made available for it. |
40 |
|||
|
10 |
The extent of the project’s connection and interconnection with other projects. |
The extent of the project’s connection and interlinkage with other projects, especially major development projects, should also be assessed. Three levels of measurement: Not associated with any project = 0 Related to another project = 3 Associated with a major development project = 5 |
10 |
|||
|
11 |
The availability or possibility of providing part or all of the financing for the project from sources other than the public treasury (these sources include grant, self-financing, etc.). |
Priority should be given to projects funded from sources outside the State Treasury and obligations linked to a loan. These sources include grants, self-financing, etc. |
10 |
|||
|
Total |
100 |
|||||
|
Additional criteria for projects valued above EGP 500 million (approx. EUR 9 800 000) for sectoral projects and EGP 50 million (approx. EUR 980 000) for local projects: |
||||||
|
12 |
The project considers environmental dimensions. |
The extent to which projects evaluate their environmental impact. The project is among the projects listed in the environmental sustainability standards manual. Two levels of measurement: If an environmental impact assessment has been completed for the project = 20% If the project is included in the Environment Sustainability Standards Guide = 10% |
20 |
|||
|
13 |
The project provides social returns. |
The number of beneficiaries of the project and whether the project generates social returns. |
10 |
|||
|
14 |
The project covers a service gap. |
Availability and coverage criterion – the extent to which projects are not already available in the region or do not reach all citizens. |
10 |
|||
|
Total |
50 |
|||||
Box 2.3. Guidance on investment analysis in Norway
Copy link to Box 2.3. Guidance on investment analysis in NorwayNorway requires a thorough assessment of the positive and negative impacts of infrastructure projects. Initially introduced to address cost overruns, this requirement applies to all investment projects above a threshold, requiring central government bodies to conduct impact assessments and economic analyses during the development of investment proposals.
Quality assurance stage 1 (KS1) – concept and pre-project phases
CBA is used to rank alternative projects and alternative versions of the same project. CBA guidelines require agencies to account for the wider ramifications of projects using supplementary estimates and analysis, including environmental impacts. It includes an emphasis on environmental and social impacts, land-use implications, and regional development. This evaluation must include a “do-nothing” option (“zero option”) and at least two alternative and conceptually different options. The external reviewers’ role includes reviewing and analysing the following:
Problem description
Needs analysis
Framework conditions for concept selection
Feasibility study
Alternative analysis
Guidelines for the pre-project phase
In addition, projects with estimated costs more than NOK 1 billion (EGP 4.9 billion) (threshold of NOK 300 million (EGP 1.48 billion) for digitalisation projects) are subject to additional scrutiny via a two-stage quality assurance process (see figure below).
Figure 2.1. Stages of Quality Assurance for Major Public Projects
Copy link to Figure 2.1. Stages of Quality Assurance for Major Public Projects
The figure illustrates three phases after the idea phase: concept phase, pre-project phase and implementation phase. Quality assurance 1 (KS1) is between the concept phase and the pre-project phase. Quality assurance 2 (KS2) is between pre-project phase and implementation phase. Investment decision is done after KS2. The process includes input from independent reviewers at KS1 and KS2.
The idea phase includes the earliest work to clarify that there is, or will arise, a problem that may indicate that the public sector should implement measures and consider how the problem could be investigated further. For large projects, the result of the idea phase will be a mandate for the concept phase.
The concept phase, if started, will culminate in a concept selection study (KVU) that will go through external quality assurance (KS1) before the concept can be made by the government. At the pre-project stage, agencies prepare documentation describing how the project will be built with detailed cost estimates, including with an assessment of cost estimate accuracy. It should describe how the project will control costs and achieve the goals set,and consider what kind of contracts give potential suppliers the right incentives to deliver what the project needs. Management documentation and cost estimates must be quality-assured through KS2.
Quality assurance stage 2 (KS2) - pre-project and implementation phases
The purpose of the pre-project phase is to provide a sufficient basis for assessing the project's uncertainty, recommending a cost framework and providing guidelines for the subsequent management of the project. For projects that have been through KS1, guidelines from the choice of concept must be followed up and reflected in the decision-making basis.
A central management document must be available that will provide an overview of all key aspects of the project, in a way that provides guidance and clarification for all internal actors, the client and relevant external stakeholders. The document shall contain a description of:
General framework (purpose, requirements and main conclusion, project goals, critical success factors, framework conditions, interfaces)
Project strategy (strategy for managing uncertainty, implementation strategy, contract strategy, organisation and responsibilities)
Project management basis (scope of work, including change management, work break structure (WBS), cost estimate, budget and investment plan, benefit realization plan, schedule and internal quality assurance).
The detailing of the central management document must be adapted to the project's distinctive character, risk and materiality. Guidelines are given for individual elements related to investment decisions.
After completion of the pre-project, the basic documentation must go through external quality assurance before an investment decision can be submitted to the Parliament. The Ministry of Finance and the responsible ministry(s) are joint clients for quality assurance.
After the final KS2 report has been completed, the matter will be presented to the government with a recommendation for an investment decision or a plan for further follow-up of the project. The Government will decide whether the matter will be submitted to Parliament, which will determine the project's cost framework.
If, during the pre-project phase, it becomes relevant to consider early involvement of the contractor, this can be dealt with before the other parts of the pre-project. A contract strategy that considers this issue can then be quality assured separately.
Box 2.4. Bulgaria’s project appraisal methodology
Copy link to Box 2.4. Bulgaria’s project appraisal methodologyA 2023 OECD study on public investment in Bulgaria found that project selection tools such as cost-benefit analysis (CBA) and multi-criteria analysis (MCA) were being applied inconsistently at the national and local levels because ministries and municipalities developed their own project selection criteria and methods. This meant decision-makers were not always able to consistently compare investment proposals across portfolios to ensure they were allocating resources to the highest priorities across society.
In response to this challenge, and based on previous recommendations made by the OECD, on 1 August 2024, Bulgaria established the Strategic Planning and Management of Capital Investments, State Participation and Concessions Directorate within the Ministry of Finance (MoF). The new directorate will provide line ministries with a common methodology for assessing the affordability, value for money and monitoring the performance of public investments. The methodology will be designed to comply with requirements set by the European Commission. The common methodology was introduced with interim measures in August 2024, in time for the next budget cycle. The interim methodology will provide guidance for line ministries to adequately prepare and budget for projects before they are submitted to the MoF. The interim measures will also encourage line ministries to align KPIs with strategic goals and objectives before projects become part of capital investment programmes. Once the methodology is published, the MoF will conduct training for line ministry staff to support its implementation.
Source: (OECD, 2023[10])
Egypt’s Environmental Sustainability Standards Guide, “Strategic Framework for Green Recovery” (Ministry of Planning, Economic Development and International Cooperation, 2021[26]), outlines environmental considerations when planning and designing infrastructure, including certain environmental factors that must be considered when completing environmental impact assessments, a requirement for projects to then be included in sustainable development plans under the General Planning Law 18. The Guide sets out environmental considerations for infrastructure developments during the planning, funding, design, implementation and operations phases. For example, regarding the planning phase, the Guide requires infrastructure located near bodies of water to undergo an assessment against an environmental sensitivity index. The Guide also requires infrastructure developers to report on projected emissions, pollutants and other environmental impacts. For the funding phase, the Guide “encourages the implementation” of green outcomes by giving priority to green projects and phasing-out non-green infrastructure. For the design, implementation and operations phases, the Guide provides advice on a wide range of efficient building and infrastructure management practices. The Guide also contains strategic objectives and KPIs that appear to broadly align with EV2030 in numerous sectors relevant to infrastructure, including water resources and irrigation, energy, transportation, housing, education and local development. For each of these sectors, the Guide also lists projects that have been prioritised for funding. Finally, the Guide also refers to other relevant building and efficiency codes and regulations.
The Guide also lists the decisions taken by Government that require infrastructure developers to incorporate green considerations into their plans and designs. For example, the Guide states that Law No 182 on regulating contracts concluded by public entities stipulates that Egypt’s “economic, social, and environmental policies, reported by the Council of Ministers, shall be observed in all contracts ….” In addition, the Guide states that the Resolution of the Cabinet Meeting No 98 (2020) directs ministries to “… focus on the transition towards a green economy, while observing the sustainability dimensions in development projects, within the framework of determinants developed by the Ministries of Planning and Environment’’ (Ministry of Planning, Economic Development and International Cooperation, 2021[26]).
2.4. Public procurement and public-private partnerships
Copy link to 2.4. Public procurement and public-private partnershipsThis section evaluates Egypt’s current practices against OECD best practice when procuring infrastructure investments, including the application of the public-private partnership (PPP) delivery model.
2.4.1. Why is sound public procurement important?
Public procurement is an enabler for well-developed infrastructure. Adopting a best-practice approach to public procurement will increase the opportunity to attract suppliers, domestic and foreign, needed for investment and construction of infrastructure. Ensuring fair and equitable treatment for potential suppliers is necessary for attracting the needed consultants and entrepreneurs, and where necessary, external finance (International Monetary Fund, 2024[27]).
Procurement is also increasingly being used to pursue wider public policy goals, such as addressing climate change. Indeed, public procurement plays a significant role in helping countries deliver the low emissions infrastructure needed to meet their climate goals. As a major purchaser of public goods and services, representing on average 12.7% of GDP in 2023 (OECD, 2025[28]), governments can use their scale to send investment signals so the private sector can have sufficient certainty to invest in the goods, supplies, labour and skills needed for low emissions infrastructure. Due to their large scale, governments can also stimulate markets in new technologies that will be needed for countries to meet their climate goals. This could either include the procurement of outputs, such as rail lines or cycling facilities that may help incentivise a reduction in emissions, or inputs, such as concrete or steel that may include embodied carbon emissions. Furthermore, the consumption patterns of government can also influence market investment in low emissions infrastructure technologies. For the deployment of low emissions infrastructure, governments have significant leverage to incentivise the use of low emissions inputs and green technologies through public procurement contracts. Countries can also ensure that procured infrastructure is built according to the latest energy efficiency and zero carbon standards, and incorporates clean technologies (Addison et al., 2024[29]). Box 2.5 shows an example from Norway of how to incorporate green considerations into the procurement process.
Finally, understanding when best to use and apply the procedures and contract models described above requires high professional standards, knowledge and the regular updating of procurement tools. It is important that procurement officials know when best to use these contract models and procedures. Given the important role that procurement officials play within a procuring entity, countries can attract and retain high quality procurement officials by providing them with competitive remuneration packages and recognising the procurement profession as an influential, strategic function within an organisation (OECD, 2023[30]). In addition, countries wanting to develop their capacity can also identify their long-term procurement needs according to their infrastructure pipeline.
To uphold integrity standards, encourage competition and achieve broader public policy goals, countries can follow the steps described in the following section.
Box 2.5. Using contracts to achieve CO2 emission goals
Copy link to Box 2.5. Using contracts to achieve CO2 emission goalsNye Veier AS (NV) a state-owned company under the Minister of Transport in Norway, responsible for 12% of the national road system. One of the five goals from the Minister of Transport is to reduce the effect infrastructure has on climate and environment. This goal is also one of the goals for NV, and therefore they have included a maximum baseline for CO2 emissions in each infrastructure project that are sent to the market for tendering.
NV has also set requirements in the contract to reduce emissions by an agreed amount against a previous project, such as 20%, although this varies from project to project. The suppliers must agree on these requirements when they price their bids. The suppliers are also asked to deliver lower than the requirements (in this example 20% under the baseline) as part of the evaluation of the tenders. For most of the contracts NV have done over the past 8 years, they have managed to select suppliers that are able to deliver more than the requirements without increasing the price. In the last 20 competitions from NV on large infrastructure projects, 80% of the selected bids were both best on price and reducing CO2 emission. The other 20% had the second-best price in the competition (source NV).
The example above shows that there is possible to reduce the CO2 emission and still have competitive prices.
Source: (NyeVeier, n.d.[31])
Box 2.6. Philippines Value Engineering
Copy link to Box 2.6. Philippines Value EngineeringThe Philippines has introduced the Value Analysis Handbook to apply value engineering techniques that help reduce costs and improve outcomes. The handbook draws on international best practice from the United Kingdom, the United States, Japan, South Korea, Chinese Taipei and Malaysia. Value engineering has been applied to several major infrastructure projects in the Philippines, such as the extension of the Light Rail Transit Line 1 in Manila to the Province of Cavite and the ongoing Cebu Bus Rapid Transit (BRT) Project. Around the world, value engineering has helped countries reduce cost, improve their investment proposals and reduce the risk of delays. For example, in the United Kingdom, government departments saved an estimated GBP 23 billion in 2004 because of applying value management. In the United States, value engineering analysis completed during the construction phase saved the State Departments of Transportation (DOT) USD 61 million (EGP 3.078 million) in 2002. In Japan, the Ministry of Land, Infrastructure and Transportation found in 2003 that a value engineering-type inspection of the designs of public work projects done prior to their construction could lead to a 10 percent cost savings. In a South Korea tollway project, a value engineering study revealed that the cost of the project could be reduced by as much as 50 percent without decreasing the project's benefits and functionality.
The Handbook describes 6 phases:
1. Information – review of project design, objectives and preliminary cost information
2. Function analysis – define the project functions to determine which need improvement, elimination or creation to meet the project’s goals
3. Creative – identify proposals that would perform to the project’s functionality
4. Evaluation – a structured evaluation process to select ideas that offer potential for value improvement while delivering the project’s functions and considering performance requirements and resource limits
5. Development – develop preferred proposal(s) with a sufficient level of documentation to allow decision-makers to determine whether the proposal should be implemented
6. Presentation – reporting of the successful proposal, conveying its adequacy to the decision-making body.
In the Philippines, value engineering has been applied as part of feasibility analysis. The Handbook recommends that value engineering analysis takes place when the planning process is complete but the contract for full design of the project has not yet been awarded to a consultant or the in-house project design team has not yet begun its work. In addition to taking place before the contract is awarded, it can also take place during construction to ensure maximum value is being derived from the contractor.
Choose the most suitable contract model
There are several contract models that countries can use. A contract model determines the responsibility and risks between the client (buyer) and the supplier (contractor). There are international contract standards that can be used, like FIDIC (International Federation of Consulting Engineers), but use of national developed contracts is also common in OECD countries (ex. Norway and Sweden). It is important that countries provide precise and consistent tender documentation, standardised where possible, as this is a vital part of ensuring transparent competition.
Examples of contract models, including when they are best applied, and their strengths and weaknesses are outlined in Table 2.3The selection of contract models should be underpinned by a robust legal framework that guides the selection of the appropriate contract model (see Box 2.7).
Table 2.3. Common contract models
Copy link to Table 2.3. Common contract models|
Contract models |
Description |
Pros and cons |
Price models |
Responsible for detailed design |
|---|---|---|---|---|
|
Design & Bid & Build (DBB) |
Buyer develops the design of the project in detail before going to tender. The design could be done inhouse with own employed capacity or be done by contracted design consultants. |
Gives you the opportunity to decide the technical design of your project. The downside is the lack of innovation from the suppliers. |
Unit prices |
Buyer |
|
Design & Build (DB) |
Project design developed by supplier as part of the contract deliveries. |
It gives you the opportunity to get innovative solutions from the suppliers, but at the same time you lose influence if you would like a specific solution. |
Fixed price and unit prices where risk are clients |
Supplier |
|
Early Contracting Involvement (ECI) |
Design developed together between buyer and selected suppliers. Collaborative approach to the project |
Gives you the possibility to engage with the supplier at an early stage of the project to find the best solutions for the project. The downside is that you don't know the outcome, herby the price |
Target price or fixed price |
Supplier and buyer |
|
Integrated project delivery (IPD) |
Similar to ECI. From US. |
Same as ECI |
Target price or fixed price |
Supplier and buyer |
|
Public-Private Partnerships (PPP) |
Design developed by supplier as part of the contract. Finance and maintenance (and sometimes operation) for several years are part of the contract. |
Give you the possibility to engage early with the supplier and let them come up with the solutions. Supplier will be responsible, but you have to be willing to pay a risk and management premium for that responsibility. |
Fixed price |
Supplier |
Source: Authors
Box 2.7. Example of a robust legal framework for public procurement
Copy link to Box 2.7. Example of a robust legal framework for public procurementThe European Union (EU) legal framework Directive 2014/24/EU on public procurement sets different requirements for two thresholds: works contracts (above EUR 5.5 million or EGP 315 million) and public supply and service contracts (above EUR 144 000 or EGP 8.2 million). The EU Public Procurement Directive refers to the five different procedures listed below. Each procedure has a set of rules to make sure that the tenderers know how the competition will be executed up to selection of the supplier. This is similar to when you play a football match. Each of the 22 players on the field must understand and follow the rules of the game, and the referee monitor and intervene during the game in the same way the legal institute should do in public procurement.
Source: (European Union, 2023[33])
Within a large infrastructure project there would most likely be several contract models. The most common contract models are design and build and bid (DBB) and design and build (DB). In a DBB contract, the entrepreneur is asked to build according to the design, and the bid must be delivered with unit prices. If there is a need for a change in the design after starting building, or the conditions in the design are not according to the design, the buyer is normally responsible for that change and the cost related to that change. The competition is often based on low price and tactical prices. For the buyer, a DBB needs to be followed up in detail to make sure the delivery is according to the design. To do the follow up on the contracts demand, the buyer needs to decide if they have the needed capacity inhouse or need to buy that capacity form the market.
In a DB contract the bidder is asked to take responsibility for the design, risk and delivery of the project according to functional requirements. The bid will therefore be delivered in a lumpsum for most of the project, such as a lump sum price for one complete bridge or tunnel as part of an infrastructure programme, instead of unit prices for inputs like steel or concrete. The competition is often based on a combination of price and other values like time and quality. This is where best value for money is used as an evaluation model. Since the bidder in a DB is responsible for the final design of a project, it is also responsible for the lifecycle cost of the project. Therefore, lifecycle costs should also be evaluated before selecting the winner of the competition. Since the design is not yet done before the preferred bidder is selected, the buyer needs to set requirements in the contract to make sure the design will meet suitable operations and maintenance standards. However, unlike public-private partnerships (PPP) contracts, operations and maintenance are normally not part of the contract. After selecting the contract model, the buyer must decide the proper procedure for the tendering.
Another procurement option is PPP, a procurement model similar to DB, but also includes operation and maintenance for several years and financing the project with the right to collect payment from the government during the operation and maintenance period. While in DB the payment is made during the building period, for PPPs payment is mostly made during the operations and maintenance phase. PPP is not about selecting the best project or risk management. These roles will typically be in the domain of the public sector and set the broad requirements to which the project should be delivered.
It is important to note that private participation in infrastructure does not allow the public sector to increase the quantity of investment in infrastructure. Under the PPP model, private participation involves borrowing (financing), which is distinct from the term repaying what was borrowed (funding). This means private finance solutions, such as PPPs, do not create funding options.
In several advanced OECD countries, negative experiences with PPPs have undermined trust in the model. For instance, several major projects have experienced uncertainties, leading to inefficient risk pricing and either excessive contingencies or significant losses for the contractor. A major cause for this is because PPP investors require insulation from construction risk, which has to be provided through fixed-price, fixed-date contracts. This has resulted in general trends across advanced economies showing a higher frequency of market exits and loss of bidder appetite. Evidence suggests that in the case of capital-intensive infrastructure, this inefficiency can be offset, and value for money achieved, where there is market competition incentivising operators to minimise costs and maximise the quality of services. An infrastructure example includes seaports, which compete for business within a catchment area (Swedish Transport Administration, 2020[34]) (OECD, 2021[35])
The use of more sophisticated models like early contracting involvement (ECI) and integrated project delivery (IPD) are not recommended to use before the common models like DBB and DB has been used because they require a deeper understanding and engagement from both suppliers and buyers before they are used in a large scale (or large projects). Experience indicates that going from DBB and DB to ECI and IPD requires time and willingness to try and fail. The OECD therefore recommends starting with DBB and DB, and also PPP (like DB) before starting ECI or IPD projects.
Choosing the most suitable approach for selecting a bidder
Once the contract model is selected, there are different procedures that procuring entities can choose for negotiating with and selecting a preferred bidder. The best-practice procedures are summarised in Table 2.4 below.
Table 2.4. Procurement procedures in EU
Copy link to Table 2.4. Procurement procedures in EU|
Procedure |
Suitable for type of projects |
Steps towards selecting supplier |
|---|---|---|
|
Open Procedure |
Simple projects where the risks are clarified and price is the most important selection criteria. This used to be one of the most common procedures in the EU due to previous restrictions on negotiated procedure. |
Bidders must submit their tender with all documents, including with a response to the qualification criteria and the final prices. Negotiation or major changes in the submitted tender are not allowed. |
|
Restricted procedure |
Simple projects where the risks are clarified, and price is the most important selection criteria. This procedure is similar to an open procedure, except that the prequalification criteria is not available to bidders before they submit their tenders. |
First, the bidder submits their qualification documents, and then they are either invited to submit a price bid (and the rest of the required documents) or they may be rejected based on the qualification and selection criteria. The advantage of this procedure is the possibility to reduce the number of bids to be evaluated. Normally only 3 to 5 bidders are invited to submit a price bid. |
|
Competitive procedure with negotiation |
Large and more complex projects where the risks need to be clarified during the tendering process. This procedure has become more common in infrastructure projects in recent years since it allows the buyer to clarify the risks with each supplier, and also give the bidders the opportunity to change their bids. This procedure enables bidders to adjust their bids based on lessons or the availability of new information. |
Qualification in the same way as restricted procedure. The next step is to submit a bid if selected. The third step involves clarification and negotiation between the buyer and bidder, followed by submitting a new bid. This could involve multiple negotiations. |
|
Competitive dialogue |
Suitable for complex projects where the requirements are difficult to outline in the tender documents, and there is a need for a dialogue with potential bidders before the requirements are set. |
Several steps. See more information in EU Directive article 30. |
|
Innovation partnership |
Suitable for the procurement of innovative products, services or works that cannot be currently met by the market. |
Several steps. See more information in EU Directive article 31. |
2.4.2. Current international best practice
High-performing public procurement systems include the following features (OECD, 2015[37]):
Transparent online tender systems. Best-practice examples include Korea’s online e-procurement system KONEPS (see Box 2.10) and the European Union’s Tenders Electronic Daily (European Union, n.d.[38]). In both cases the tenders from public governance are made available for all potential suppliers and follows a systematic set of rules and regulations.
Have high standards of integrity. Public procurement involves spending taxpayers’ money, and therefore it is necessary to secure high trust in public governance. Setting high standards of integrity throughout the entire public procurement process ensures those involved in the procurement process and selection of suppliers do not have any conflicts of interest, such as by being connected to the supplier directly or indirectly in a manner that may result in the awarder receiving, potentially receiving or being perceived to receive, a benefit from the award.
Precise, clear and standardised (where possible) tender documents. The use of standard balanced contract documents, when possible, helps procurement officials manage risk while encouraging broad participation from competitors who are familiar with the contract standards. One example is from the Swedish Boverket who provides several standard agreements for different types of contracts in Sweden, including DBB and DB contracts. Another example is from FIDIC who provide well known international standard contracts for different types of contract models (like DBB and DB among others). Both examples are contract standards that have emerged over many years and has been adjusted during those years based on experience and legal practice.
Educate and reward procurement officials. By investing time and resources that upskill and provide adequate remuneration for public procurement officials, governments are more likely to achieve their goals.
Choose the right contract model(s) for each project. As described above, this is vital for ensuring that responsibilities and risks for infrastructure delivery are allocated to either of the two parties, the client (buyer) and the supplier (contractor), who are best placed to manage them.
Box 2.8. MAPS supplementary professionalisation module - Peru
Copy link to Box 2.8. MAPS supplementary professionalisation module - PeruPeru was the first country that used a MAPS (Methodology for Assessing Procurement Systems) supplementary professionalisation module to evaluate its system of professionalisation in 2019. The Module has been designed to be used as a stand-alone assessment tool, which relies on the results of a comprehensive pre-assessment of a country's public procurement system using the MAPS core methodology. The results of that basic assessment should be used to ensure a proper understanding of the context and to facilitate a targeted application of this module.
The MAPS Professionalisation Module is organised under four pillars:
Pillar I: Legal, regulatory and policy framework;
Pillar II: Institutional framework and management capacity;
Pillar III: Procurement operations and market practices; and,
Pillar IV: Accountability, integrity and transparency.
The module has 21 sub-indicators, of which Peru attained “comply with international best practices” for 3 sub-indicators, “minor gap” for 13 sub-indicators, “and “major gap” for 5 sub-indicators. The 5 sub-indicators with major gaps were (i) availability of sufficient financial resources, (ii) existence of career plan for public procurement within civil service, (iii) career plan is competitive compared with the rest of civil service, (iv) existence of mechanisms to support integrity in public procurement, and (v) implementation of mechanisms to sanction officials for anti-ethical behaviour.
The results found that almost 40% out of Peru’s 4 793 public procurement officials evaluated needed specific knowledge to be strengthened to carry out their functions. Also only 9.62% of participants had enough knowledge to carry out their functions in an optimal way. The results showed that capabilities were stronger at the national than subnational level. The assessment also highlighted that professionalisation in Peru was needed at the beginning of the career: almost 50% of public procurement staff with less than one year of experience did not meet the criteria.
2.4.3. Current practices in Egypt
The following section describes how Egypt’s current application of traditional public procurement and public-private partnerships (PPP) compare with OECD best practices.
Public procurement
Egypt’s procurement processes contain many of the features common to competitive tendering, including a pre-qualification screening of bidders and the releasing to the market of a proposal’s technical and financial specifications, after which a successful bidder is invited by the procuring entity to commit. In the transport sector, MoT applies a pre-qualification matrix during the tender phase to only admit higher quality bidders. In addition, preference is given to bidders who can deliver wider benefits, such as technological innovation, skills development and economic development opportunities.
Many improvements were introduced under a new Public Procurement Law (PPL) and supporting regulations, passed in 2018 and 2019 respectively, which bring Egypt into closer alignment with international best practice (IMF, 2023[16]). There are also steps to enable more open, competitive, neutral and transparent procurement, including the simplification of processes, guidance on the design of tender documents, platforms for dialogue with suppliers, mandatory market analysis, e-procurement and the allowance of bids from firms outside Egypt. In addition to changes under the PPL, MPEDIC’s online Hub for Advisory, Finance and Investment for Enterprises helps to improve visibility of procurement opportunities by publishing tenders in Egypt and beyond and promoting other opportunities for market engagement, such as upcoming trade and investment forums and other networking opportunities (Ministry of Planning, Economic Development and International Cooperation, Visited 2024[40]). The forward pipeline of future projects is updated and shared at the beginning of each financial year. In transport, MoT considers the market’s capacity to deliver on the pipeline during its formulation. In response to the PPL, MoT is actively modernising its procurement system. A variety of tendering methods are now applied, including competitive bidding, early negotiations, and competitive dialogue for complex projects. A comprehensive procurement manual has been issued to integrate environmental and social criteria and promote performance-based contracts, particularly in maintenance and asset management services.
Box 2.9. Hub for Advisory, Finance and Investment for Enterprises
Copy link to Box 2.9. Hub for Advisory, Finance and Investment for EnterprisesThe Hub for Advisory, Finance & Investment for Enterprises (HAFIZ) is a gateway platform operated by Egypt’s MPEDIC. It is dedicated to enhancing the role of the private sector and promoting partnerships between the private sector and development partners. They provide business and tender application support, offer financial assistance and foster international partnerships.
The aim of HAZIF was to help Egypt's private sector improve its access to the resources and support offered by international development partners, thereby improving the growth and overall economic development of Egypt's firms. HAZIF was also designed to streamline application processes, improve the availability of information and overcome language barriers.
HAFIZ supports a range of business, from start-ups to established companies and partners include the World Bank, the European Investment Bank, and the US Trade and Development Agency.
Also under the PPL, a public portal is being developed under the General Authority of Government Services to promote procurement opportunities, award decisions and monitor procurement plans (Government Contracting System, n.d.[43]) The portal is expected to collect information on a project’s benefits and costs, the number of firms at the expression of interest stage, the chosen delivery model, pre-selection criteria, the approach to bidder selection and the results of bid evaluation and total project cost. Procuring entities are also required to assess risks associated with public procurement that cover the full lifecycle. Also, when structuring procurement contracts, officials will determine the number and composition of contracts needed depending on the characteristics of the project, on a case-by-case basis. Once the contract scope is agreed, the contract terms are negotiated between the procuring authority and the supplier, also on a case-by-case basis.
Infrastructure providers within different sectors often co-ordinate so to not risk over-heating the market, identifying any potential market impacts in their plans. There is also a permanent higher committee for investment, affiliated to the Presidency of the Council of Ministers, which partly oversees market capacity impacts. Single-source procurement, which is when a product or service is supplied by only one supplier, is possible, but must be formally justified and disclosed.
Box 2.10 shows a best-practice approach to e-procurement from Korea that has helped to improve the efficiency, effectiveness and integrity of public procurement.
Box 2.10. Korea’s ON-line E-Procurement System
Copy link to Box 2.10. Korea’s ON-line E-Procurement SystemThe Korea ON-line E-Procurement System (KONEPS) is an integrated e-procurement system which contributes substantially to the efficiency, effectiveness and integrity of public procurement in Korea. It includes tools that reduce burden on suppliers by eliminating the need to submit duplicative certificates and other records, helping to ensure that the extent and complexity of information required in tender documentation and the time allotted for suppliers to respond is proportionate to the size and complexity of the procurement. Companies that previously had to register individually for each public procurement bid can now register only once with the Public Procurement Service and participate in all tenders from central government entities, local government entities, and public enterprises. Through the shared use of government, KONEPS enabled the elimination of paper submission of business registration certificate and tax payment certificate. For public construction tenders, bidders become no longer required to submit certificates on past experiences, as such information was electronically collected through data interchange with construction industry associations.
According to a study conducted by Hanyang University in 2009, annual transaction cost savings enabled through KONEPS amounts to KRW 8 trillion. Of this, the saving of KRW 1.4 trillion (approximately EGP 46.8 billion) occurs in the public sector, from reduced labour and process time due to the streamlined and digitalised work process. KRW 6.6 trillion (approximately EGP 220.8 billion) was saved in the private sector, mainly from reduced costs for visiting public entities and obtaining required certificates and proof documents. Reduced labour and time from streamlined and standardised process also contributed to the savings.
However, Egypt could take steps to make these measures more widespread and binding. Many of these pro-competition measures can be bypassed by a supreme ministerial committee reserving the right to approve a direct award. In addition, one notable exemption from the PPL is the Sovereign Fund of Egypt (SFE), seeded by the state yet run by private sector professionals. SFE has been active since it began operations in late 2019 having executed on 15+ investments in addition to its role in attracting foreign capital into SOEs. SFE currently has Assets under Management in excess of EGP 100bn and a real estate portfolio that spans over 570,000 square kilometres in built up area, in addition to a partnership with the National Egyptian Railway Industries Company to upgrade the rolling stock in the East Port Said Industrial Area (National Egyptian Railway Industries Company, 2024[46]) and investments in schools.
Secondary policy objectives are also pursued through tender documentation, including the promotion of innovation, responsible business conduct, gender equality, environmental protection and social objectives. While support is provided to procurement officials so they can pursue these objectives, there is no standard method for measuring whether these objectives are being achieved ((n.a.), 2024[14]).
Like several countries, Egypt does not adhere to a specific international procurement framework. Occasionally, international frameworks are adhered to, such as for dollar-funded projects funded by development partners via grant or loan instruments.
Public-private Partnerships (PPP)
Egypt uses availability-based (taxpayer funded) and demand based (user funded) PPPs, as well as leveraging private capital for project development, construction and operation. The Government has recently updated its PPP regime, based on the system used in the United Kingdom. PPP tender documents contain information on dates, bid instructions and evaluation criteria but typically do not include technical, financial or legal information, as this information is set out in a draft contract that can be reviewed by prospective bidders. Egypt implemented this approach as a way of improving the design of PPP contracts and avoiding the private sector having to price risks. Prospective bidders can propose changes to the draft contract, which can be approved at the discretion of the procuring entity. The lessons from varying the contract conditions are applied to future PPP tender processes. PPP tender processes are also supported by one-on-one meetings between the procuring entities and prospective bidders, which officials say has proven to be an effective way to enable meaningful dialogue without the pressure of having other bidders present. Finally, PPP tender bids are evaluated by a committee according to article 29 of the PPP Law no. 67 for the year 2010 ((n.a.), 2024[14]). Egypt’s PPP Unit, housed within the MoF, assesses all PPP proposals that fulfil the PPP law criteria to establish whether they are suitable to be implemented through the PPP regime. Final decisions are made by a joint committee of MPEDIC, the PPP Unit and officials from relevant ministries such as MoF, Ministry of Local Development, MoT and MHUUC. PPP projects can be tendered with the approval of the Supreme Committee for PPP Affairs, chaired by the Prime Minister. When determining this, officials apply a public sector comparator (PSC) and compare the net present value under a fully-government provided delivery model against a PPP, factoring in design, construction, maintenance and replacement costs. Officials also consider affordability, size, bankability, market capacity and willingness, project structure and the allocation of risk. When assessing value for money, the Joint Committee considers the value of the outcomes that the private party is offering. For instance, if the public sector offers a lower price but the private sector demonstrates a superior ability to deliver the project successfully at a higher cost, the latter may be chosen for its better overall value. A recent and prominent example is the 6th of October Dry Port, which has a total value of EUR 60.9 million (EGP 3,414 million), The project is Egypt’s first in-land dry port and first transport sector PPP in Egypt and will be implemented by the October Dry Port Company, a joint stock company established to finance the design, development, construction and operation and maintenance the project under a build-operate-transfer structure. The project is funded with a loan from the European Bank for Reconstruction and Development (EBRD) of up to EUR 25 million (approx. EGP 1,402 million). The EBRD is also proposed to provide an additional commitment of up to EUR 3.6 million (EGP 206.5 million to finance additional costs related to the Project (Enterprise, 2021[47]); (European Bank for Reconstruction and Development, 2021[48]).
PPP debts in Egypt sit off balance sheet. For government -funded PPPs, the private party is given a guarantee of payment from the government, which presents as a contingent liability. Debts from user-funded PPPs do not present as contingent liabilities because the private parties receive payments directly from users, rather than the government.
Sovereign guarantees for PPP projects are issued for the projects where the Government is the off-taker of the services provided by the private sector (i.e. government pays projects). Sovereign guarantees do not apply to PPPs where the private sector is licensed to deliver the services to the beneficiary and collect the service fees (i.e. users pay projects). Typically around the world, sovereign guarantees require that the sovereign is ultimately responsible for covering its financial cost, regardless of what gives cause to the guarantee being called upon (Pereira Dos Santos, 2018[49]). To date, the MoF has reported that no guarantees have been called upon (OECD, 2025[50]). Guarantees can be relevant risk-mitigation instruments for infrastructure investments, as they can be tailored to specific project risks, such as construction period risk or the non-payment by a sovereign guarantor of the project (Garbacz, Vilalta and Moller, 2021[51]). However, while there is no suggestion this has occurred in Egypt, internationally there have been examples of guarantees effectively ceding control and risk of project outcomes to the government by making government responsible for providing funding in the event of a wide range of negative outcomes (IPFA, 2020[52]).
This is commonly mitigated by ensuring sovereign guarantees are better allocated by assessing the risk of project default and determining the need for government guarantees for each project, instead of applying blanket sovereign guarantees. This approach would also have other benefits, such as helping to mitigate the fiscal pressure posed by contingent liabilities on the public budget and create greater capacity for additional PPP projects (OECD, 2025[50]).
2.5. Infrastructure operations and maintenance
Copy link to 2.5. Infrastructure operations and maintenanceInfrastructure operations and maintenance pertains to the functioning of infrastructure during its operational life. This excludes the period that covers its planning, design and construction. Key considerations during the operational life of infrastructure include maintenance, renewals, upgrades, ongoing levels of service, contract management and governance arrangements for overseeing the ongoing management of assets and networks.
This section focuses on Egypt’s capacity to maintain and operate infrastructure networks and assets to maximise efficiency and effectiveness, as compared with OECD best practice.
2.5.1. Why are robust infrastructure operations and maintenance practices important?
Infrastructure assets and networks are long-lived investments, which mean decisions that take place at all stages of the investment lifecycle will have a significant impact on whether a project is affordable and delivers benefits to society over time. All countries face fiscal constraints, which makes it important that countries make efficient investment choices. Data about assets can help countries prolong the life of existing assets and defer new capital investment while continuing to provide services that people need. Additionally, countries need to build, maintain and renew infrastructure to withstand the risks both for today and tomorrow. This will be particularly relevant to infrastructure exposed to risks that are incrementally increasing, such as the effects of climate change. Consequently, the use of data and information will be vital for ensuring infrastructure can help to preserve a countries’ way of life.
Monitoring the whole-of-life performance of assets and networks is crucial to optimise life-cycle costs and ensure asset quality. Monitoring asset performance during the operation phase measures the asset’s condition, use and functionality, and can help inform operators of maintenance requirements for effective, safe and accessible public services. Without a clear view of the age profile and quality of the asset base, a country is unable to budget appropriately for maintenance funding.
In addition, new technologies and data science encompassing earth observation, remote sensing, big data, Internet of things (IoT), cloud technologies and machine learning are transforming how infrastructure is operated and maintained. Automation and smartphones reduce maintenance costs, offering alternatives to traditional infrastructure design, construction and maintenance, such as building information modelling and 3D printing, while predictive maintenance can extend the life of the asset while ensuring efficient budget allocation. Information technology systems such as digital twins, used in conjunction with blockchain technology, can facilitate data gathering and analysis, reducing costs and potential fraud. In addition, technology development plays a critical role in making infrastructure more resilient to future disasters by ensuring the continued operations of critical networks such as utilities, transport and telecommunications.
However, existing decision-making frameworks are not always well adapted to accommodating long-term infrastructure maintenance and operations needs. For example, because operations and maintenance are a long-term endeavour, it can become neglected by decision-makers if political incentives are skewed towards displaying short-term results. This can result in inefficient investments that fail to respond adequately to the needs of the population. For this reason, it is important that operations and maintenance needs are considered for project design, budgeting, selection and prioritisation (OECD, 2021[53]).
2.5.2. Current international best practice
Countries can ensure assets performs throughout their life by:
monitoring asset performance against predefined service delivery targets and expected outcomes.
adopting innovative techniques to better maintain assets and prolong their useful lives
ensuring that audit and ex-post value for money evaluation are carried out and the results are used in the decision-making process (2020[1]).
Establish shared-service delivery contracts between levels of governments or across sectors, which enable infrastructure providers to deliver services at greater economies of scope and scale and take advantage of expertise in neighbouring sub-national governments or line ministries.
2.5.3. Current practices in Egypt
The following section describes current practices in Egypt in relation to network and asset maintenance and contract management.
Network and asset maintenance
MPEDIC is responsible for managing and allocating the necessary investments required to implement replacement and renewal projects, which involve replacing or substituting ageing assets to maintain the existing production capacity or service—essentially creating new assets to replace those whose lifetime has ended. MPEDIC is also responsible for funding major overhauls. On the other hand, MoF is responsible for managing and allocating funding for periodic maintenance.
Maintenance is commonly funded by sovereign debt or, where possible, cost recovery mechanisms. Egypt’s approach to allocating funding to maintenance could be strengthened by adopting a systematic approach to identifying maintenance needs and expenditure. This would enable line ministries and state-owned enterprises to present MoF with evidence for why maintenance funding should be prioritised in upcoming budgets ((n.a.), 2024[14]). For example, asset managers in MoT allocate 3-4 percent of their project budgets to maintenance, but this is ad hoc and not based on a systematic approach. However, the development of Asset Management System (AMS), a digital asset management system described below, is helping to systematise maintenance costs and reduce emergency repair costs. In addition, depreciation is not typically recorded in the government’s operating statements. While depreciation must be reported by a group of public entities known as Public Business Centre Companies who comply with Egyptian Accounting Standards, this requirement does not apply to other public entities (IMF, 2023[16]). Pleasingly, MoT is currently co-ordinating with the MoF to integrate asset depreciation systematically into government financial reporting.
As described in section 2.2.2, MPEDIC has recently launched ISIPPM, which is in part used for monitoring the performance of infrastructure assets. In doing this, ISIPPM collects KPIs, an example including the number of water canals built for the purposes of irrigation. MPEDIC then works closely with line ministries on maintenance planning. ISIPPM also includes capacity for a citizen interface, allowing people to participate in decisions about infrastructure through the online tool. Traditionally in Egypt, monitoring has been focused on individual projects, without considering systemic issues, patterns or trends at the line ministry or portfolio levels, such as those related to cost escalation and meeting timeframes. However, it is understood that the ISIPPM is intended to enable a broader portfolio management approach in the future (IMF, 2023[16]). With this in mind, it will be important that ISIPPM can collect the necessary information and has the analytical capabilities so that trends related to costs, the meeting of time commitments and the achievement of intended benefits and outcomes at the ministry and portfolio levels can be observed. Box 2.11 and Box 2.12 outline methods from Austria and Switzerland for establishing a comprehensive understanding of performance across an infrastructure portfolio.
Box 2.11. Evaluation of asset performance in Austria
Copy link to Box 2.11. Evaluation of asset performance in AustriaLifecycle performance is an important part of understanding the total resilience of an asset or network. By managing assets and networks efficiently at all stages, countries can get greater value for money and outcomes across the entire lifecycle of an asset. This requires collecting data and monitoring assets at different lifecycle stages against performance standards to make informed choices about investment for upgrades, maintenance and replacement of assets. In Austria, a Network Condition Report has been published annually since 2015 and presents the overall asset performance of the rail network of ÖBB-Infrastruktur AG. The results of this evaluation form the basis for the planning of re-investments and maintenance.
The network condition score is calculated to rate the asset performance and expresses the overall assessed situation of an asset or the entire network in terms of functionality, safety, quality, condition and substance. Existing data from the network databases are used as the basis for evaluation. To calculate the network condition score, the asset performance of around 230,000 individual assets is determined according to the network condition methodology. The assets are evaluated according to a rating system of 1 to 5, with lower grades indicating good asset performance and higher grades indicating poor asset performance which may need renewal. The assets are weighted with the technical replacement value. In the 2021 Network Condition Report, the technical replacement value of all assets is EUR 52.3 billion (EUR 46.5 billion in 2020). The 2021 network condition rating of 2.1 shows that the network is in a good and stable condition.
Source: (OBB-Infra, 2021[54])
Box 2.12. Network status reports in Switzerland
Copy link to Box 2.12. Network status reports in SwitzerlandMonitoring assets at different lifecycle stages against performance standards can help make informed choices about investment for upgrades, maintenance and replacement of assets. In Switzerland, the Network Status Report illustrates the state of national highway and railway infrastructure.
To plan and prioritise maintenance or renewal work and ad hoc financial needs for railway infrastructure, infrastructure managers regularly identify the condition of the rail network. They do so in accordance with uniform requirements, criteria and indicators (Railway Technical Regulation 29900 RTE 29900). Facilities are evaluated primarily in terms of the actual or remaining period of use and the phase of the life cycle in which the corresponding facility is located. This results in five state classes, ranging from 1 (new condition requiring no special measurement) to 5 (critical condition requiring immediate action). The security requirements are always met, regardless of the state class considered. Although a Class 5 installation has exceeded its normal service life, it still meets the safety requirements.
The Federal Office of Transport (FOT) consolidates the various reports prepared by the companies to obtain a high-quality, comprehensive and easily understandable overview of the state of the railway infrastructure in Switzerland. Infrastructure managers are responsible for operating efficiently and maintaining the quality of infrastructure. In addition, the Confederation expects infrastructure managers to achieve the following objectives:
1. Ensuring security;
2. Ensuring availability, resilience and quality of the network;
3. Optimal and non-discriminatory use of existing capacity;
4. Long-term preservation of infrastructure value; and
5. High productivity and efficient management of available resources.
In order to better measure the degree of achievement of objectives, the Confederation has defined indices for selected objectives. The FOT verifies the extent to which the objectives have been achieved and can then make recommendations for adjustments and, if necessary, lay down corrective measures. The indices not only allow comparisons between infrastructure managers (benchmarking) but also form the basis for drawing up performance agreements for the following period. Similarly, the Federal Roads Office publishes the National Highway Status Reports to give a transparent overview of the current state of the national road network and the medium-term financial requirements for ensuring its availability, functionality and safety.
Source: (Federal Office of Transport, n.d.[41]) (Federal Roads Office, n.d.[42])
Line ministries play an important role in overseeing maintenance within their sectors. For example, Ministry of Health and Population (MHP) hands over responsibility for operations and maintenance of water assets to public operating companies after three years of ownership, first ensuring that staff within those companies are adequately trained to monitor the performance of assets. To improve asset management within these companies, MHP has introduced several business improvements, including the setting of business plans and KPIs, with MHP providing funding on the condition that targets are met. In transport, MoT monitors service levels and is subject to performance benchmarking.
A common tool for collecting information on assets is an asset register. While asset registers are used in Egypt, they could be more systematically applied. More information could be made available regarding how asset registers should be used, such as how often they should be updated and what information they should collect. The IMF notes that information about the government’s non-financial assets, such as physical infrastructure, is kept in a “widely decentralised network of asset registers that vary in practices” (IMF, 2023[16]). In Egypt, contractors are encouraged to build asset registers with a logbook of services and maintenance needs. It is understood that the asset registers that do exist are updated every two years and may collect details on the date of construction, operating hours and similar details. Progress is being made in the transport sector: as described above, MoT’s new digital tool AMS has been developed in collaboration with international partners and is currently being used to collect asset information for metro and railway operations. In the transport sector, which has national asset inventories at the national and sub-national levels of government, MoT is implementing a phased approach to standardising asset databases covering roads, railways, and ports. Integration into a unified digital platform will enable lifecycle tracking and prioritisation of maintenance. MoT also uses quantitative modelling of existing assets to understand future maintenance needs and analyse the risk of service disruptions, which are addressed through contingency planning. It is also understood the Ministry of Information and Communication is establishing a digital state property management system, which may help to standardise the recording of government-owned assets (IMF, 2023[16]). As this tool is developed, it is important that it is designed in a way that provides a standardised, consistent method for information about assets to be recorded.
There are also some examples of shared-service delivery arrangements taking place in Egypt. For instance, there is a holding company that oversees 24 regional utility companies across water, electricity and transport. The holding company oversees the development of a master plan that covers all the utilities provided by the 24 regional companies. In the transport sector, Plans are in place to expand shared-service centres in maintenance and operations, reducing duplication, enhancing operational efficiency, and optimising financial and human resources in the medium to long term.
Contract management
Egypt exhibits some practices for holding contractors accountable for project specifications and professional standards. For instance, common practices include dedicated on-site supervision of projects, delivery-based payments and enforcement measures, such as penalty clauses and the risk of contract termination. For example, MoT includes operation and maintenance provisions in contracts with international and national implementing entities, and monitors its contractors for the quality of performance and inputs, such as the quality of the materials used, and requests contractors to complete monthly progress reports. MoT’s contracts for infrastructure and signalling systems also include maintenance agreements with durations ranging between eight and fifteen years, in addition to the standard warranty periods. This approach aims to preserve the technical readiness of projects, ensure continuous and efficient operations, and minimise breakdowns and future maintenance costs Finally, MoT can withhold payments if performance measures are not met and reserve the right to terminate the contract.
In the event of a contract renegotiation, amendments can be made, although they require approval and disclosure for projects above certain thresholds. Open-book practices, which involve the sharing of information about charges, costs and performance data between the client and the supplier, also occur. Costs are indexed in a cost register, which allows for a 25 percent positive or negative fluctuation in prices. In preparation for cost escalation, MoT asset managers are in the practice of setting aside a small amount of contingency – in one case the amount allocated was 4 – 5 percent of total budget costs. However, this is done on an ad hoc basis and is not based on a systematic, best-practice approach.
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