Thursday, 2 April 2015

Investment and incentives for Cairo Airport City

The Egyptian government is encouraging investment in Cairo Airport City, a plan for an investment zone around the capital city's airport. This article 'Airport City project to cement Egypt as a major aviation hub in Africa and the Middle East' is quite enlightening. It is from the WorldFolio News website, which states that it 'provides intelligence about the economies with the highest growth potential in the world, with a focus on understanding them from within'. There are interviews with 'key' (i.e. most powerful) government officials and senior business executives.

H.E. Hossam Kamal, Minister of Civil Aviation is interviewed about Cairo Airport City, explaining that it will cover 10 million square metres of land (i.e. 10 square kilometres, actually small compared to the world's largest airport cities - Kuala Lumpur Airport owns 100 square kilometres of land and Dubai’s new airport, Al Maktoum, has been allocated a full 140 square kilometres). Anyway, the Cairo Airport City plan is the usual aerotropolis strategy: use the land around the airport for commercial and industrial activities in order to maximise revenue from non-aviation activities.

The zones planned for the aerotropolis are typical: goods handling and logistics areas linked with the airport's cargo facilities; aviation training; hotels and restaurants to capture revenue from passengers (along with an amusement park to squeeze some revenue out of the captive audience of bored transit passengers). The solar panels planned for Cairo Airport City are not an unusual feature for an aerotropolis. Solar energy will reduce the airport city's fuel bill but they are just a green garnish; as a whole the commercial and industrial development will lead to a massive increase in greenhouse gas emissions as it is designed to be aviation dependent, feeding airport growth.

The article makes the standard claims about supposed economic benefits to the region i.e. job creation and revenues. The latter must be weighed against incentives (subsidies such as tax breaks) which are granted to investors. Incentives are not specified but H.E. Hossam Kamal states that the marketing plan 'significantly takes into account offering many incentives and facilities to attract investors'.

No surprise that Cairo Airport City is linked with surface transport infrastructure projects: there is plan for a rail link between the aerotropolis development, Ain Sokhna Port and an investment zone near the Suez Canal where, according to Kamal 'certainly there will be a need to establish airports at the region'. Which shows that the infrastructure development will trigger more infrastructure development.

The interview ends with an outline of the incentives (i.e. subsidies) that Egypt's Ministry of Aviation offers to international airlines. It's quite an insight into the high level of government support for the aviation and tourism industries. International airlines are given reduced landing and waiting fees for operating at airports in 'touristic cities'. In fact there is a 100% exemption from these fees at Luxor, Aswan, Abu Simbel and Assiut airports, for airlines using these airports as a base.

The Ministry of Aviation also pays towards the services provided to passengers at Egyptian airports: $20 per passenger on international, regular and charter flights and $4 per passenger on domestic routes. Ministers have also intervened to exempt certain airports from loading bridge fees and fire services, and duties have been reduced on aircraft weighing more than 200 tons.

Basically, the Egyptian government is falling over backwards to facilitate aviation growth.

4 comments:

Famel Jhone said...

Egyptian government is encouraging investment in Cairo Airport City, a plan for an investment zone is really a good support for the public the airport will be a good asset.
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Arjun kumar said...

I have a dream to get career in an aviation industry thanks admin to share this beautiful and useful post, I hope after did my Aviation Courses fromAviation academy in chennai can make my dreams become true.Keep on sharing.
Regards,
Nithu

Thuc Nguyen said...




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