UPDATE 1-Consultants say Egypt needs $120 bln inflow over 4 years - officials
* $30 billion a year needed for investments, foreign reserves - consultants
* Conference of donor countries, lenders to convene by end of year
* Consultants propose reform of state-run media, textile sectors (Adds minister's denial, IMF comment)
By Mirette Magdy and Stephen Kalin
CAIRO, July 16 (Reuters) - Western consultants helping Egypt compile an economic reform plan say it needs at least $60 billion of investment to reach average GDP growth of 5 percent by 2018 and the same amount again to bolster its foreign reserves, senior officials said.
The Egyptian officials said the country would seek dollar-denominated investments and loans from local and foreign investors, foreign governments and international lenders to fill the gap at a donor conference slated for the end of the year in Egypt.
Finance Minister Hany Kadry Dimian disputed the idea that Egypt would need the amount cited by the three senior officials and confirmed by a fourth source who had seen the consultants' report. But Dimian did not provide alternative figures.
The International Monetary Fund is expected to attend the conference and has discussed the possibility of extending a loan to Egypt, one official said.
"The prescription which Lazard put forward is not very different from the prescriptions of the IMF", said another official, which would suggest a deal could be reached quickly.
The officials, who requested anonymity due to the confidential nature of the plan, spoke to Aswat Masriya, a news website run by the Reuters Foundation which promotes independent journalism in Egypt.
Reuters reported last month that international investment bank Lazard and U.S. consultancy Strategy& were drawing up plans to reshape Egypt's economy that could be used as the basis for reopening talks on a loan agreement with the IMF.
Such a deal could help kindle confidence among foreign investors who have been unnerved by three years of turmoil and a host of other problems including costly energy subsidies and a lack of transparency in economic management.
Just a month into office, President Abdel Fattah al-Sisi's government has enacted a series of subsidy cuts and tax hikes resembling IMF-type austerity measures which the officials said were part of the consultants' plan.
The IMF has discussed the loan with officials from the United Arab Emirates, a top Egyptian businessman familiar with the situation said.
The IMF declined to comment on the possibility of reaching a deal on a loan to Egypt. But it has previously said it was open and eager to restart negotiations which ousted Islamist President Mohamed Mursi, who was unwilling to impose unpopular reforms, had failed to conclude.
Christopher Jarvis, the IMF's mission chief for Egypt, called the measures to cut subsidies and raise revenues "a home-grown plan and an important step forward."
The Egyptian businessman said the UAE - the driving force behind the consulting project - had also sought advice on the economic reform plan from former PIMCO chief executive officer Mohamed El-Erian, who have made recent trips to both countries. El-Erian declined to comment.
Asked about El-Erian, a source in the UAE familiar with the matter said: "He is one among many experts and organizations who are advising on a number of ideas and best practices under discussion."
Prior to the 2011 revolt that ousted former president Hosni Mubarak, direct investment in Egypt came to $8 billion a year. In fiscal 2012-2013 the country drew in just $3 billion of foreign investment. Egypt's GDP stood at $262 billion in 2012, according to World Bank data.
The UAE wants to ensure aid and investments are spent efficiently in a country where past leaders with military backgrounds have often mismanaged the economy.
The UAE, Saudi Arabia and Kuwait have extended a lifeline exceeding $12 billion in cash and petroleum products to help Egypt stave off economic collapse since Mursi's ousting last July.
Saudi Arabia's King Abdullah called for "friends and brothers" to attend a donor conference for Egypt following Sisi's election in May.
The final date for the conference has not yet been set, but Egypt's planning minister Ashraf al-Arabi said it "will certainly be held in Egypt before the end of the year."
Egyptian officials said Saudi Arabia and the UAE had been preparing for the conference since at least April.
They said Egypt expected its Gulf allies - who see the country as the frontline in the battle against Mursi's outlawed Muslim Brotherhood - to offer investments and petroleum products rather than cash transfers.
Saudi Arabia and the UAE promised to give "aid to Egypt without a ceiling", one of the officials said.
Cash transfers from the Gulf states have helped shore up Egypt's foreign currency reserves in recent months, which reached $16.687 billion in June.
But reserves are still nearly half the level seen before the 2011 uprising against Mubarak as political turmoil has hit tourism and foreign investment.
The officials declined to comment on the investment opportunities that Egypt was presenting to potential donors, but they said consultants from Strategy&, formerly called Booz & Company, had drawn up plans for restructuring the state-run media and textile sectors.
Strategy&, owned by Price Waterhouse Coopers, and Lazard declined to comment. Egypt's central bank, which manages foreign reserves and participated in drafting the economic reform plan, also declined to comment. (Additional reporting by William Maclean in Dubai and Anna Yukhananov in Washington; Writing by Stephen Kalin; Editing by Michael Georgy and Hugh Lawson)
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