What you need to know about Russian Industrial Zone in Port Said



Wed, 13 Dec 2017 - 02:26 GMT


Wed, 13 Dec 2017 - 02:26 GMT

Tractors work on Egypt's New Suez Canal project at the Suez Canal zone, Egypt, June 13, 2015 - REUTERS/Asmaa Waguih

Tractors work on Egypt's New Suez Canal project at the Suez Canal zone, Egypt, June 13, 2015 - REUTERS/Asmaa Waguih

CAIRO – 13 December 2017: Egypt and Russia have been negotiating a $7 billion worth of Russian investment in an industrial zone in the East Port Said region, with a final agreement set be finalized soon.

In a statement on Wednesday, the Suez Canal Economic Zone revealed the details on the negotiated Russian Industrial Zone (RIZ).

The RIZ will be established on an area of 5.25 square kilometers and will be built over three phases.

Development works of the first phase, which will involve one square kilometer, will start in 2018 by a Russian developer that will also work on attracting Russian investors and companies throughout 2018 and 2019. This phase will create 7,300 jobs in the construction field.

The second phase will develop 1.60 square kilometers and will be finished by 2022, creating 10,000 jobs, while the third phase will develop 2.65 square kilometers and generate 17,000 jobs.

The three phases are expected to be finished by 2031, when Russian companies will start operations, providing some 35,000 direct and indirect jobs.

Industrial projects and buildings will be built over a space of 2.8 square meters, while the rest of the land will be used to build residential units as well as commercial and entertainment facilities for the zone's staff.

The Egyptian and Russian sides have agreed to establish a company, under the name of Moscow Economic Zone, to be responsible of the zone’s operations and construction works.

The two sides have further agreed that the Egyptian and Russian governments will supervise the project, which is funded by the Russian Direct Investment Fund (RDIF) and a number of Egyptian banks.

Manufacturing air conditioners, motors, construction equipment, glass, ceramics, electronics, medical supplies and plastic are among the industries targeted for the RIZ.

Chairman of the Suez Canal Authority (SCA) Mohab Mamish said in the statement that the RIZ has been agreed upon in accordance with East Port Said’s needs of industries as well as the needs of the domestic market.

He said that the zone will serve as a gateway for Russian companies to European and African countries.

Mamish added that the land granted for the RIZ is on usufruct basis according to the law, saying that one condition for establishing projects and industrial complexes inside the Suez Canal Economic Zone is that 90 percent of the workforce should be Egyptian.

This would help the economic zone realize its target of creating one million jobs, according to the sustainable development strategy “Egypt Vision 2030”, Mamish said.
In October, Mamish announced that negotiations between Egypt and Russia on the industrial zone have been successful.

Discussions with Russia on the details of the agreement started in 2014.

Over the past two years, Egypt has been seeking foreign investment for the Suez Canal Economic Zone, which is set to include an international logistics hub and areas for light, medium and heavy industry, as well as commercial and residential developments.

Stretching over 461 square kilometers, the zone extends through the three Suez Canal governorates of Suez, Port Said and Ismailia, and will include six maritime ports, to be completed by 2045.



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