ECONOMIC REFORM SNAPSHOT: NEW BLOOD AT

UNCLAS SECTION 01 OF 02 CAIRO 000709

SIPDIS

SIPDIS
SENSITIVE

STATE FOR NEA/ELA, EB/IFD, EB/TRA, OES FOR CARTER-FOSTER
TREASURY FOR NUGENT AND HIRSON
COMMERCE FOR 4520/IT/ANESA/OBERG

E.O. 12958: N/A
TAGS: ELTN ECON PGOV EG
SUBJECT: ECONOMIC REFORM SNAPSHOT: NEW BLOOD AT
TRANSPORTATION MINISTRY TRANSFORMS WAY BUSINESS IS DONE

Sensitive but unclassified, not for internet distribution.


1. (SBU) Summary. A series of recent meetings at the
General Authority for Road, Bridges, and Land Transportation
(GARBLT) illustrates how private sector experience is
transforming the way business is done at the Egyptian
Ministry of Transportation (MOT). Shedding normal
bureaucratic inertia, former oil and gas executive Tarek El
Attar, the new head of GARBLT, is reaching out for new talent
to assist him in devising creative solutions to revamp
Egypt's dilapidated national highway system, utilizing
partnerships with both civil society and the private sector.
While a more comprehensive road safety strategy is still
needed to see a measurable decrease in the number of annual
road accidents and deaths, Mansour's private sector savvy is
bringing notable change to the MOT. End Summary.

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HEADHUNTING FOR TALENT
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2. (SBU) Since his appointment in February 2006, former
business mogul and current Minister of Transportation Mohamed
Mansour is slowly transforming the way business is done at
the MOT. One example of this is the selection of former oil
and gas executive Tarek El-Attar as chairman of GARBLT in
June 2006, tasking him with upgrading the 23,000 km of
national roads under his jurisdiction. (Note: The 26
individual governorates are responsible the remaining 37,000
km of roads in Egypt. End note.) El-Attar, in expressing
his seriousness about revamping the dilapidated national
highway system, told econoff he has met with the Prime
Minister four times since November 2006 regarding highway
reconstruction, and hired World Bank consultants to evaluate
the national road system's maintenance and repair needs.
Approximately 90,000 additional cars appear on Egypt's road
system each year, a heavy burden for the many already
congested and decaying streets.


3. (SBU) Bucking traditional public sector hiring practices,
El-Attar used a headhunter to hire a new team to transform
GARBLT's operations. In November, El-Attar hired Dr. Hisham
Fouad, an Egyptian-American, who had been working at the
Maryland State Highway Administration for seventeen years.
Fouad told econoff that GARBLT's short term plans include
numbering all national roads, adding signals and lights on
all highways, and the constructing a World Bank-sponsored
"Safe Road" from Hieksta to Zagazig in Egypt's populous Nile
Delta region. All new GARBLT-produced signs will exclusively
use high quality, reflective 3M products. In the long-term,
GARBLT plans to completely reconstruct all major highways,
create a more accurate accident data base, and audit existing
roads. A WHO representative working with GARBLT on a
inter-ministerial road safety strategy said the new team at
MOT is vastly more responsive than the representatives he
reached out to two years ago.

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EMPHASIS ON PUBLIC-PRIVATE PARTNERSHIPS
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4. (SBU) While an increase in tolls on national highways in
2007 will generate some revenue for national highway
projects, Minister Mansour acknowledges the vital role the
private sector plays in realizing MOT goals. Mansour
publicly stated in February 2006 that one of his main
objectives is to initiate public-private partnerships in
areas that need reforming, thereby creating opportunities for
job growth, foreign direct investment, and local investment.
Officials at GARBLT are trying to put his vision into action,
forging partnerships with both private sector and civil
society groups to solidify long-term funding. The Egyptian
operations of energy giant Shell, for example, in conjunction
with a local rotary club, agreed to fund new signs on the
highly-traveled, and dangerous, Cairo "Ring Road." GARBLT
courted prospective partners at an AMCHAM lunch in December,
and will soon present its strategic plan to other prospective
private sector donors who appear eager to fund their
initiative, but are looking for GOE guidance and leadership.
The World Bank estimates Egypt's roads are in need of 1.3
billion LE (USD 22 million) in upgrades, and even with some
private partnerships, the government must invest
substantially to see improvement in road conditions.

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CAIRO 00000709 002 OF 002


COMMENT
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5. (SBU) Integrated cooperation among high-level officials
at the Ministries of Transportation, Interior, Health, and
Information is needed to see a measurable decrease in the
reported annual 6,000 deaths and 35,000 injuries on Egypt's
roads. A national public awareness campaign and mandatory
drivers' education are also key. However, MOT's organized --
and non-traditional in the Egyptian sense -- approach to
improving the national highway system is a clear step in the
right direction. Though faced with resource constraints and
bureaucratic hurdles not seen in their previous jobs, former
private sector officials are approaching MOT challenges with
a high level of skill and creativity, which will hopefully
lead to real results.
RICCIARDONE