By Mohamed Alaa El-Din
The IT sector has been suffering for several years from a decrease in demand and lack of attention from governmental bodies. However, the Ministry of Communications took serious steps recently, in cooperation with the Ministry of Finance, to revive the sector, and attract foreign investments which were widely received prior to the 25 January Revolution.
The Ministry of Communications was able to benefit from the law regulating partnership with the private sector (PPP) in infrastructure projects, services and public utilities, to propose the largest two projects in the market in five years, at a cost of EGP 2bn. The ministry also plans to propose a third project in the next three months worth about EGP 3bn.
The tenders of the two projects stirred the appetite of investors, as more than 50 companies and alliances applied to join the process. However, at the same time, the foreign companies annoyed the local companies, as the projects require huge financial solvency, which is not available to Egyptian companies. In addition, the law does not oblige foreign companies to use Egyptian ones, and local companies may continue to suffer from the low demand and revenues.
The latest dollar crisis Egypt is facing is also an obstacle for companies that seek to implement the projects, especially since most of the components will be imported. In addition, the companies are complaining about the launching of such huge projects by the Ministry of Communications in a short period, not more than three months, which may lead to confusion in the market.
The question remains: Will the PPP projects proposed by the Ministry of Communications be able to revive the IT sector? Or will the suffering of local companies continue from the decrease in demand on their services, and revenues?