Jan 02 2007 |
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Controversy plagues privatization
The privatization programme witnessed its busiest year in 2006, including the long-promised divesture of Bank of Alexandria (BoA) ; a successful fifth attempt to sell Omar Effendi ; the sale of state-owned stakes in joint venture banks; and selling government land to private investors. The fiscal year 2005/2006 witnessed 49 privatisation transactions that netted LE14.2 billion. The transactions were either to anchor investors or stakes in joint venture companies or land.While 2006 did not break the record with regards to the number of companies divested, it was the most controversial in the drive towards privatisation. Topping these controversies was the final sale of Omar Effendi to the Saudi Anwal group . First, a member of the evaluation committee accused the minister of investment of squandering public money for accepting a low bid; then the Saudi-based Egyptian businessman Saeed El-Hanash apparently proposed to buy the mega-store for double Anwal 's offer; but El-Hanash's bid turned out to be bogus and the historic department store finally landed in Anwal 's lap.
Other sales took place amid direct accusations against officials of misusing their power. Both Minister of Transport Mohamed Mansour and Housing Minister Ahmed El-Maghraby were accused of pushing for the acquisition of the Egyptian American Bank (EAB) by the French Crédit Agricole , now known as Calyon . This is because the two ministers are board members of the French banks, and many felt the deal was undersold.
On the other hand, the sale of BoA was smooth and since it sold higher than expected at $1.6 billion, there was a sense that the government did not sell out on the deal.
In April, it was announced that there are 97 companies of diverse financial portfolios for sale. These included loss-making entities such as the tire-maker Trenco; strong companies with previously floated stakes such as Alexandria Mineral Oils Company (AMOC) and Sidi Kerir petrochemicals (SIDPEC) ; the last state-owned cement company National Cement; and an insurance company.
© Al Ahram Weekly 2007
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