Briefs

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Fixed line licence postponed

DUE TO instability on international markets, Minister of Communications and Information Technology Tareq Kamel announced this week a decision to hold the tender for a second fixed line network. The bid was scheduled to be held on 18 September, but Kamel said the decision will be reconsidered in 2009 when international markets are more stable.

Amr Badawi, executive director of the National Telecommunications Regulatory Authority, explained that the government was keen to ask the 12 local and international companies which already had access to the bid's conditions and terms about their vision, and they all preferred to postpone the bid.

Because of recent hikes in international prices and in rates of inflation, the international telecommunications sector has over recent weeks witnessed a state of recession and a reduction of regional as well as international investments. The government found that it is better to wait, given that the investment required for the second network is over $1 billion.

Moreover, the Ministry of Communications and Information Technology preferred to postpone the bid aiming to maximise licensing revenues to the benefit of the government's budget, since the outcome will definitely look better when a larger number of giant companies join the bid.

In 2003, the government took a similar decision to postpone the third mobile network due to instability on international markets. Ultimately the result was positive when the number of bidders rose in 2006, and revenues from the licence reached LE17 billion.

Energy wrap-up

A UKRAINIAN diplomat was quoted by Egypt's state news agency as saying that the two countries are negotiating a deal to exchange Egyptian gas for Ukrainian wheat. Although no further details were given on the news item, Egypt, one of the world's largest wheat importers, has been purchasing Ukrainian wheat for several years now. This week, for example, Egypt purchased 52,500 tonnes of Ukrainian wheat in a tender. During recent years, Egypt has been keen on diversifying its wheat import sources in quest of better prices. If the deal is concluded successfully, Ukraine will purchase Egyptian gas through a pipeline which passes through Syria and Turkey and extends to the Balkans.

THE NATURAL Gas Holding Company issued a statement this week to refute an allegation by the independent daily Al-Masry Al-Yom that the state-owned MOBCO company, based in Damietta governorate will receive natural gas for $1 per British thermal unit (Btu) for the next 20 years. According to Mahmoud Latif, chairman of the company, natural gas will be sold to the company at that price only for the coming two years, as experimental operations are still taking place. "However by 2010, a new pricing formula will be imposed," said Latif who added that the new formula will link the price of gas with the international price of the final product, in this case, urea, which is hitting the $850 per tonne ceiling at present.

"In other words, if the price of urea continues as such, natural gas will be sold to MOBCO for $8.25 Btu by 2010," said Latif, adding that any expansions for the company will not include the two-year cheap gas agreement.

THREE phases of the construction of the Upper Egypt natural gas pipeline have been completed. The phases cover the areas from Dahshour to Koraymat, then Beni Sweif and south to Minya, over a length of 266km. During the final phase, the pipeline will extend further south to pass through the governorate of Assiut before it reaches to Sohag and finally to Aswan by 2009. According to Ismail Karara, first undersecretary of the Ministry of Petroleum for Natural Gas Affairs, the Upper Egypt natural gas pipeline extends over a total area of 800km from Beni Sweif in the north to Aswan in the farthest south, "which makes it the longest natural gas pipeline countrywide, constructed at a cost of LE5 billion as part of the country's efforts to upgrade Upper Egyptian governorates and attract more investment into the south."