Egypt Market Insight

Egypt's construction industry expanded by 3% in 2020 - although positive, it was a marked slowdown compared to recent years, reflecting the disruption caused by the COVID-19 pandemic and the six-month suspension of the issuance of new construction licenses for private buildings across most cities. Thus, the industry's output value, measured at constant 2017 US dollar exchange rates, increased from US$33.7 billion in 2019 to US$34.7 billion in 2020.

Work on large infrastructure projects, including the New Administrative Capital (NAC), New Alamein and New Galala, which are highly labor intensive, ensured that construction avoided some of the disruptions experienced by other sectors in the economy, and continued to work on schedule; without this ongoing work on public megaprojects, the slowdown would have been more severe. The government is focused on increasing public spending to implement new projects and provide better services.

Experts expects the industry to rebound with growth of 10.7% in 2021, before registering an average annual growth of 10.2% between 2022-2025. The industry's growth over the forecast period will be supported by investments in the development of fourth generation cities. In November 2020, the government allocated EGP90 billion (US$5.2 billion) for the development of infrastructure of fourth-generation cities in the country.

New Cities
  1. $45 Billion - The New Capital

The new administrative capital will strengthen and diversify the country's economic potential by creating new places to live, work and visit for 7 million people. To draw people to this new city, a series of key catalyst developments will be established at its core. This will include a new government administrative district, a cultural district, and a wide variety of urban neighborhoods. According to the plans, the city would become the new administrative and financial capital of Egypt, housing the main government departments and ministries, as well as foreign embassies.

The country estimates around US$ 8 billion to be invested in the new capital within the coming 10 years.  China is establishing an electric train with 11 stops and providing the wagons against a US$ 740 million loan.  The train will link the capital with main key cities and accelerate the migration of locals to the new capital.  It will also facilitate the transport of goods and production materials to and from the cities and industrial areas located along the railway line. 

  1. $19 Billion - The Golden Triangle Industrial City

The Golden Triangle, a new economic zone located between Qena, Safaga and Al Qusair, is considered one of the richest areas in mining sources accounting for 75% of Egypt's mining minerals. The project is implemented by Italian Consultancy D'Appolonia, seeking to attract US$ 19 billion investments. The project aims to establish a new industrial capital by building an industrial, commercial, mineral, and touristic zone to serve, not only Egypt, but the African continent.

  1. $10 Billion - New Al Alamain City

Al-Alamein region, once a battleground during World War II, is now being developed to become a second Alexandria and will offer investment opportunities in tourism, healthcare, logistics, agriculture, industry, education, and energy, for an estimated initial investment value of US$ 10 billion.  Currently, a new city is being developed by the government on the coastline of the Mediterranean, amidst the dozens of new touristic projects that the area is famous for. It is in the Governorate of Matrouh west of Alexandria

  1. $20bn Entertainment District

The Entertainment District, spanning 4,256 acres, will be in in Egypt’s New Administrative Capital, which has been under construction since 2015. The project will be developed in three phases over a period of 10 years. It will include construction of 4-star and 6-star resorts and themed hotels, luxury homes, villas and high-rises; a wellness centre; high-end and regional shopping and dining; a VIP golf course and other recreational and green space activities and theme parks.

  1. $8.5 Billion October Oasis

October Oasis is Mega Urban Development Project spearheaded by New Urban Communities’ Authority at the Ministry of Housing. It is a city in Giza Governorate, a satellite town and part of the urban area of Cairo, Egypt, 32 km (20 miles) outside the city.

Construction cost for October Oasis has been put at $8.5 billion allowing it to rank as one of the biggest construction projects in Egypt.

  1. $8.5 Billion Al Habtoor City Cairo

Three 5 stars hotels, three luxury residential towers, six mid-rise residential buildings, 204 luxury villas, An international school, shopping mall and polo club with two polo fields.

  1. $10 Billion Mostakbal City

Integrated mixed-use green city on 11,000 acres along the Cairo-Suez road. The development is divided into five phases. 50% of the project land is dedicated for open green spaces.

  1. $5 Billion Hyde Park New Cairo

An integrated 18,000 units residential project in New Cairo Developer: DP World Stage: Construction Estimated value: $5.6 billion Scope: 3,000 villas and townhouses, and 88 residential buildings. The project is built on 4.7 million square metersof land and includes an office park,retail complex, schools and healthcare facilities.

  1. Al Galala City And Tourist Compound

Galala City is considered as one of the largest Egyptian development projects, with a unique tourist-attractive location, virgin beaches and a high altitude that gives the city the climatic advantage of a temperature drop below sea level of 10 degrees. It has already attracted investments of more than US$ 100 million in the last two years. The City is located on the highest mountain plateau between Ain Sukhna and Zafarana and overlooks the Red Sea coast. It lies approximately 170 kilometers away from the Cairo International Airport and 50 kilometers away from Port Sokhna.

  1. East Ismailia - Technology Valley Zone

A new center for high-tech industries, as well as educational and scientific research institutions, East Ismailia is located 10 km east of the Suez Canal and covers an area of 71 km2. With excellent electricity and water supply, East Ismailia offers ample prospects for light and medium industry, research and development facilities, as well as commercial ventures and services. A tunnel is currently under construction to link East Ismailia with the Egyptian mainland, greatly decreasing east to west transportation time.

New Infrastructure Networks
  1. $14 Billion High-speed rail plans

500 km of high-speed modern rail network linking north and south Egypt and linking the Mediterranean with the Red Sea. The network consists of three main lines.

  1. $3.2 Billion - Alexandria-Cairo-Aswan High-Speed Rail Project

Alexandria-Cairo railway project has been estimated at USD 3.2 billion. The railway will measure 210 km and could ensure the transport of 2.3 million passengers per year. It includes the construction of five stations, maintenance sheds, administrative centers, control centers, bridges and related infrastructure, the installation of signaling and safety systems, and the laying of railway tracks. According to estimates, construction works to this high-speed railway would take 3 years to complete and the expected profit could be of 11%.

  1. Hurghada – Luxor High Speed Rail

The network includes three lines that will be executed in order of priority. The first links Ain Sokhna to New Alamein. It will start from the New Administrative Capital (NAC) passing through Ain Sokhna and 6th of October City until New Alamein. There will be a branch at Nubareya that extends to Alexandria through Borg al-Arab city. The first phase of that line will stretch from NAC until the 6th of October City over 122 kilometers and be linked with Rod al-Farag Axis. The second phase will extend from 6th of October City untill New Alamein over 210 kilometers passing in parallel to Rod al Farag – Data axis. That phase will have a branch line that starts from Nubareya at Beheira governorate and ends in Alexandria passing through Borg al-Arab over 99 kilometers. The third phase links NAC with Ain Sokhna and lies over 92 kilometers.

  1. $15 Billion Cairo Metro Lines 3 and 4

Line 3 calls for the construction of 47.87 km of track and 39 stations and is carried out in four phases. Line 3 links Cairo airport, Abbasiya, Ataba, Cairo University and Rod El Farag. Line 4 Phase 1 is 18.8 km linking Hadayek El Ashgar in Giza to El Malek El Saleh station in Cairo. It comprises 17 stations.

New Ports
  1. $1 Billion - Suez Canal Economic Zone

The Suez Canal represents a new chapter in economic development. The project targets developing more than 461 square kilometers to establish one of the largest industrial complexes and ports globally. The country aims to achieve this by increasing the capacity of ports and quays in ports providing main logistical services and establishing some navigational maintenance activities such as bunkering, shipbuilding and repair. The Suez Canal Economic zone (SC Zone) was launched in 2015 and is projected to generate US$ 12 billion annually.

  1. Ain Sukhna Area And Ain Sokhna Port

The Ain Sokhna Industrial Zone:

A major industrial and logistics hub at the southern gateway to the Suez Canal, combining port facilities, industrial zones, residential areas, and excellent road and rail linkages to Cairo and the city of Suez. More than 162 km2 of Ain Sokhna's total 210 km2 are earmarked for manufacturing. The area is designed to accommodate heavy, medium and light industries, as well as commercial facilities. Real estate development opportunities exist for building residential communities.

Ain Sokhna Port:

A major international gateway port for Egypt, the Arabian Gulf and Asia, Ain Sokhna Port is located on the western coast of the Gulf of Suez, 43 km south of the city of Suez. Covering an area of 22.3 km2, it has a depth of 18 m. Due to abundant surrounding land, the port is fast becoming a major industrial hub serving international and domestic markets. Expansion plans include new container terminals; dry bulks and general cargo terminals; liquid bulk terminals; logistics, warehousing and distribution centers; and a dry port.

  1. Al Tor Port

A strategic port for South Sinai occupying three hectares on the eastern bank of the Gulf of Suez, south of Abu Zenima. The majority of exports from Al Tor Port are minerals and dry bulks. This commercial port includes terminals for dry bulk cargo, general cargo and containers as well as fishing boats and a marina.

  1. Al Adabeyya Port

Located on the western shore of the Gulf of Suez, about 10 km south of Suez, this port facility is slated to process large volumes of dry bulks. Covering an area of 1.8 km2, Adabiya Port's nine berths with a total length of 1,840 m can handle dry and liquid bulk cargo vessels bearing up to 60,000 tons. Further investment in the port is geared toward the creation of additional terminals to handle dry bulks, liquid bulk, general cargo and containers.

  1. West Port Said Port

As part of its terminal expansion project, West Port Said container terminal has finished furnishing and upgrading its storage yard. The total yard area of the terminal is now 2 km2.

  1. Integrated East Port Said Area

A main international and domestic transshipment hub at the northern entrance of the Suez Canal. East Port Said Port is known for its sheltered deep-water facilities that allow it to accommodate large vessels, rendering it among the world's top 40 busiest ports and growing. Currently, there is the audacious development work of a 5km2 of port key walls to be availed for terminal operators to reap the unlimited potentials that this is port has to offer in an unprecedented place in the world.  The port will contain container Terminals/ Dry Bulk/ Liquid bulk and General Cargo, all of which will leverage on this unique transshipment hub along with the industrial activities in the 44km2 industrial activities in East Port Said Industrial area.

Breakdown of planned and un-awarded Egypt construction sector projects ($m)
Breakdown of planned and un-awarded Egypt construction sector projects by status ($m)