Government entrusts private firms with investment projects
Egypt, Economics, 5/30/2002

The government will assign private sector companies the task of implementing investment projects with a total budget of LE20 billion. The projects are part of the National and Social Development Plan for FY 2002/2003.

Minister of Planning, Othman Mohammed Othman said that the development and recurrent budgets for these projects are derived from the state budget with an investment component of LE73 billion.

Total private sector investment in this year's budget are put at LE30 billion, whereas government investment would reach LE40 billion, and the public enterprises sector would be granted LE3 billion, the minister said.

Othman said that public sector companies would implement projects that represent 66.7 per cent of total state investments to give impetus to the national economy.

These proposed activities include projects related to industrial development schemes, building infrastructure utilities in rural areas, and public goods and services, the Minister said at a committee meeting.

The Planning Through Partnership Committee is formed of development partners that include government representatives, private sector and non-governmental organisations (NGOs).

The committee is to devise national development plans and following up their implementation.

Othman has strongly rejected claims that private sector companies will not be able to implement investment projects with a total budget of LE30 billion.

"The Egyptian private sector is capable of meeting this challenge and carrying out projects, whose budget is higher than this amount, and the committee will provide it with all technical support and consultancy services it may require for solving any problem that hinders progress."

The Minister said that the exporting sector plays a pioneering role in national development and the government's Five-Year Plan has been designed to boost exports in order to enhance this role.

The plan focuses on upgrading and modernising export-oriented industries to ensure high-quality local products that can compete in foreign markets, he said.

"Top-quality products enhances the export sector's activities and strengthens its role in developing the nation," Dr. Othman told committee members, who also discussed a new law that would be offering incentives and privileges to encourage investors to set up private economic zones.

The committee requested that these concessions be applied to all industrial investment zones.

Dr Othman said that the aim of setting up private economic zones was to promote local exports to international markets.

"It is hoped that one day these privileges will be given to all zones in Egypt."

The committee approved the setting up of six working groups to be in charge of following up implementation of the national development plan and appraising progress towards its targets.

The committee has selected two large investors to report to each group.

The newly created groups are also responsible for attracting foreign capital, removing obstacles facing local investors, encouraging small- and medium scale enterprises, promoting exports, increasing local production, and manpower development and training.

The new five-year development plan aims to increase growth rates, which have dropped by 3.5 per cent due to the nation's economic climate of the past two years, the Minister said.

The plan has been designed to reach a growth rate of 4.6 per cent, a LE415 billion GNP, and a per capita income of LE 6,020, he said.

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