“A lot of people cursed you today,” Abdul-Rahman Alla told his army officer cousin as soon as he saw him. He had waited three hours to pass the toll gate on the Cairo-Ismailia desert road, which recently came under the administration of the army-run National Railways Company.

“A lot of people cursed you today,” Abdul-Rahman Alla told his army officer cousin as soon as he saw him. He had waited three hours to pass the toll gate on the Cairo-Ismailia desert road, which recently came under the administration of the army-run National Railways Company.

Rahman explained to his cousin why some people are so angry with the Egyptian army – on top of the long waiting hours, people were shocked to find out that the tolls had been increased by 150 percent. “It seems the army is no longer content with just exploiting the country’s economic resources and increasing fuel prices!” Rahman complained.

But his cousing said the delay at the crossings had lasted only two days, and defended the military, saying it had increased tolls to confront the huge economic pressures facing the country. He also said army salaries had been reduced every month for the past eight months, to contribute to the “Long Live Egypt” fund that President Abdel Fattah el-Sisi created to collect donations for the revival of the Egyptian economy.

These justifications did nothing to calm Abdul-Rahman. The question that kept bothering him was: Why is the army allowed to turn a profit from these roads, when they are mainly under the supervision of the General Authority for Roads and Bridges?

An integral part

We put this question to Abdul-Rahman Ahmad Abdulaziz, official spokesman for the Roads and Bridges Authority, who said he could understand these concerns. “The armed forces are part of the Egyptian government, and we resorted to it because it is the only institution that has maintained its stability in the years after the 2011 revolution,” he said. “Especially because most government bodies, including the Roads and Bridges Authority, suffered administrative imbalances. We had only two options: either we leave the country in its recession or let the army intervene and take the country towards development.”

The spokesman highlighted the advantages of the army’s administration. “By doing this, the military is reducing burdens on the public budget, because it owns machinery, access to cheap labour, and state apparatuses,” he said. “Thus there will be savings, unlike if private companies do the work.”

“The contract signed between the authority and the armed forces is a great achievement for the authority because it gives us 50 percent of revenues annually,” he added. “Not only that, the ownership of the roads … will go back to the authority after 50 years.”

An army company

The National Company for the Establishment, Development, and Management of Railways is one of the companies affiliated with the Egyptian Defence Ministry. It was created by presidential decree in 1979 to “achieve relative self-sufficiency of the main needs of the armed forces in order to ease the state burden of their management.”

This was meant to help the military enter the world of business, which in itself was considered by some observers as an attempt to neutralize the army’s power in Egypt.

The company was created in 2004, and began by paving the al-Katameya-Ain Sokhna road. This was a coincidence, according to a source at the national company speaking on condition of anonymity. “The budget allocated for the construction of this road was 1.3 billion Egyptian pounds ($180 million), according to offers submitted from different companies,” he said. “But because the road was under the authority of the armed forces, they decided to create a company to construct it, and then to dissolve this company at the completion of the work.”

Then-President Hosni Mubarak ordered the company to be kept going to manage the road and benefit from its revenues for 99 years. But, according to the official, the Ismailia desert road was left without maintenance for seven years, despite the fact that there is a budget allocated for this purpose. Nevertheless, the national company was able to develop it to international standards within six months.

“The company did not seek at all to impose its hegemony on Egyptian roads,” he concluded. “But the government gave it this task, and it accepted it for the sake of the nation.”

Earlier conditions

Despite these advantages, the army’s seizure of the roads creates many dangers. This was stressed by Ridha Hajjaj, professor of urban planning at Cairo University, who argued that it risks returning Egypt to conditions from before the 1952 revolution, when corruption in the army was widespread.

“There is a fear that members of the army will get accustomed to civil life and its luxuries, especially since many in the armed forces have taken advantage of nepotism to join the armed forces’ civilian companies,” he said. “What is more dangerous is that some of the officers have started establishing subcontracting companies to administer army projects, which means there is no fair competition for private companies.”

Hajjaj estimated that the army’s administration of the desert roads means that it will control two-thirds of the Egyptian economy, instead of only a third. Egypt, he said, has effectively become a military state, where private companies and individuals need the army’s approval to make deals.

Collapse of the private sector

Economics professor Nasser Banhawy agreed with Hajjaj and explained that the army’s investment in industrial, commercial, and service sectors meant the collapse of the private sector, the terrorizing of foreign investors, and a sharp weakening of the national economy.

He also pointed out that the military can virtually make profits for free, as they do not pay customs and fees. This has destroyed fair competition in the Egyptian market, and caused the laying off of thousands of workers in both the public and private sectors. On top of this, there is a fear that the military’s defining doctrine, which is supposed to be based on defending Egypt’s borders and deterring enemies, might change as forces become preoccupied by civil projects.

As a solution, al-Banhawy proposed that the army’s civilian projects be under the supervision of regulatory authorities to control how the profits are spent. Moreover, the army should be made to pay taxes and customs on equipment used and should pay proportionate wages.