Despite new government approaches to boost privatisation, the programme still faces a slowdown for the foreseeable future Seven privatisations were concluded in 2002. The companies are United for Trade, Arab for Textile Trading, the Armenian Factory (Cairo Metal Products), partial sale of assets of Alexandria Cooling, the Bags Factory at National Plastic, the Liquid Batteries Factory at National Plastic and the Medical Ampoules Factory at Al-Nasr Glass and Crystal Company. "The reason behind this was and still is the government's 'slowly but surely' approach," Mohamed Hassouna, head of the valuation and financial analysis unit at the Public Enterprise Office, told Al-Ahram Weekly. For a sector that has employed more than one million worker since 1991, the privatisation pace must be cautious, Hassouna said. The government has utilised a number of various divestiture techniques, such as the sale of individual factories or lines of production, asset unbundling and tender offerings. A capitalisation approach is in the pipeline that will allow investors to inject an increase in capital towards diluting government ownership to less than 51 per cent. However, analysts say that privatisation is slow not because of faulty sales methods, but rather because of an adverse investment climate. Investor confidence in the Egyptian economy and in government announcements need to be restored. Despite government efforts to address radical problems of valuation, outreach and packaging of assets, the privatisation programme is expected to face numerous challenges in the coming phase. Restructuring loss-making companies will constitute a challenge, so will finding new approaches to labour restructuring as an alternative to the early pension system for young workers. Topping the difficulties the programme will be facing is the region's instability and the possibility of a military conflict in Iraq, which will have a direct negative impact on investment flow to Egypt. Despite the many obstacles the government foresees in its way, Hassouna said, "it expects a satisfactory continuation of the programme."
