Egypt to reveal new "vision" for Ethiopia's Grand Renaissance Dam project at tripartite talks on 24 August

Tripartite discussions between Egypt, Ethiopia and Sudan over the future of Ethiopia’s planned Grand Renaissance Dam project are due to be held in Khartoum on 24 August.

The project has been a source of concern for the Egyptian government since May 2013, when images of the dam’s construction stirred public anxiety about the possible effect on Egypt’s potable water supply.

Ethiopia, however, maintains that Egypt’s water share will not be negatively affected by the successful completion of the project, set to be Africa’s largest hydroelectric dam.

In what has been viewed as a demanding and interfering move within Ethiopia, Egypt’s Irrigation Minister, Hossam El-Moghazi, told Mehwar TV that Egypt has a new “vision” regarding Ethiopia’s planned Grand Renaissance Dam project, which it hopes to reach terms on at the 24 August talks in the Sudanese capital.

In a telephone interview, El-Moghazi said the Egyptian delegation will head to Khartoum for two days of discussions on the Grand Renaissance Dam project, regional water security and defense.

“Egypt has a new vision, that will not affect Egypt’s water share, and we are expecting that the other party responds to it,” said El-Moghazi.

The talks are expected to develop the seven main points that Egypt’s President, Abdel-Fattah El-Sisi, and Ethiopian Prime Minister, Hailemariam Desalegn, previously discussed during a meeting in late June – among them fostering dialogue and cooperation between the two countries as well as regional projects to meet the growing demand for water. 

Resuming the work of the tripartite technical committee and respecting international legal principles were also among the points on which both sides had reached common ground. The committee's discussions were originally halted last December when Sudanese President, Omar Al-Bashir, announced his support for the dam during a meeting with Ethiopian Prime Minister, Hailemariam Desalegn.

Meanwhile, El-Moghazi said that Egyptian satellite images have revealed that construction has not yet begun on the part of the dam which will reserve the Nile’s water. Regardless, Egypt has demanded that Ethiopia submits the dam’s construction plans for assessment by international experts, prompting anger from within Ethiopia at Egypt’s perceived interference in Ethiopian domestic affairs.

Ethiopian Irrigation Minister, Alamayo Tegno, responded that his country was already committed to the recommendations of an international committee of experts and stressed that Egypt’s water share would not be negatively affected by the completion of the Grand Renaissance Dam.

For expert analysis of Egypt's security, politics, economy, and business environment see Egypt Politics & Security or contact info@menas.co.uk

© 2014 Menas Associates

Egypt: El-Sisi Announces New Mega-Project on the Suez Canal

President Abdel Fattah El-Sisi announced, 5 August, a new plan to build additional channels on the Suez Canal which would deepen and widen the current passageway and construct new channels to speed up traffic, with an aim to greatly expand traffic along the trade route.

Admiral Mohab Mamish, the Chairman of the Suez Canal Authority (SCA), has said that the new channel would take five years to be completed, although the President has subsequently said that he would like to see the project completed in just one year. 

An official with the SCA estimated that revenues from the expansion would reach US$13.5 billion by 2023, more than doubling its current revenues. We have not been able to determine how accurate these forecasts are, however, and remain sceptical about the merits of the new plan which will just cut waiting times to use the Canal and speed up transit. We are also unsure if this project, once complete, will attract additional ships to transit through it.

In the local media, the announcement has been hailed as the country’s new mega-project, and serves as a further indication of the scale of the new President’s ambitions, as well as tapping into the vein of nationalism. El-Sisi made clear that the army would take the lead and that any private partners (he mentioned that up to 20 firms could eventually be involved) would work under its supervision. 

Work has already begun, with no public discussion of the merits of this investment and we have been told informally that the thousands of vehicles working on the project will use significant supplies of fuel, which remains in tight supply in the market at times. The President noted that shares would be offered to finance this project at different prices, although the financial regulator noted that the differential pricing of shares is illegal. It still remains uncertain how this project will be financed and, if shares are sold to finance it, what the shareholder would then be entitled to in the future.

At an expected cost of US$4 billion, we believe the economy would be improved more efficiently by investing in the modernisation of Egypt’s railway system, adding to the main cities’ mass public transport systems, and power stations (given the continuing power cuts, which are now running at up to five times a day in some areas), as well as spending on road building, water and electricity distribution in poor areas.

For expert analysis of Egypt's security, politics, economy, and business environment see Egypt Politics & Security or contact info@menas.co.uk

© 2014 Menas Associates