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Al-Ahram Weekly 15 - 21 July 1999 Issue No. 438 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 15 - 21 July 1999 Issue No. 438
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Features Travel Living Sports Time Out Chronicles People Cartoons Letters Power privatisation
THE LONG-AWAITED privatisation of Egyptian power generation and distribution companies is finally taking place. The government has announced that it will float 10 per cent of the Greater Cairo Company for Power whose assets have been valued at an estimated LE7.3 billion. The company is the biggest of the seven public power companies slated for partial privatisation this year.This is the first flotation of a utility company in the Egyptian market, and the offering is expected to be well received. "The market has to develop in terms of the depth of interest of domestic investors, and the privatisation of utilities is a good opportunity to encourage this process," Angus Blair, the head of the North Africa and Middle East division in ABN Amro's investment banking group was quoted by Reuters as saying.
Blair noted that the offering should attract local, regional and international investors at a time when the market has been narrowly focused on a few shares.
While the offering price is still not determined, the government is doing its best to solve the problems which have delayed the offering. Earlier this week, Prime Minister Kamal El-Ganzouri declared that the three-year-old dispute between the power companies and the government over debts claimed by both sides will be settled. These debts mounted to LE14 billion, about LE5 billion of which represent unpaid taxes that the power companies owe to the Ministry of Finance. The rest represents outstanding electricity bills of state entities owed to the power companies.
The Ministerial Privatisation Committee is currently working on settling these debts through clearance procedures. State bodies that owe power companies money can pay it directly to the Finance Ministry or by increasing provisions in their 1999-2000 budget to cover the unpaid electricity consumption bills.
The seven power companies have overall consolidated assets of LE51 billion. They were newly formed after a recent reorganisation of the power sector called for in a regulation issued last year. The former eight power companies, which used to be separately responsible for generation, transmission and distribution of power, were restructured, according to the terms of the regulation. The seven integrated companies are now operating in the Egyptian Electricity Authority's seven power generation zones.
