CAIRO: In a bid aiming to flourish public sector companies and boost their participation in the Egyptian economy, the Ministry of Investment is creating a comprehensive plan for restructuring 124 public sector companies within 9 months, said Ashraf Salman, the Minister of Investment, Mubasher reported Tuesday.
The plan is addressing three main aspects represented by making use of the companies’ marginalized assets along with curing the companies’ management faults and following up with the rate of progress repeatedly, he added, pointing out that, the ministry has directed the Egyptian Financial Supervisory Authority ‘s 60 financial advisors to examine financial situations.
Through the comprehensive plan, the Ministry is set to offer the 124 public sector companies in the Egyptian Stock Exchange during the forthcoming period as a step for providing the needed financing for providing the raw materials and equipment along with paying the due debts and developing production lines, he said.
The companies with the worst financial situations will top the ministry’s priority list to be restructured, he said, pointing out that the Egyptian Iron and Steel Company (HADISOLB) and the Nile Match and Pre-Fabricated Wooden Houses Company will be among the first.
The 124 public sector companies plus the 693 companies of the business sector represent 15.5 percent of the Gross Domestic Product.
Head of the Federation of Economic Development Associations Fouad Thabet told The Cairo Post in a phone interview Wednesday that “restructuring the public sector will greatly impact promoting national economy along with preventing monopolies through balancing between the public and private sectors.”
“Starting with restructuring (HADISOLB) reflects the government’s trend to prevent the private sector monopoly through providing alternative products and balancing the market,” Thabet said referring to the 150 EGP price hike in steel after Eid without justification.
As far as providing the needed funds of restructuring is concerned, Thabet stated that besides offering tangible part of the companies in the EGX, the government may offer public sector companies for participation from investors (privatization principles), but the government should keep 51 percent of the share to run the companies as a step for avoiding monopolies.
“Restructuring the sector may hike its participation in national economy by 25-30 percent especially that a company like the HADISOLB was producing 1 billion EGP worth of steel annually before it was bankrupt,” he said.