Wednesday, February 27, 2013

The Case for Leasing the Sphinx

I will try to convince you why the proposal (in Arabic) put together by a citizen is a great one that  we should actually implement. I read the proposal as a Public-Private Partnership (PPP) project, where the government hands over the administration of some tourist destinations to a private company and receives $200 billion over 5 years.

First, it's a sweet financial proposition. In the record year of 2010, Egypt received 14.5 million tourists and generated $12.5 billion. Current levels of revenue from tourism are, of course, way lower. So the $200 billion over five years, means a sweet $40 billion per year. I don't know about you, but any financial proposition that uses existing assets to generate ~4x the revenues (of Egypt's record year of revenues from tourism) AND requires no investment is usually a good one.

Second, clearly the argument that by doing that "we would be selling our heritage" is irrational. The government already does this for practically anything else: from leasing vast swaths of land in the desert for oil companies to excavate and search for oil to partnering up with private companies to build and operate everything from roads to power plants to hospitals. Any PPP project will always grant the government the right of oversight and ability to terminate the agreement in case of violation of terms. So in case you are worried someone will lease the Sphinx and then paint it red: don't worry.

Finally, the government clearly sucks at this. Spain a country of a similar size, similar weather and within the same geography got 60 million tourists in 2010 (4x the number for Egypt) and generated $80 billion (6x the number for Egypt). Granted that the lower number of tourists isn't exclusively the fault of the government, having personally visited both the Pyramids and AlHambra, I can attest that better management = happier tourists = more tourists.

So yeah, my vote is a strong yes to leasing the hell out of the Sphinx. I just hope that the operating company will allow me to bungee jump from the top of it wearing a shinny Google Glass

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