VZCZCXYZ0031
RR RUEHWEB

DE RUEHEG #6373 2890704
ZNR UUUUU ZZH
R 160704Z OCT 06
FM AMEMBASSY CAIRO
TO RUEHC/SECSTATE WASHDC 2002
INFO RUEHKU/AMEMBASSY KUWAIT 0264

UNCLAS CAIRO 006373 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
OPIC FOR SENIOR INVESTMENT OFFICER GEOFFREY TAN 
 
E.O. 12958: N/A 
TAGS: EINV EG
SUBJECT: APPLICATION FOR OPIC FINANCE:  DAMIETTA 
INTERNATIONAL PORTS 
 
REF: SECSTATE 146574 
 
 ¶1.  (SBU) Post supports OPIC's plan to provide an investment 
guaranty of up to $150 million for the Damietta Port Project. 
 OPIC's re-entry into Egypt's economy will be an important 
signal to the GOE and investors that OPIC is confident of 
Egypt's commitment to economic reform.  Moreover, OPIC 
participation in private-sector development projects like the 
Damietta terminal complements U.S. economic policy in Egypt, 
which seeks to promote private-sector led growth and trade 
facilitation.  The Damietta terminal also complements the 
GOE's transportation modernization strategy, which aims to 
promote private investment and operation in transportation 
infrastructure.  Post does not possess any derogatory 
information on the project, or the Egyptian partners, RAFIMAR 
and Damietta Port Authority. 
 
¶2. (SBU) In depth information and statistics on Egypt's 
maritime port operations can be found by visiting the 
Egyptian Maritime Data Bank website at www.emdb.gov.eg.  The 
GOE has embarked on an aggressive trade and customs reform 
program, recognizing the need for modernization and increased 
efficiency in its container ports to make better use of its 
excellent location adjacent to the Suez Canal and bordering 
the Mediterranean.  The GOE has secured, or is pursuing, 
private sector investment and operators in other key ports 
such as Alexandria/Dekheila, Port Said, and Ain Sokhna. 
Regarding regulatory structures, the Customs 
Authority, under the Ministry of Finance, has responsibility 
for customs procedures at all ports.  The port authorities of 
each port, under the Ministry of Transport, have overall 
management responsibility for port operations and regulation. 
 The Ministry of Investment is invoved in the ports only to 
the extent of facilitatng investment in new facilities 
through provisio of land and management of investment 
proceduresregulations regarding specific projects. 
Coordintion between the ministries of Finance, Transport and 
Investment is good, as all lead by reform-minded ministers. 
In the case of the Ministry of Transport, Minister Mansour 
comes directly from the private sector and is a past 
president of the American Chamber of Commerce in Egypt. 
 
¶3. (SBU) Econoff spoke with a RAFIMAR representative, who 
explained that the first phase of the Damietta project is 
slated to begin within two years.  Once completed the port is 
expected to move 4 million TEUs per year.  Post believes this 
goal is realistic, as Damietta is well positioned to serve as 
a major transhipment hub for the eastern Mediterranean, 
handling shipments to/from Europe and Asia.  A key feature of 
the Damietta project is that no public funds will be sought 
to finance construction or operations.  The RAFIMAR rep told 
econoff that 70 percent of the start-up capital will come 
from the Kuwaiti partners.  While the final balance of equity 
shareholders has not been determined, it isour understanding 
that 35 percent will be reserved for private shipping lines, 
35 percent for the Kuwaiti partners, and 30 percent for the 
Egyptian partners. 
JONES