CAIRO - Egypt has seen so many deadly road, rail, sea and other accidents over the last half decade.
Over 1,000 died when a ferry caught fire in 2006, and a series of train crashes have killed dozens more. There was a fire at the upper house of parliament two years ago. And Egyptians sweated through widespread power cuts this summer.
Though the population has burgeoned to 78 million in the most populous Arab country, infrastructure spending has fallen as a proportion of national income in the past two decades.
Economists say Egypt's overburdened transport and energy networks need billions of dollars in upgrades to allow the level of economic growth the country needs to create enough jobs for its fast-growing workforce.
Faced with steep budget deficits, the government has responded by trying to drum up private firms' interest in rail, port, highway, energy and other projects. Officials say this tactic could prove fruitful, but it is still largely untested.
"Obviously power brownouts, rising inflation, or the failure of goods to get to market is a drag on growth. The question, of course, is how you finance it, because the government cannot," Simon Kitchen, economist at investment bank EFG-Hermes, said.
A 2010 World Bank report said that if Egypt increased infrastructure spending from 5 per cent to 8 per cent of gross domestic product (GDP), it would boost growth per capita by an additional 1.5 per cent in 10 years and 3 per cent in 30 years.
The report said infrastructure investment in Egypt was about 10 per cent of GDP in 1983, nearly 12 per cent in 1988 but dipped to about 5 per cent in 2007, the latest figure available.
"Infrastructure investment has suffered a substantial decline," the report's authors wrote. "A developing country like Egypt cannot afford such stagnation."
Egypt, with its sizeable domestic consumer market, offers plenty of attractions for investors. It is close to Europe, and sits at the top of Africa and the heart of the Middle East, giving it good access to markets.
Even in the global crisis, growth stayed near 5 per cent, helped by tax cuts and other reforms introduced since 2004.
Despite the changes, investors still face hurdles like a large and creaking bureaucracy.
Egypt ranked 106th in 2010 on a World Bank index on the ease of doing business. That was better than last year, but still well below some Gulf Arab states and rival emerging markets like South Africa, which was ranked 34, and Turkey, in 73rd place.
"In most infrastructure ... the government plays a key role in terms of the regulatory framework," said Rashad Kaldany, vice president for Asia, Eastern Europe, the Middle East and North Africa at the International Finance Corporation (IFC).
"You need to feel there will be consistency and stability in honouring contracts, etcetera."
The growth Egypt likes to boast about has also added to strains on the country's existing infrastructure.
New cities have mushroomed on Cairo's outskirts in the past 10 years, and hundreds of thousands more new cars are on the streets. Road safety is dismal and commuters spend hours caught in traffic jams, missing flights and appointments.
"We need roads connecting new cities to each other instead of cars pouring into downtown," said Mohamed Hassan, driver of a Mercedes who works at a tourism firm, speaking in central Cairo where roads are often gridlocked.
Poor transport has contributed to double-digit inflation, now running at 11 per cent, as goods take longer to reach market.
The government has responded by seeking to improve internal trade and setting up new storage zones across Egypt. It has attracted Germany's Metro Group, which has launched one wholesale store and eyes 20 more.
Widespread power cuts as temperatures climbed well above 40 degrees Celsius this summer stirred public anger, while also raising concerns about the impact on investment.
Until now, Egypt has generally supplied reliable energy. A hot summer and a growing number of air conditioners being switched on, all benefitting from power subsidies, put that system under strain.
"Clearly one of the biggest needs, as with other countries, is the electricity sector," the IFC's Kaldany said.
Officials recognise the need to upgrade infrastructure, but with a deficit of 8.3 percent last fiscal year, which ended in June, and forecasts of about 8 percent this year, the government wants private business to shoulder more infrastructure spending.
Egypt said in June it would offer $1.8 billion of "public-private partnerships" in road, rail and other projects.
Trade Minister Rachid Mohamed Rachid said in September Egypt was "aggressively seeking" private partners and wanted to draw up to 50 billion Egyptian pounds ($8.7 billion) in infrastructure projects in the next 18 months.
The first concession, for a wastewater plant, was awarded to Egyptian builder Orascom Construction Industries and a division of Spain's FCC in May 2009.
The government has also invited or plans to invite bids for water plants, a highway on the northern edge of Cairo, health centres, hospitals and a number of schools.
To entice firms, Egypt has simplified the procedures for investment, pushed through new legislation, and plans to start trading funds on the bourse, which would give major projects in transport and power another financing option.
But officials and economists say such public-private partnerships have been slow to take off, with investors deterred by the political uncertainty and the currency risk associated with being locked into a long-term toll road or another project where the returns are in Egyptian pound. The Egyptian currency, hit a five-year low against the dollar this week.
"Particularly with these long-term investments, you need to set up a structure where it's very clear what people's returns will be over a long period of time," EFG-Hermes's Kitchen said.
