Language: English Original: English

MIC GRANT: STUDIES FOR THE LAUNCHING OF A GEOSTATIONARY SATELLITE PROJECT – NAVISAT

COUNTRY: EGYPT MIC REPORT Date: 18 February, 2009 Appraisal Team

Team Leader: Team Members: Sector Manager Sector Director Regional Director

Salieu JACK, Chief ICT/Telecom. Engineer, OINF.3 Khaled EL-ASKARI, Infrastructure Specialist, EGFO Enock YONAZI, Principal Telecom. Engineer, OINF.3 Egal ROBLE, Chief Officer, ICT4D Amadou Diallo Gilbert Mbesherubusa Jacob Kolster

Peer Reviewers

Massamba DIENE, Chief Infrastructure Specialist, ORQR Reginald Sherman, Senior Procurement Specialist, ORPU Amadou Oumarou, Principal Transport Engineer, OINF.2 Karim Mhirsi, Principal Investment Officer, OPSM Julian Bertlin, Senior Environmentalist, OINF.2 Rachel Aron, Socioeconomist, OINF.2 Stephen Owusu, Consultant, ORNA

AFRICAN DEVELOPMENT BANK

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TABLE OF CONTENTS

Table of Contents – Currency Equivalents – Weights and Measures – Acronyms and Abbreviations – Grant Information – RB Log-frame

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1. INTRODUCTION ................................................................................................................................ 1 1.1 Background ...................................................................................................................................... 1 1.2 Study Goal and Objectives............................................................................................................... 2 1.3 Justification ...................................................................................................................................... 3

2. SUMMARY DESCRIPTION OF STUDY........................................................................................... 3 2.1 Study Design and Formulation......................................................................................................... 3 2.2 Expected Outputs ............................................................................................................................. 5

3. COST AND FINANCING OF THE STUDY....................................................................................... 6 3.1 Study Cost ........................................................................................................................................ 6 3.2 Financing Plan.................................................................................................................................. 6

4. IMPLEMENTATION OF THE STUDY.............................................................................................. 7 4.1 Executing Agency ............................................................................................................................ 7 4.2 Implementation Schedule................................................................................................................. 7 4.3 Supervision and Monitoring............................................................................................................. 8

5. FINANCING ARRANGEMENTS....................................................................................................... 8 5.1 Disbursement ................................................................................................................................... 8 5.2 Suspension of Disbursement ............................................................................................................ 8 5.3 Letter of Agreement ......................................................................................................................... 8

6. PROCUREMENT................................................................................................................................. 8 7. CONCLUSIONS AND RECOMMENDATIONS................................................................................ 9

Appendices (Evidence that Government is committed to implement the targeted project in form of duly signed Request letter from Ministry of International Cooperation and Minutes of meeting, ToR and detailed cost estimates) are available at: \\afdbcprfs1\PRJT-OINF-PAR-ANNEXE\OINF_PAR_ANNEXES\EGYPT

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CURRENCY EQUIVALENTS

As of January 2009 UA 1 = USD 1.54

FISCAL YEAR

1 July – 30 June

WEIGHTS AND MEASURES 1 metric ton = 2204 pounds (lbs) 1 kilogram (kg) = 2.200 lbs 1 meter (m) = 3.28 feet (ft) 1 millimeter (mm) = 0.03937 inch 1 kilometer (km) = 0.62 mile 1 hectare (ha) = 2.471 acres

ACRONYMS AND ABBREVIATIONS ADB : African Development Bank DFS : Detailed Feasibility Study GoE : Government of Egypt ICT : Information and Communication Technologies MIC : Middle Income Countries MOU : Memorandum of Understanding NAVISAT : A Satellite-based Air Navigation and Safety Communications System NEPAD : New Partnership for Africa’s Development SLA : Service Level Agreement SOW : Statement of Works UA : Unit of Account

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Acronym Meaning Acronym Meaning

ACAC Arab Civil Aviation Commission GLONASS

Global Navigation Satellite System (Russian )

AES Aeronautical Earth Station / Aircraft Earth Station GNSS

Global Navigation Satellite System (European)

AFI Africa GPS Global Positioning System

ASECNA

Agency for Air Navigation Safety in Africa & Madagascar ICAO

International Civil Aviation Organization

ATM Air Traffic Management MID Middle East

ATNS Air Traffic and Navigation Services NAVISAT Navigation Satellite

CAA Civil Aviation Authority PPS Precise Positioning Service

CNS Communication Navigation Surveillance RFI Request for Information

EC European Commission (EC), RFP Request for Proposal

EGNOS European Geostationary Navigation Overlay Service RIMS

Ranging and Integrity Monitoring Stations

ESA European Space Agency SADC

Southern African Development Community

EU European Union SPS Standard Positioning Service

Eurocontrol

the European Organization for the Safety of Air Navigation VSAT

Very Small Aperture Terminal

GALILEO European Satellite Navigation System WAAS

Wide Area Augmentation System

GES Ground Earth Station

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GRANT INFORMATION

Client’s Information BORROWER: Government of Egypt IMPLEMENTING AGENCY: Ministry of Civil Aviation - NAVISAT

project Financing Plan Source Amount Instrument ADB UA 600,000 MIC Grant Government UA 55,200 Government Budget Total Cost UA 655,200 ADB’s Key Financing Information MIC Grant Currency UA Timeframe – Main Milestones (expected) Submission of MIC Grant to Country teams : 18/02/2009 MIC Grant Approval : 06/05/2009 Effectiveness : 30/05/2009 Last Disbursement : 31/12/2010

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RESULT-BASED LOGICAL FRAMEWORK OBJECTIVES EXPECTED RESULTS OUTREACH PERFORMANCE

INDICATORS TARGET/DEADLINE ASSUMPTIONS/RISKS

SECTOR GOAL Contribute to improving Communications, Navigation, Surveillance – Air Traffic Management services that would provide cost effective satellite communications and major improvements in the aeronautical services, thus enhancing safety and efficiency of air transport.

LONG TERM RESULTS 1. CNS - ATM services improved 2. Efficient air transportation

Beneficiaries RMCs Civil Aviation Authorities in Africa

1.1 Percentage of air travelers 1.2 Percentage of aircrafts 1.3 Percentage of sales volume for the navigation 1.4 Percentage of communications services 1.5 Percentage of volume of investment 1.6 Percentage of volume of accidents

By 2015: 1.1 Percentage of air travelers will have increased; 1.2 Percentage of aircrafts will have increased 1.3 Percentage of sales volume will have increased 1.4 Percentage of comm.. services will have increased 1.5 Percentage of investment will have increased 1.6 Percentage of aircraft accidents will have decreased

CNS/ATM services successfully implemented.

STUDY PURPOSE The aim of these studies (legal, financial, frequency & regulatory and human resources) are to determine the feasibility of a Satellite-based Air Navigation and Safety Communications System.

MID TERM RESULTS Study approved

RMCs Civil Aviation Authorities in Africa

1. Number of reports that are produced 2. Timeliness of reports

1. By Q4 2009 2. Study report approved by end 2009

Egypt full

commitment in order to allow financing by MDBs possible

Egypt have fulfilled technical pre-requisites as determined by the study

ACTIVITIES / INPUTS i) Feasibility studies, including Legal, Financial, Frequency & Regulatory, and Human Resources. FINANCIAL PLAN : MIC fund UA 600,000 Egypt UA 55,200 TOTAL UA 655,200

SHORT TERM OUTPUTS i) Feasibility Studies documents, fulfilling the requirements of potential financiers as an input for project appraisal

RMCs Civil Aviation Authorities in Africa

Feasibility Studies documents approved by Egypt

Documents approved by December 2009 Documents approved by December 2009

Egypt Department of Civil Aviation capacity on procurement aspects Mitigation: Appoint Project Coordinator to perform day-to- day activities

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REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP TO THE BOARD OF DIRECTORS ON A PROPOSED MIC GRANT TO THE ARAB REPUBLIC OF EGYPT FOR THE FOLLOWING STUDIES:

LEGAL, FINANCIAL, FREQUENCY & REGULATORY AND HUMAN RESOURCES FOR THE LAUNCHING OF A GEOSTATIONARY SATELLITE

PROJECT - NAVISAT Management submits the following Report and Recommendation on a proposed MIC Grant for UA 0.6 million to the Government of the Arab Republic of Egypt to finance the following studies (Legal, Financial, Frequency & Regulatory and Human Resources) for the launching of a geostationary satellite project - NAVISAT.

1. INTRODUCTION

1.1 Background 1.1.1 The civil aviation community realized in the early 1980s that the existing air navigation system would not cope with the expected progressive increase in air traffic and the needs of aviation-services users in the 21st century. Accordingly the International Civil Aviation Organization (ICAO) established the Future Air Navigation Systems committee “FANS”, which developed the concepts of a new air navigation system to overcome the shortcomings of the existing systems. The new system known as Communications, Navigation and Surveillance/Air Traffic Management (CNS/ATM) utilizes space technology, using satellites for supporting communication and navigation functions on a global scale. A harmonized world-wide implementation of the CNS/ATM system is now running to achieve its full benefits for safer and enhanced air navigation. 1.1.2 The Egyptian Ministry of Civil Aviation Authority through the Egyptian Aviation Holding Company (EAHC) took the lead to initiate the Geostationary Satellite NAVISAT Project aimed at providing satellite-based air navigation and safety communication services over Africa and some surrounding countries. A preliminary feasibility study was conducted in 2004/2005 by Egypt Civil Aviation Authority, having the expertise in CNS/ATM technology, and Alcatel Space which has a demonstrated expertise in the design and deployment of telecom and satellite navigation systems. The study results was the production of the Preliminary Technical Specifications of the Services and the NAVISAT System, Preliminary Business Plans, and an Implementation Roadmap for the NAVISAT Project. The results of the preliminary study and project concept have also been reviewed and approved by the major civil aviation entities (ICAO, ACAC, ASECNA, …etc.) in the region, setting the scene for the launch of the second phase activities of the project for carrying out the necessary detailed feasibility studies. 1.1.3 It is against this background that the Government of Egypt (GoE) have submitted a request to the Bank to consider financing the detailed feasibility studies for the “launching of a Geostationary Satellite (NAVISAT Project)” on a grant basis. These studies comprise i) Business and Technical; ii) Regulatory & Frequency Coordination; iii) Institutional, iv) Human Resources; v) Legal; vi) Financial; vii) Technical Development & Optimized Solution; and viii) Project Management. Following a meeting held on 15th October 2008 in Cairo, Egypt, a consensus was reached between the NAVISAT Project team representing the Ministry of Civil Aviation of Egypt and the

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Bank Staff that the Bank should consider the possibility of funding only these studies on Legal, Financial, Frequency & Regulatory and Human Resources amounting to UA 600,000 since the NAVISAT project has already launched the bidding process for the other studies. It is worth noting that these other studies are currently on-going. The GoE in collaboration with it’s co-sponsors of the project are providing funds for these studies. However, the implementation of the Bank supported studies will be synchronized with the already on-going related activities undertaken by GoE. 1.1.4 The primary objective of the NAVISAT project is to assist the African Continent which has no such navigation facilities (currently using radar systems). The proposed satellites “foot print” covers the entire African continent and some surrounding countries. NAVISAT services coverage is shown below.

1.1.5 The Government of the Arab Republic of Egypt is therefore seeking a grant of UA 600,000 from the Bank’s Middle Income Countries (MIC) Technical Assistance Fund (TAF) to assist it in co-financing the services of consulting firms to undertake some of the detailed feasibility studies of its NAVISAT project.

1.2 Study Goal and Objective 1.2.1 The sector goal of the study is to contribute to improving Communications, Navigation, Surveillance – Air Traffic Management services that would provide cost effective satellite communications and major improvements in the aeronautical services, thus enhancing safety and efficiency of air transport. The objective of these studies (legal, financial, frequency & regulatory and human resources) are to determine the feasibility of a Satellite-based Air Navigation and Safety Communications System.

Aeronautical Communication

Coverage

Navigation Coverage and Potential Telecom

Coverage

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1.3 Justification 1.3.1 The implementation of the NAVISAT project will offer highly reliable aeronautical telecommunication services over Africa and some surrounding countries. The benefits of this project are multiple and cover institutional, technical, economical and social aspects. The following are some of the major benefits: 1.3.2 For all African and surrounding Countries:

Cost saving of navigational aid ground equipment installation and maintenance; Increase of traffic (more secured airspace will lead to more users) resulting in

additional Air Traffic Control (ATC) centres revenues; The system will not overload states with extra costs as the ATC service provider

(as a user) will pay only the rental value of the received services; and Low cost service (light infrastructure).

1.3.3 For all Airlines:

Reduction of delays and detours (due to application of Automatic Dependent Surveillance (ADS) support) resulting in reduced fuel consumption, aircraft maintenance cost, crew charges, etc.;

Airlines as a user will pay only for the exact amount of services they received (cost per Kb/s) compared to the current situation in which airlines are charged for distance/time/weight/type of aircraft flown over a particular country airspace; and

Relatively low cost of services as a result of applying the multi-mission concept; and no investment for avionics (Sat Com) for already equipped aircraft.

Above all, the project will improve safety for air traffic in the continent resulting from the high quality of services (availability, reliability, integrity), global coverage and the overall monitoring of flights over the region. 1.3.4 This intervention is consistent with the Bank’s Medium term strategy 2008-2012 which requires the Bank to direct a significant proportion of its new commitment to infrastructure. It is also in line with the current Bank’s Country Strategy Paper (CSP) for Egypt which identifies support to infrastructure development, including transport infrastructure, as one of its main pillars. The intervention further falls under pillar 1 of the Bank’s ICT Operations Strategy which focuses on development of broadband telecommunications infrastructure.

2. SUMMARY DESCRIPTION OF STUDY

2.1 Study Design and Formulation 2.1.1 The study will involve the procurement of the services of consulting firms to undertake the following studies (legal, financial, frequency & regulatory, human resources) aimed at contributing to improving Communications, Navigation, Surveillance – Air Traffic Management services. In this regard, the following activities will be

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undertaken: (i) legal studies; (ii) financial studies; (iii) frequency & regulatory studies; and (iv) human resources studies. 2.1.2 Legal component i) The Legal Advisor will collaborate with his national counterparts in the affected countries in Africa and surrounding countries. The Advisor is needed on a limited basis to provide all the consultancy services for negotiating and signing some MoUs, protocols, SLA's and the contracts of manufacturing, insurance and launching process. ii) The Legal Advisor is needed to support the legal and contractual issues in the development of the SOW and finalization of the RFP. He/She is also needed to support Corporate Governance, Incorporation Plan, Market Capitalization Plan and the evaluation of the proposals submitted and final negotiations. 2.1.3 Financial component i) The Financial Advisor will need to ensure that international best practices are incorporated and adequately harmonized in financing proposals. The Advisor will support the reviewing of the business case data at the end of this phase to ensure that all information required later for raising finances are provided.

ii) The Financial Advisor is needed for the development of the Market Capitalisation Plan and the business and technical consultant will support the Financial Advisor to ensure that he/she understands the data required for his/her activities. 2.1.4 Frequency & Regulatory component i) The Advisor will support the on-going Business and Technical Studies, maintain the International Telecommunications Union (ITU) filings and Fixed Satellite Services coordination, and support NAVISAT in coordination meetings and certification processes. 2.1.5 Human Resources component i) The HR Advisor’s tasks need to satisfy the following NAVISAT Organizational Goals :

To structure the organization to reflect the infrastructure and service nature of its key roles.

To ensure an agile organization that can react to a changing market and the speed of technology changes.

To act as a Centre of Excellence for the services provided. To foster a business culture that encourages retention of human capital and

associated skills. To maximize the benefits from the NAVISAT infrastructure for future

applications. To focus on end-users and operators.

In addition, the HR Advisor has to consider the possibility to increase recruitment and training of female air traffic operators OR to develop a gender responsive HR strategy premised on elevating professional advancement and training opportunities for women.

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2.2 Expected Outputs 2.2.1 The major outputs of the study will be the production of (a) legal; (b) financial; (c) frequency and regulatory; (d) and human resources documents that will be used as main input in the implementation phase of the NAVISAT project. The study documents will also serve as an input to prospective donors for their project appraisal. At the completion of the study, stakeholders and potential promoters of the project would be identified. According to the proposed NAVISAT institutional arrangement, public and private investors from the region will constitute the NAVISAT company shareholders. For this reason, Public Private Partnership (PPP) workshops will be organized by NAVISAT and the Consultancy firm in order to sensitize the Stakeholders and solicit financial support for the proposed project. 2.2.2 The strategic shareholders (regional public and/or private investors) will be invited to join in the implementation of the project. The project implementation will involve the: finalization of the manufacturing contract; manufacturing (of the two satellites – active and standby); launching of the contract; launching; testing and operation. The duration of these activities is estimated at three (3) years. The capital expenditure (CAPEX) of the NAVISAT project is estimated at US$ 580 million. 2.2.3 Expected outputs for each of the main component of the study are shown below. 2.2.4 Legal component: 2.2.4.1 Legal Framework Report, including:

Legal Protection requirements: regional and international certification; and Intellectual property rights (IPR) protection requirements.

The necessary insurance and liability coverage requirements and likely costs to support the estimation of Capital and Operational Investment requirements.

The Company’s Governance Model; Market Capitalisation Plan; Draft Service Level Agreement (SLA); MoU’s; And Company Bylaws Review Report.

2.2.5 Financial component: 2.2.5.1 Financial report, including the following:

Recommendations on content required for financial fund raising based on review of business plan material developed in the Business Case and the Operating Model

Shareholders' Strategy Tender Documents for Funding Road-show material for fund raising Section on all activities done until the fund raising

engagements 2.2.6 Frequency and regulatory component report, including:

Initial Due Diligence Report ITU filing documentation including API documents and risk and mitigation report/plan Coordination Roadmap, including Coordination strategy and tentative plan

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NAVISAT Frequency Coordination entity, including: Organization structure, mission, duties and responsibility, human resources qualifications and skills and training required

Certification needs, regulations and standards 2.2.7 Human resources component: 2.2.7.1 Detailed organization structure up to Level-4 in the organization (lowest level), for the selected Business & Technical scenario, including :

Functional descriptions Human resources requirements

2.2.7.2 Support Report for the Technical and Business detailed Study, including :

Manpower plan including HR Priority Recruitments Job descriptions and slot jobs for the required job families Job Evaluation Compensation and Benefits Benchmarking Report in the Egyptian market, and other

markets Pay Scale Structure, inclusive of grade wise benefits Cost Model, including Sensitivity Analysis Report and Impacts on the Revenue

3. COST AND FINANCING OF THE STUDY

3.1 Study Cost The cost estimates for these studies are provided in Table 1 below. The total estimated cost is about $ 1,009,008 (all in foreign exchange) equivalent to UA 655,200. A 5% price contingency has been built into the cost estimates Table 1: Study Cost Estimates

US$ UA COMPONENT FC LC TOTAL FC LC TOTALLegal Studies 182,000 182,000 118,182 118,182 Financial Studies 293,000 293,000 190,260 190,260 Frequency & Regulatory Studies

404,960

404,960 262,961 262,961

Human Resources Studies 81,000 81,000 52,597 52,597 Total base cost 960,960 960,960 624,000 624,000

Price Contingencies (5%)

48,048

48,048 31,200 31,200 GRAND TOTAL 1,009,008 1,009,008 655,200 655,200

3.2 Financing Plan The total cost includes a MIC grant allocation of UA 600,000 under the MIC Technical Assistance Fund (TAF) and the national counterpart of UA 55,200. The MIC TAF will finance 92% of the total cost of studies while 8% will be borne by the Government of Egypt contribution which will cover mainly expenses for the study team, dissemination of

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reports, annual audit and workshop organization, etc. that would be reflected in the Agreement. Table 2 below present estimated project costs by financing source.

Table 2: Estimated cost by financing source

US$ UA Financing Source F.C. L.C. Total F.C. L.C. Total

%

ADB 924,000 924,000 600,000 600,000 92 GoE 85,008 85,008 55,200 55,200 8 Total 1,009,008 1,009,008 655,200 655,200 100

4. IMPLEMENTATION OF THE STUDY

4.1 Executing Agency

4.1.1 The Government of Egypt (GoE) is the beneficiary of the MIC technical assistance grant. The Ministry of Civil Aviation through its NAVISAT project team will be the Executing Agency.

4.1.2 The NAVISAT Project team under the Ministry of Civil Aviation will be responsible for the management and supervision of the studies and for reporting to the MIC fund on its implementation. The team will also work closely with focal points in the Ministry of Civil Aviation. Key persons in the team will be the Project Manager who will manage the day-to-day activities of these studies. In addition, the team should include a qualified accountant who will be responsible for financial control and quarterly reporting.

4.2 Implementation Schedule The duration of the project study is estimated to last for six (6) months after the procurement of the consulting firm and the contract is awarded. The indicative timeframe is presented below.

Table 3: Indicative implementation plan Activity Indicative date Responsibility Bank’s Approval 6 May 2009 ADB MIC Grant Signature 14 May 2009 ADB & GoE Issue of Expression of interest (EOI) 16 May 2009 GoE Bank’s approval of shortlist of firms 31 May 2009 ADB Issue of Request for proposals 1 June 2009 GoE Receipt of proposals 30 June 2009 GoE Evaluation of proposals 2 July 2009 GoE Bank’s approval of bids evaluation 10 July 2009 ADB Negotiation and Contract Award 15 July 2009 GoE Commencement of work 30 July 2009 GoE Inception report 30 Aug 2009 GoE NAVISAT and Bank’s comments 15 Sep 2009 ADB & GoE Stakeholders workshop 30 Sep 2009 GoE Final detailed Reports 31 Oct 2009 GoE

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4.3 Supervision and Monitoring 4.3.1 During the study period, the NAVISAT team will prepare and forward to the Bank through the Task Manager Quarterly Progress Reports highlighting the status of activities, disbursements made and anticipated, problems encountered and solutions envisaged, as well as the projected program for subsequent quarters. The first Quarterly Progress Report shall be submitted to the Bank three (3) months after the grant has been declared effective. 4.3.2 The Bank will monitor the implementation of the project through reviews of key outputs of the study (Inception Report, Interim & Final Reports).

5. FINANCING ARRANGEMENTS

5.1 Disbursement

The disbursement of the grant will be through direct payments to the consultancy firms in accordance with the Disbursement Hand Book guidelines. The payment of the consultancy firm services will be done according to the deliverables agreed upon in the contract. In sum, the cumulative payment shall reach 100% at the end of the consultancy firm services. All disbursements will follow the procedures and standard supporting documents outlined in the Bank’s Disbursement Hand Book.

5.2 Suspension of Disbursement The disbursements from the MIC funds will be governed by the Bank’s disbursement regulations, in particular, the rules related to suspension of disbursements.

5.3 Letter of Agreement Following the approval of the grant proposal by the Bank, the authorized representatives of the Bank and the Government of Egypt will sign a Letter of Agreement in line with the Guidelines for the Administration and Utilization of the Middle Income Countries Technical Assistance Fund.

6. PROCUREMENT 6.1 The procurement of consulting services for the studies will be undertaken on the basis of a shortlist of qualified firms, in accordance with the Bank’s Rules of Procedure for the Use of Consultants. The NAVISAT project team will be assisted by the ADB

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Egypt Country office Procurement Assistant in the recruitment process of the consulting firms. The selection procedure will be based on Quality-and-Cost Based Selection (QCBS). 6.2 Documents to be approved by the Bank during procurement

i) General and Specific procurement notices ii) Short-list of consultancy firms iii) Letter of invitation to Consultants (RFPs) iv) Technical and Financial/Final evaluation reports v) Draft contracts, if these have been amended from the drafts included in the

tender invitation documents vi) Amendments to the signed contracts, if any. vii) TOR for annual audit

6.3 For the procurement of services estimated to cost UA 200,000 and above, an announcement shall be published in the UN Development Business (UNDB online) and Bank’s website. For the procurement of services below UA 200,000, the announcement shall be published in local and regional newspapers. 6.4 The procurement of external auditing firm to carry out annual auditing of the project accounts will be undertaken following national procedures since this component will be financed from Government of Egypt contribution.

7. CONCLUSIONS AND RECOMMENDATIONS 7.1 Considering the problems encountered in Africa regarding air navigation safety, which result from the region difficult terrain; lack of adequate aviation safety facilities; and the urgency to implement the International Civil Aviation Organization (ICAO) strategy regarding air safety aimed at addressing the challenges of the expected air traffic increase, the acquisition of the proposed CNS/ATM new system is considered as most promising and responsive approach in this region. 7.2 In this regard, the Government of the Arab Republic of Egypt plans to contribute to improving Communications, Navigation, Surveillance – Air Traffic Management services in Africa by using cost effective satellite system for supporting communication and navigation functions on a global scale for safer and enhanced air navigation. The improved system will constitute an important enabler for regional integration. For the project to be successfully designed and implemented, feasibility studies, including legal, financial, frequency and regulatory and human resources components of the new system, would be required. Hence, the request of Egypt for the Bank to finance these studies to prepare for this proposed project. 7.3 At the completion of these studies, Egypt intends to use the studies’ outputs to attract public and private investors from the region. All stakeholders including the Bank and potential promoters of the project would be identified. Public Private Partnership (PPP) workshops will be organized by the Government and the Consultancy firms. The objective would be to present the findings and recommendations of these studies and also sensitize the stakeholders on the proposed project for resource mobilization.

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7.4 In order to implement the proposed project, the Government of Egypt should recruit consultancy firms, once these studies are completed, to prepare the tender documentation to proceed directly to the implementation stage. The co-sponsors will be mindful of environmental and safety requirements regarding their own internal policies and due diligence and will make themselves alert to legal/environmental requirements of any potential funding agency, or RMC legislation. 7.5 Based on the foregoing, it is recommended that a grant not exceeding UA 600,000 from the ADB MIC Technical Assistance Fund be extended to the Government of the Arab Republic of Egypt for the purpose of co-financing the above mentioned feasibility studies aimed at facilitating the implementation of the proposed NAVISAT project as described in this memorandum.