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Turning youth centres into investment projects is fruitful public-private partnership: Sports Ministry - Daily News Egypt

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Turning youth centres into investment projects is fruitful public-private partnership: Sports Ministry

Initiative applied in 200 youth centres across 23 governorates and saw proceeds of EGP 1.34bn

The Ministry of Youth and Sports has succeeded in setting up cooperation frameworks with the private sector to develop, operate, and establish youth centres across Egypt, and convert them into community service centres.

The collaboration is taking place through turning the centres into investment projects under the usufruct system. Through this, the state aims to provide the construction infrastructure for youth centres, find continuous self-financing sources, and expand activities.

The investment placement projects under the usufruct system were implemented by the private sector at youth centres across the country. They have been designed to establish, develop and manage untapped assets at these centres under the usufruct system.

The investment returns of these projects have amounted to approximately EGP 1.34bn at the end of 2020. This includes EGP 826.5m in construction value and EGP 513.5m for usufruct, through 301 projects offered in 200 youth centres. It covers 56 playgrounds, 44 swimming pools, 39 events halls, 72 shops, 20 gyms, 34 cafeterias, and 36 different service projects.

The usufruct period for projects varies according to the controls announced by the Ministry of Youth and Sports, ranging between 9 and 12 years for swimming pools, between 5 and 8 years for event halls, between 3 and 5 years for stadiums, and no more than 7 years for shops.

The Ministry of Youth and Sports will receive 25% of the usufruct revenues for the project, while youth centres will receive the remaining 75% of these revenues.

According to a report obtained by Daily News Egypt, the investment offering projects were implemented in 23 governorates, namely: Cairo; Giza; Qaliubiya; Alexandria; Beheira; Menoufiya; Sharqeya; Daqahleya; Gharbeya; Ismailia; Fayoum; Assiut; Luxor; New Valley; Sohag; Kafr El-Sheikh; Damietta; Minya; Port Said; Aswan; Red Sea; Beni Suef; and Qena.

The projects contribute to providing 18,050 job opportunities, including: 2,000 in Cairo; 1,600 in Daqahleya; 1,500 in Qaliubiya; 1,400 in Giza, 1,100 each in Menoufiya and Sharqeya; as well as 1,000 each in Beheira and Kafr El-Sheikh.

Mohamed Abdel Kader, Assistant Minister of Youth and Sports for Youth Centres Affairs, said that the unwillingness of youth centres to participate in the project with the private sector has been its biggest obstacle. He added that some believed that the ministry would build the project for centres.

Mohamed Abdel Kader, Assistant Minister of Youth and Sports for Youth Centres Affairs
Mohamed Abdel Kader

A further obstacle has been the lack of elected Boards of Directors at youth centres as well as issues with licences. Despite these initial obstacles, all participants have now understood the project, and there has been an improvement in the perception of the project.

The efforts of Egypt’s Minister of Youth and Sports Ashraf Sobhy in the Council of Ministers, and in cooperation with the Ministry of Local Development, has meant construction was allowed in youth centres.

Abdel Kader told Daily News Egypt that the existence of projects has created an element of attraction for investment. This is due to there being low cost projects available which have encouraged owners with small capital to enter and obtain projects and invest in them.

At the same time, large projects have attracted local and foreign investors. The Smouha Youth Centre in Alexandria is seen as an example of this, having been acquired by Troy, a joint Saudi-Egyptian-English company. He added that, in the case of the Smouha Youth Centre, 20% of the workforce was appointed from members of the Youth Centre.

Abdel Kader said that there are many projects in Upper Egypt, but the population density is higher than that of Lower Egypt. Along with the customs, traditions and economic conditions, investors prefer Lower Egypt, with is seen as more attractive for capital.

However, this has not prevented major projects from being set up in Upper Egypt, such as the Al-Zohour and Al-Kawthar Youth Centre in Sohag, and swimming pools in Luxor.

He explained that there is a complete separation between the project management and the youth centre management. Along with separate electricity, water, and gas facilities from the youth centre, this prevents the existence of any problems with regard to working employees of the ministry.

Abdel Kader said that the expectations for the first phase of the cooperation frameworks, which includes 700 projects, would yield EGP 3bn between construction costs and usufructs fees.

He pointed out that the youth centres had more revenues than they obtained from subsidies, and all the centres in which projects were set up were removed from government support. For example, the Beni Suef Youth Centre received EGP 43,000 per month from the project. The Imbaba Youth Centre was receiving a subsidy of EGP 50,000 per year from the ministry, but is currently making EGP 27,000 a month from the project.

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