• Reference: P-EG-GC0-001
• Approval date: 20/05/2009
• Start date: 20/05/2010
• Appraisal Date: 06/05/2009
• Status: OngoingOnGo
• Implementing Agency: MINISTRY OF CIVIL AVIATION BUILDING
• Location: African Continent

2.1 Study Design and Formulation 2.1.1 The study will involve the procurement of the services of consulting firms to undertake the following studies (legal, financial, frequency regulatory, human resources) aimed at contributing to improving Communications, Navigation, Surveillance - Air Traffic Management services. In this regard, the following activities will be

4 undertaken:

(i) legal studies;

(ii) financial studies;

(iii) frequency regulatory studies; and

(iv) human resources studies. 2.1.2 Legal component

(i)The Legal Advisor will collaborate with his national counterparts in the affected countries in Africa and surrounding countries. The Advisor is needed on a limited basis to provide all the consultancy services for negotiating and signing some MoUs, protocols, SLA's and the contracts of manufacturing, insurance and launching process.

(ii)The Legal Advisor is needed to support the legal and contractual issues in the development of the SOW and finalization of the RFP. He/She is also needed to support Corporate Governance, Incorporation Plan, Market Capitalization Plan and the evaluation of the proposals submitted and final negotiations. 2.1.3 Financial component

(i)The Financial Advisor will need to ensure that international best practices are incorporated and adequately harmonized in financing proposals. The Advisor will support the reviewing of the business case data at the end of this phase to ensure that all information required later for raising finances are provided.

(ii)The Financial Advisor is needed for the development of the Market Capitalisation Plan and the business and technical consultant will support the Financial Advisor to ensure that he/she understands the data required for his/her activities. 2.1.4 Frequency Regulatory component

(i)The Advisor will support the on-going Business and Technical Studies, maintain the International Telecommunications Union (ITU) filings and Fixed Satellite Services coordination, and support NAVISAT in coordination meetings and certification processes. 2.1.5 Human Resources component

(i)The HR Advisor's tasks need to satisfy the following NAVISAT Organizational Goals: ¢ To structure the organization to reflect the infrastructure and service nature of its key roles. ¢ To ensure an agile organization that can react to a changing market and the speed of technology changes. ¢ To act as a Centre of Excellence for the services provided. ¢ To foster a business culture that encourages retention of human capital and associated skills. ¢ To maximize the benefits from the NAVISAT infrastructure for future applications. ¢ To focus on end-users and operators. In addition, the HR Advisor has to consider the possibility to increase recruitment and training of female air traffic operators OR to develop a gender responsive HR strategy premised on elevating professional advancement and training opportunities for women.

5 2.2 Expected Outputs 2.2.1 The major outputs of the study will be the production of (a) legal; (b) financial; (c) frequency and regulatory; (d) and human resources documents that will be used as main input in the implementation phase of the NAVISAT project. The study documents will also serve as an input to prospective donors for their project appraisal. At the completion of the study, stakeholders and potential promoters of the project would be identified. According to the proposed NAVISAT institutional arrangement, public and private investors from the region will constitute the NAVISAT company shareholders. For this reason, Public Private Partnership (PPP) workshops will be organized by NAVISAT and the Consultancy firm in order to sensitize the Stakeholders and solicit financial support for the proposed project. 2.2.2 The strategic shareholders (regional public and/or private investors) will be invited to join in the implementation of the project. The project implementation will involve the: finalization of the manufacturing contract; manufacturing (of the two satellites - active and standby); launching of the contract; launching; testing and operation. The duration of these activities is estimated at three (3) years. The capital expenditure (CAPEX) of the NAVISAT project is estimated at US$ 580 million. 2.2.3 Expected outputs for each of the main component of the study are shown below. 2.2.4 Legal component: 2.2.4.1 Legal Framework Report, including: ¢ Legal Protection requirements: regional and international certification; and Intellectual property rights (IPR) protection requirements. ¢ The necessary insurance and liability coverage requirements and likely costs to support the estimation of Capital and Operational Investment requirements. ¢ The Company's Governance Model; Market Capitalisation Plan; Draft Service Level Agreement (SLA); MoU's; And Company Bylaws Review Report. 2.2.5 Financial component: 2.2.5.1 Financial report, including the following: ¢ Recommendations on content required for financial fund raising based on review of business plan material developed in the Business Case and the Operating Model ¢ Shareholders' Strategy ¢ Tender Documents for Funding ¢ Road-show material for fund raising Section on all activities done until the fund raising engagements 2.2.6 Frequency and regulatory component report, including: ¢ Initial Due Diligence Report ¢ ITU filing documentation including API documents and risk and mitigation report/plan ¢ Coordination Roadmap, including Coordination strategy and tentative plan

6 ¢ NAVISAT Frequency Coordination entity, including: Organization structure, mission, duties and responsibility, human resources qualifications and skills and training required ¢ Certification needs, regulations and standards 2.2.7 Human resources component: 2.2.7.1 Detailed organization structure up to Level-4 in the organization (lowest level), for the selected Business Technical scenario, including: ¢ Functional descriptions ¢ Human resources requirements 2.2.7.2 Support Report for the Technical and Business detailed Study, including: ¢ Manpower plan including HR Priority Recruitments ¢ Job descriptions and slot jobs for the required job families ¢ Job Evaluation ¢ Compensation and Benefits Benchmarking Report in the Egyptian market, and other markets ¢ Pay Scale Structure, inclusive of grade wise benefits ¢ Cost Model, including Sensitivity Analysis Report and Impacts on the Revenue

1.2.1 The sector goal of the study is to contribute to improving Communications, Navigation, Surveillance - Air Traffic Management services that would provide cost effective satellite communications and major improvements in the aeronautical services, thus enhancing safety and efficiency of air transport. The objective of these studies (legal, financial, frequency regulatory and human resources) are to determine the feasibility of a Satellite-based Air Navigation and Safety Communications System.

The implementation of the NAVISAT project will offer highly reliable aeronautical telecommunication services over Africa and some surrounding countries. The benefits of this project are multiple and cover institutional, technical, economical and social aspects. The following are some of the major benefits: 1.3.2 For all African and surrounding Countries: ¢ Cost saving of navigational aid ground equipment installation and maintenance; ¢ Increase of traffic (more secured airspace will lead to more users) resulting in additional Air Traffic Control (ATC) centres revenues; ¢ The system will not overload states with extra costs as the ATC service provider (as a user) will pay only the rental value of the received services; and ¢ Low cost service (light infrastructure). 1.3.3 For all Airlines: ¢ Reduction of delays and detours (due to application of Automatic Dependent Surveillance (ADS) support) resulting in reduced fuel consumption, aircraft maintenance cost, crew charges, etc.; ¢ Airlines as a user will pay only for the exact amount of services they received (cost per Kb/s) compared to the current situation in which airlines are charged for distance/time/weight/type of aircraft flown over a particular country airspace; and ¢ Relatively low cost of services as a result of applying the multi-mission concept; and no investment for avionics (Sat Com) for already equipped aircraft. Above all, the project will improve safety for air traffic in the continent resulting from the high quality of services (availability, reliability, integrity), global coverage and the overall monitoring of flights over the region. 1.3.4 This intervention is consistent with the Bank's Medium term strategy 2008-2012 which requires the Bank to direct a significant proportion of its new commitment to infrastructure. It is also in line with the current Bank's Country Strategy Paper (CSP) for Egypt which identifies support to infrastructure development, including transport infrastructure, as one of its main pillars. The intervention further falls under pillar 1 of the Bank's ICT Operations Strategy which focuses on development of broadband telecommunications infrastructure.

3 For all Airlines: ¢ Reduction of delays and detours (due to application of Automatic Dependent Surveillance (ADS) support) resulting in reduced fuel consumption, aircraft maintenance cost, crew charges, etc.; ¢ Airlines as a user will pay only for the exact amount of services they received (cost per Kb/s) compared to the current situation in which airlines are charged for distance/time/weight/type of aircraft flown over a particular country airspace; and ¢ Relatively low cost of services as a result of applying the multi-mission concept; and no investment for avionics (Sat Com) for already equipped aircraft. Above all, the project will improve safety for air traffic in the continent resulting from the high quality of services (availability, reliability, integrity), global coverage and the overall monitoring of flights over the region.

JACK Salieu - OITC2

Finance source	Amount
MICF	UAC 600,000
Government	UAC 55,200
Total	UAC 655,200