The Delay of the 'Nuclear Dabaa' Plant Program in Egypt; Disputes With Russia or Debt Pressure?
In the way of Egyptian regime president Abdel Fattah al-Sisi with his people from the first day he seized power, a Russian official called on Cairo to impose a tax on Egyptians to complete a "nuclear" project funded by Russian banks and its completion was long delayed.
Gregory Sussin, director of the Russian company implementing the "Dabaa Nuclear Reactor" project, and at a seminar for the company in Cairo on July 12, 2021, called on the Egyptian government to impose a "tax" on Egyptians, to raise $4 billion to complete funding for the construction of the project.
Ironically, Moscow has already agreed to grant Cairo a $25 billion loan to build the Egyptian reactor, equivalent to about 70 percent of Egypt's cash reserves, at a significant interest rate that raises the loan repayment to $41 billion.
While economists questioned the fate of the Russian loan, others suggested that Russia's request for a $4 billion tax was a "sign" that Egypt was failing to provide its share in project construction and initial construction.
Egyptians criticized the talk of the director of the Dabaa project of the Russian company Rosatom, and some described him as the "Russian High Commissioner" for Egypt, surprised by his interference in Egypt's affairs to the extent of demanding the government to impose a tax on the people.
Some compared his description as a high representative in Cairo, and Syrian Alexander Yevmov, Russian President Vladimir Putin's representative in Syria, described him as also the "Russian High Commissioner in Damascus."
The criticism of the "Russian High Commissioner in Egypt" coincided with a campaign of criticism of Russia on media sites in Egypt.
Also, a media campaign, in newspapers and satellite channels criticizing Moscow's position on the Renaissance Dam, and demanding a reassessment of Egypt's foreign relations with those who "failed it", including Russia.
Egypt contracted with Russia’s state-owned nuclear power company in 2015 to build four nuclear reactors.
The project costs $30 billion, 85 percent of which will be financed through a $25 billion Russian loan.
Egypt will begin paying 3 percent interest on the loan in 22-year semi-annual payments from October 2029.
Delay Not Cancellation
Despite the common interests between Cairo and Moscow, the most important of which are the weapons files, the completion of the Dabaa project is proceeding slowly but without stopping the project, because of its great importance to the regime in Egypt.
A source at the Egyptian Atomic Energy Authority, who asked not to be named, said: The project is continuing and construction has already begun and permits have been issued because it serves the interests of both Egypt and Russia.
He explained to al-Estiklal that the delay for financial reasons, and considered Sussin's claim "inappropriate," but said that this may be due to delayed appropriations.
The Russian official implicitly referred to the delay in the implementation of the plant for financial reasons, and focused on the gains that Egypt will gain from its establishment, to melt the ice resulting from Egypt's reservation on Moscow's position on the Renaissance Dam and also signing a military agreement with Ethiopia.
He further claimed that "every dollar invested in the construction of the plant will bring $1.50 in state taxes, and that every dollar entering the plant brings $4 to Egypt's national product."
Following his speech, senior sources at the Ministry of Electricity and Renewable Energy revealed that the timetable for the Dabaa nuclear plant had been delayed.
They told Al Mal newspaper on July 13, 2021, that the delay would be about two years, and that full operation would be carried out in mid-2030, instead of February 2028, attributing the cause of the repercussions of the Corona pandemic.
The sources attributed the postponement of the project schedule to Egypt's delay in issuing the start-up permit for about two years, which is expected to be issued in mid-2022 instead of mid-2020.
The new schedule includes the operation of the first and second reactors early and late 2028, the operation of the third reactor during 2029 and the fourth in mid-2030.
Hisham Hijazi, head of the nuclear fuel sector at the Egyptian Nuclear Power Plants Authority, revealed at the Russian company's seminar that on June 29, 2021, the Authority had already handed over license documents to terminal 1 and 2 units.
This was considered a "milestone" in the implementation of the project, and confirmed that the plant is being established in the right direction, to issue a building permit for the first two units.
Political Reasons
Egyptian followers considered the delay in the implementation of "Dabaa" to be related to the breakdown in relations between Egypt and Russia, pointing to Egypt's quest for rapprochement in return with America.
Egyptian intelligence chief Abbas Kamel sought to lay the foundations for this rapprochement during his last visit to Washington in July 2021.
Pro-regime politicians and media have criticized Russia's positions with Egypt despite Cairo's purchase of weapons and the construction of the Dabaa reactor for Moscow.
"Those who are not with us in the dam case are against us," they said, noting that Egypt has bought weapons from Russia and France worth billions of dollars, and they have to choose between Egypt and Ethiopia.
Al-Shorouk editor-in-chief Imadeddine Hussein explained the transmission of the Egyptian official message from Russia through the article "Those who failed us in the Security Council" on July 10, 2021.
"If there is a lesson to be learned from what happened at the Security Council meeting that discussed the issue of the Ethiopian Renaissance Dam, it is the need for Egypt to reconsider all its diplomatic relations with all countries on the basis of its position on this issue," Hussein wrote.
Russian Tourism
Another reason for Egyptian anger at the Russians is Russia's continued delay in the return of its tourists to Egyptian beaches and cities since a Russian plane crashed over sinai in 2015.
Cairo sees it as a "pressure sheet" as Egypt’s economy needs to recover through tourism.
Russia has repeatedly announced the restoration of tourism, inspected Egyptian airports, and then retreated.
The latest announcements were made on July 8, 2021, and confirmed by the Egyptian Foreign Ministry, but the date of the flights has not yet been announced.
The latest decision follows Russian quirks over the past six years since Russian tourism was banned from Egypt.
The deadline for the resumption of Russian flights was in May 2021 after Putin agreed during a telephone conversation with Sisi in April 2021 to lift the ban.
But things soon became more uncertain, when the Russian ambassador to Cairo said the flights could return by June 2021.
The Russian Deputy Prime Minister then stated that the decision to resume flights depended on the "epidemiological situation".
The editor-in-chief of Al Shorouk has repeatedly criticized Russia for the tourism file.
On November 14, 2020, he wrote, "A New Pause with the Russian Friend," attacking Moscow's pressure on Cairo with the weapon of return of its tourists.
"Do we need in Egypt to stand with the Russian friend to reassess relations and make sure that they are going normally between two countries that are really supposed to be friends?" he said.
Economic Delay
An economist at a research center, who asked not to be named, pointed to economic factors that delayed the implementation of the Dabaa reactor.
"Egypt does not have the capacity in light of the current severe economic crisis, and the increased benefits to it with a massive Russian financing loan ($25 billion)," he told al-Estiklal.
"Not to mention the safe operation of the reactor in light of the negligence and corruption in Egypt."
He noted that Egypt's external debt had increased by 21.12 percent, reaching $134.8 billion by the end of March 2021.
This compares with $111.29 billion a year ago, central bank data showed July 12, 2021.
This significant rise means that Egypt borrowed nearly three times as much from abroad in nine months as it planned to borrow in a full year, according to the 2020-2021 budget financial statement.
On December 11, 2017, Sisi and Putin signed a contract to build the Dabaa plant with a $25 billion Russian loan.
The contracts were passed by the Egyptian presidency despite reservations from the Legislative Section of the State Council, and the Republican decision on May 19, 2016 to approve the loan, came to complete the agreement "unknown" and "turnkey."
On February 6, 2016, former Attorney General Nabil Sadiq banned publication of the Dabaa agreement, putting further question marks on the agreement and the seriousness of its provisions on Egyptian national security and Egyptian sovereignty.
Dabaa and Siemens Stations
The economics expert pointed out that one of the reasons for the delay in the implementation of the Dabaa reactor other than Egypt’s high debt, is an increase in electricity estimated at 25 percent over the country's needs of three thermal plants built by Germany for Egypt.
Egypt contracted with Germany's Siemens to build three thermal power plants with a $6.7 billion loan on June 3, 2015, and is currently considering selling it to the private sector to reduce its debt.
He explained that Egypt did not need to build Dabaa reactors under the risk of nuclear safety, after providing more electricity than it needed.
Its sale since 2019 is likely to be aimed at reducing Egypt's debt in preparation for the repayment of the Russian nuclear reactor loan.
On May 27, 2019, Egyptian Electricity Minister Mohamed Shaker confirmed to Bloomberg his government's intention to sell the three power plants built by Germany's Siemens in Egypt.
"There is a relationship between the potential deal and Egypt's debt, which is rising under Sisi," the economic website Bloomberg said.
Although the Egyptian minister said that Egypt has received offers of purchase (acquisition) since 2019, Egypt has not followed the stations yet.
On August 27, 2020, Jaber al-Desouki, president of Egypt Electricity Holding Company, told “Al-Taka” website: “Egypt's sovereign fund is still studying the file on the sale of power plants carried out by Siemens of Germany”.
"The file is now in the hands of the Egypt Sovereign Fund, which is responsible for disclosing any details," he said.
The three power plants in the new administrative capital, Burles and Beni Suef provide 14.4 thousand Megawatt, and exceed Egypt's need, half of what the four Dabaa reactors will provide.
The Dabaa nuclear project with its four reactors will provide 28,000 MEGAWATTS (13 times the capacity of the high dam), according to the Egyptian Nuclear Plant Authority website.
