Evaluation of the industrial production project and other industrial sector programs

Special evaluation covers an undetermined period and is based on document review, site visits, and interviews with project implementors. The IPP has not achieved its objectives. Major problems exist in execution; some elements need to be restructured. The managerial resources of the Government of Egypt (GOE), individual company chairmen, and USAID have been drained by the IPP because none of the subprojects have been implemented. When the IPP was first designed there was no clear strategy for industrial development. There was a need for industrial plant and equipment rehabilitation, but no plan on how best to apply IPP resources. There was an incomplete assessment of problems confronting Egyptian industries which led to such a general statement of IPP goals that it was unclear where resources should be allocated. Efforts expended on building institutional capacity often detracted from providing service and equipment directly to individual companies. Unclear design led to four major components not being effectively linked to each other, each component wound up as an end in itself. The training component, for example, was not linked to either the environmental or the capital assistance components, except by subject matter. Four IPP components were implemented by three separate contractors, but there was no avenue for coordination among them. Key decisionmakers' roles were inadequately defined and often contributed to role conflict. As a result of decisionmakers' conflicts, the needs of the public sector companies were neglected. None of the key decisionmakers was aware of what the other decisionmakers did for the IPP. By emphasizing dissimilarities, the groups' communications were inhibited; procedures rather than results not only became more important but also crowded out investment decisionmaking. Project strengths include: a better awareness of the problems facing Egypt's industrial sector, experience in conducting feasibility studies, more discussion of structural reform, and greater experience in procedural issues.