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Arab Republic of Egypt Urban Sector Update

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Arab Republic of Egypt Urban Sector Update 41178 v 1 ARAB REPUBLIC OF EGYPT Public Disclosure Authorized URBAN SECTOR UPDATE Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized THE WORLD BANK June 2008 Report No.: 44506-EG ARAB REPUBLIC OF EGYPT URBAN SECTOR NOTE VOLUME ONE URBAN SECTOR UPDATE JUNE, 2008 Sustainable Development Department Middle East & North Africa Region Document of the World Bank CURRENCY EQUIVALENTS (Exchange Rate Effective May, 2008) Currency Unit = Egyptian Pound (LE) Egyptian Pounds 5.33 = US$1 ABBREVIATIONS AND ACRONYMS BOT Build, Operate, and Transfer CAPMAS Central Agency for Public Mobilization and Statistics CDA Community Development Association CDS City Development Strategy EEAA Egyptian Environmental Affairs Agency ERA Egyptian Railways Authority ESA Egyptian Survey Authority ETA Egyptian Tunnels Authority GAFI General Authority for Free Trade Zones and Investments GAID General Authority for Industrial Development GDP Gross Domestic Product GOE Government of Egypt GOHBR General Organization of Housing and Building Research GOPP General Organization for Physical Planning GSF Guarantee and Subsidy Fund GTZ German Technical Cooperation HIECS Household Income, Expenditures, and Consumption Survey IBRD International Bank for Reconstruction and Development IDSC Information and Decision Support Center KFW German Bank for Reconstruction LE Livres Egyptiens LEC Local Executive Council LGU Local Government Unit LPC Local Popular Council MENA Middle East and North Africa MFA Mortgage Finance Authority MHUUD Ministry of Housing, Utilities, and Urban Development MOA Ministry of Agriculture MODMP Ministry of Defense and Military Production MOED Ministry of Education MOF Ministry of Finance MOI Ministry of Investment MOLD Ministry of Local Development NCUPD National Council for Urban Planning and Development NDP National Democratic Party NHP National Housing Program NGO Non-governmental Organization NOPWASD National Organization for Potable Water and Sanitary Drainage iii NUCA New Urban Communities Authority PPP Purchasing Power Parity UNDP United Nations Development Program USAID United States Agency for International Development TDA Tourism Development Authority Ziman The official boundary between agricultural and desert land Vice President: Daniela Gressani Country Manager/Director: Emmanuel Mbi Sector Director: Laszlo Lovei Acting Sector Manager: Jonathan Walters Task Team Leader: Ahmed A. R. Eiweida iv Table of Contents Acknowledgements ............................................................................................................................. viii Executive Summary ...............................................................................................................................ix Section 1. Introduction...................................................................................................................1 Egypt’s Urban Challenge ....................................................................................................................1 Objective of this Report ......................................................................................................................1 Approach and Methodology................................................................................................................1 Report Limitations...............................................................................................................................2 Section 2. Population, City Systems, and Urbanization.................................................................3 The National Population: Its Growth and Salient Features.................................................................3 Spatial Distribution and Density of Egypt’s Population .....................................................................4 Levels of Urbanization and the Problem with the Official Definition of Urban Place .......................7 Dynamics of Migration .....................................................................................................................10 City Size and City Ranking...............................................................................................................12 Egypt’s Cities, Regions, and their Economic Competitiveness ........................................................13 Dimensions of Urban Poverty, Household Incomes, and Slums.......................................................18 Section 3. Factors And Processes Of Urban Expansion And Service Delivery...........................21 General ..............................................................................................................................................21 Supply of Land for Urban Expansion and Processes of Its Conversion............................................21 Urban Infrastructure Provision and Operation ..................................................................................27 Urban Social Services Provision and Operation ...............................................................................29 Housing Production Processes and Housing Markets.......................................................................30 Creation and Operation of Industrial Areas ......................................................................................37 Financing Urban Expansion and Capturing the Urban Value Added ...............................................39 Section 4. Institutional, Regulatory, and Financial Frameworks Governing Urban Management and Expansion 41 General ..............................................................................................................................................41 Local Governments, Local Financing, and Decentralization ............................................................42 Central Government Control over Local Authorities and Weak Popular Representation.................43 Weak LGU Financial Autonomy and Control over Government Budgets .......................................44 Top-Down Supply-Driven Urban Planning ......................................................................................46 Unrealistic Planning and Building Standards for Urban Land Subdivision and Affordable Housing ...........................................................................................................................................................47 Unique Institutional Frameworks for New Towns and Desert Development ...................................48 Institutional Arrangements for Urban Transportation and Traffic Management ..............................49 Institutional Arrangements for Urban Solid Waste Management and Street Cleaning.....................50 Institutional Arrangements for Issuance of Building Permits ...........................................................50 Section 5. Assessment of the Government of Egypt’s Urban and Spatial Policies......................54 Main GOE Urban Policy and Spatial Strategy Formulations............................................................54 The Dominant New Towns Policy and its Record to Date ...............................................................55 Current Problems and Criticisms of the New Towns........................................................................58 Impact of New Towns Policies on the Rest of Urban Egypt.............................................................61 Regional Development Strategies and the Desert Development Imperative ....................................61 The Agricultural Land Conundrum...................................................................................................62 Policies and Actions to Deal with Informal Settlements...................................................................64 Urban Environmental Policies...........................................................................................................65 v Section 6. Recent Urban Policy Reform Initiatives .....................................................................67 General Climate for Reform Post 2004.............................................................................................67 Tackling the Issue of Urban Expansion on Agricultural Land: A New Realism?.............................67 Reform and Innovation in Urban Planning Practices........................................................................68 More Practical Development Standards and Sites and Services .......................................................69 Reform of Housing Policies ..............................................................................................................70 Decentralization and Greater Powers to Local Government.............................................................71 New Approaches to Urban Upgrading and Introduction of Participatory Development ..................72 Reform in the Infrastructure Sector...................................................................................................72 Capturing the Unearned Increment Due to Urban Development ......................................................73 Section 7. Conclusions and Recommendations: Ways Forward.................................................75 Conclusions.......................................................................................................................................75 Recommendations .............................................................................................................................79 List of Figures Figure
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