Private sector to play major role in coming period: Minister of Public Enterprise Sector
Egypt’s Minister of Public Enterprise Sector Hisham Tawfik said that the private sector has a big and effective role in the coming period. He stressed that there are huge and distinct investment opportunities for the private sector to participate in the development and restructuring of economic sectors and projects implemented by companies affiliated with the ministry; Especially in the fields of tourism, agriculture, transportation and the textile industry.
This came during his meeting with members of the American Chamber of Commerce in Cairo (AmCham Egypt) headed by Tarek Tawfik.
The minister said that private sector investors can participate in the project to operate the new hotel that will be located in the Opera Square.
The new hotel will replace an old hotel built by Khedive Ismail in 1863, it will be built within 30 months. He revealed that the private sector can also participate in the operation of the “Savoy Hotel” in Luxor Governorate, and in the development and operation of two parks in the Heliopolis neighbourhood, namely “Granada” and “Maryland”.
The minister added that there are distinct opportunities in the field of spinning and weaving, as the largest spinning factory in the world will soon be opened in the city of El-Mahalla El-Kubra, and a search is underway for an operator with real expertise from India, Italy, China or the US, with a ten-year contract to establish three major units for the spinning industry in Mahalla, Amreya and Helwan.
He added that there is also a new industrial cluster in Fayoum that includes 14 small factories for handmade carpets, which provide good opportunities for investors in the textile industry.
During the meeting, the minister presented the possibility of the private sector participating in a large agricultural project in Toshka, using water from the Nile, connected to services and electricity, and has good feasibility studies and accommodates 14 industrial sectors as well, such as dairy and food industries.
“Egypt’s Ministry of Public Enterprise Sector has made great strides in developing the infrastructure and work systems in the companies affiliated with the ministry. This aims to develop improve performance of companies and achieve sustainable growth,” Tawfik explained.
He added that the public business sector companies are witnessing a new era of administrative reform and that one of the most prominent efforts made in this context, it is the amendment of the Public Enterprise Sector Law for the first time in nearly 29 years, as the amendments were issued by Law No. 185 of 2020.
Among its most prominent amendments, good and effective representation of shareholders in the Board of Directors. It also gave priority to employees and the Board of Directors in the distribution of profits before shareholders, up to 12% for employees and up to 5% for the Board of Directors, in addition to setting specific and clear rules to stop capital losses, as well as preparing standard work regulations for all companies, the development of the chart of accounts in coordination with the Central Auditing Organization.
Nevertheless, the amendments included the application of the ERP system for planning and management of enterprise resources in about 63 companies, and it includes 6 main sectors: production, finance, sales, purchases, stores, human resources. Public Enterprise Sector’s companies are scheduled to switch to automated systems at the end of the second quarter of 2022.
The minister added that in the automotive sector, the ministry has a large project to manufacture natural gas-powered buses and another project to manufacture a smaller electric minibus in cooperation with many parties.
He explained that this project is very important because it represents 60% of the buses designated for mass transit and that there is a tendency to reach the proportion of the local component to 82%.
Concerning electric cars, Hisham Tawfik said that there is a tendency to cooperate with other partners, other than the Chinese side, with whom cooperation has faltered. A map of electric vehicle charging stations has been drawn up, and in cooperation with the Ministry of Electricity, the electricity price at these stations will be determined.
The minister stressed that the Public Enterprise Sector was burdened with debts that amounted at one time to EGP 42.1bn, which necessitated the implementation of an urgent plan for the financial reform of this sector. He stressed that debts estimated at EGP 33bn were settled.