COMMUNICATION-EGYPT: And Now a Silicon Oasis

By Cam McGrath Reprint | | Print |

Cam McGrath

CAIRO, Jul 16 2002 (IPS) - Egypt’s dream of establishing itself as a regional hub for information technology moved a step closer to reality when 12 investors joined the ambitious ‘Smart Village’ project Monday.

“The Smart Village is a symbol of the national programme to develop information technology (IT) and to penetrate global markets,” minister for communications and information technology Ahmed Nazif said at the signing ceremony. “It will help turn Egypt from a society that consumes IT into one that exports it.”

Construction teams are converting 300 acres of desert land 30 kilometres northwest of Cairo into a state-of-the-art communications infrastructure that will include VPN (virtual private network) connections and VoIP (Voice over Internet protocol) capability – with uninterrupted power supply.

When completed in 2005, the Smart Village will consist of 54 corporate buildings, a convention centre, an exhibition hall, a business centre, a shopping mall and a four-star business hotel. Glass buildings with curvaceous designs will take 10 per cent of the land; the rest will be landscaped greenery.

Officials hope this silicon oasis will attract private sector IT and telecommunications companies, particularly multinationals looking for a regional office. As an incentive, the government is offering firms a 10-year tax holiday and freedom from administrative hurdles.

Twelve investors have signed up. They will invest 56 million dollars and take up 15 per cent of building space. The companies include Alcatel Egypt which signed a 10-year lease for its Middle East regional headquarters.

Al-Ahly Telecom, ECG, LinkdotNet, Raya Academy, Systel, ADCOM and Middle East News Agency (MENA) have all agreed to take up space at the centre. MENA will also build and operate a press centre.

The Smart Village aims to bring like-minded people together in a suitable environment for creativity and productivity, says Ali el-Hefnawy, chairman of the Smart Village Development Company (SVDC). “Companies can integrate and complement various fields of business, enabling new alliances and partnerships,” he says.

The SVDC was established last year with a capital of 21 million dollars to develop and manage the Smart Village. The government has 20 per cent share in the company in the form of the land, while 50 private investors have the remaining 80 per cent. The Smart Village is the first of three IT zones planned in Egypt.

The SVDC is also playing down the absence of heavyweight IT firms it had hoped to attract. Compaq, Microsoft, Oracle, Cisco and Qualcomm all signed memoranda of understanding last year to buy plots in the village, but have not taken decisions yet.

A spokesperson for Compaq Egypt said the company is still considering a move “provided that the conditions are right.”

IBM, which recently established its Egyptian headquarters close to the Smart Village is in no hurry to move again. “It’s a great idea for the country, but we’d like to see it operational first,” says Amr Tawfik, general manager of IBM Egypt.

For Egypt’s NTC (National Telecommunication Corporation) the advantages are clear. The company has agreed to establish a data centre there and build a fibre link to its 200 servers in neighbouring 6th of October City. “Like the air-conditioning, all data storage and hosting will be provided centrally,” says company chairman Hussein el-Kholy.

But the Smart Village is more than just silicon and binary. “Whenever you have a group of similar interests, you bring business together,” says Kholy. “Look at Silicon Valley for instance. In the Smart Village, people with the same ideas and aspirations will eat, work and play together.”