Privatization program progressing on schedule
Egypt, Economics, 7/17/2001

Has the privatization program come to a stop given the price decline in the stock exchange, the slackness period and liquidity shortage faced by the Egyptian economy? what are the social implications of privatizing 187 companies up till the end of last June? what are the losses incurred by buyers of the shares of public business sector companies?.

Attempting to answer these queries, Mahmoud Salem, Chief technical office of public business sector, said that the privatization program is proceeding ahead as planned, adding that the general assembly of the holding companies for spinning, weaving and ready-made-clothes agreed recently to sell assets of the Arab carpet company in Damanhour at LE 51.1 million to the Wakfs Organization, under the sales agreement, he said, the company's labor will be completely retained.

Elaborating, he noted that there are other companies in the final stages of privatization whether by examining purchasing offers or by opening closed tenders. He said a program has been carried out for rehabilitating the public business sector labor which is currently put at 496,000 workers compared to 1,700,000 in the year 1991/1992.

Salem added that there is a full-dressed plan for privatizing foreign trade companies abroad, coupled with a plan for benefiting from offices of those companies in the friendly African states. he said that more than 10 companies are on their way to privatization, such as Misr hotels company, misr company for import and export, El-Nasr glass company, Eastern Tobacco Company, adding that consumer cooperatives are about to be privatized or rented.

Facts and Figures Salem pinpointed that figures show that the majority of the shares of 38 companies have been sold in the stock exchange, besides 26 companies whose shares have been sold to key investors as well as 30 companies, the majority of whose shares have been sold to the share holder unions.

On the level of quality after privatization, Salem said that the majority of companies which have been sold to key investors or through the stock exchange have undergone major much development, adding that an output increase has been remarkably witnessed by these companies, a matter which led to minimizing importation.

Commenting on reports that shares of the public business sector companies have backtracked in the stock exchange, he said that the market value of these companies which have been privatized through the stock exchange has increased by LE 7.6 billion during the period extending from 1994/1997.

He said that prices declined during the past two years for purely economic reasons for which the public business sector bears no responsibility.

He advised citizens not to dispose of their shares as the public business sector companies are achieving an investment return of 25 per cent.

Salem added that the privatization program has had no negative effects as figures show that 75 per cent of the companies which have been privatized have achieved profits and 65 other companies increased their sales. He expounded that the average salary of labor in these companies rose by 90 per cent.

There is a plan for privatizing consumer cooperatives through the holding company for foodstuffs, as the private sector is capable of running these units, Salem noted.

The public business sector no longer needs to resort to early retirement as the ideal number of labor has reached 496,000 in 193 public companies, he added.

On the same plane, Salem pointed out that the early retirement experiment was previously needed for tackling previous mistakes as large numbers of appointed labor was carried out far from any technique of modern management.

Salem further expounded that the privatization of foreign trade companies would not affect the competitive position, adding that the public business sector is currently interested in qualifying labor's marketing skills, an Egyptian report said.

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