Gov’t nears trial runs at three strategic warehouses, eyes four more with private partners

The government is closing in on trial operations at its first three strategic warehouses in Fayoum, Suez, and Luxor and is studying offering four more to the private sector, a senior government official tells EnterpriseAM. The expansion is part of a push to boost food security and protect the country from sudden jumps in global commodity prices.

Bigger reserves would give the state more breathing room in a year when oil spiked past USD 126 a barrel and regional tensions kept shipping through the Red Sea under pressure, both of which can drive up the cost of the wheat and staples Egypt imports.

The first three warehouses are nearing completion. Fayoum finished construction in April 2026 and is now in trial operations; Suez and Luxor are 85% done, per ITDA. The plan is to finish testing and fit-out there before the end of the year while work on the Suez and Luxor warehouses wraps up, the source says. All three would then move from trial runs to full commercial operation.

Four more warehouses are on the table. The government is preparing the second phase for investors, the official says, with four new warehouses to be offered under public-private partnerships. The extra space would let the state stock up on wheat and other staples for longer and soften the hit to the import bill when global prices spike. It would also let the market absorb more local produce during harvest season, so farmers and producers aren’t forced to sell below cost, and leave less room for monopolistic practices, the official says.

That would round out a plan four years in the making. When the Supply Ministry signed the first contracts in 2022, it planned seven strategic warehouses nationwide and said the first batch would stretch the country’s reserves of basic goods to nine months from six. National storage capacity stood at 5.4 mn tons across 44 silos and other units at the time, as we’ve reported.

The 2022 contracts covered four warehouses, including one in Sharqia, which doesn’t feature in the current phase. Sharqia is now among the governorates the Suez warehouse is meant to serve. Construction was expected to take 20-30 months back then, so the project is running well behind schedule.

What the first three look like: Each warehouse holds 75k pallets (standard storage slots for packaged goods, each typically carrying 0.5-1 ton), or roughly 37k-75k tons of goods, for a combined 225k pallets, or about 110k-225k tons, by our math. Each serves a cluster of nearby governorates:

• Fayoum (Orascom Construction; construction finished in April 2026) covers North Upper Egypt: Fayoum, Beni Suef, and Minya.
• Suez (Samcrete) covers the Canal and Sinai region: Port Said, Suez, Ismailia, Sharqia, North Sinai, and South Sinai.
• Luxor (Hassan Allam) covers South Upper Egypt: Luxor, Aswan, and the Red Sea.

Most of the space is for dry goods (95%), with 4.5% chilled and 0.5% frozen. The sites range from about 9.1 feddans in Fayoum to 13.3 feddans in Suez.

Each warehouse now costs more than double the EGP 1 bn cap set when the first contracts were signed in 2022. The three cost a combined EGP 6.64 bn (c. USD 124 mn), according to ITDA: EGP 2.24 bn for Fayoum, EGP 2.3 bn for Luxor, and EGP 2.1 bn for Suez. Costs have also climbed since the companies got their golden licenses. Fayoum is up about 70% from the EGP 1.3 bn on its 2023 license, and Luxor is up about 50% from EGP 1.5 bn in 2024, by our math. Suez, licensed at EGP 1.98 bn in January 2025, nearly a year after the March 2024 float, has barely changed.

The ownership model has shifted too. When the first contracts were signed in 2022, then-ITDA chairman Ibrahim Ashmawy told us the private partners would build, operate, and maintain the warehouses, which the state would then buy. ITDA now lists a 35-year operating term for each project, and it isn’t clear whether a buyout is still part of the contract. The approach fits the new State Ownership Policy, which opens more of the economy to private investors while keeping the state’s ability to step into strategic goods and food markets to stop monopolistic practices, the official says.