Cheaper rent INDUSTRIAL projects set up within the framework of a free zone agreement will be paying cheaper rent. In an attempt to place these companies on a competitive footing with their international counterparts, Minister of Investment Mahmoud Mohieldin this week approved a decision reducing rent paid by these companies from $3.5 per square metre to a maximum of $2 per square metre. The decision also ought to help these companies refrain from making any layoffs. According to ministry statement, 613 projects with some 234,000 workers will benefit from this decision. These projects include garment and textile manufacturers, food industries and pharmaceuticals. Beyond the crisis FINALLY someone is able to see an end to the financial crisis. Minister of Trade and Industry Rachid Mohamed Rachid last week told a gathering organised by the German Arab Chamber of Industry and Commerce (GACIC) that it is time to think ahead, beyond the crisis. "If we are not one step ahead, we do not have a chance," Rachid said. He outlined four priorities for the post-crisis period. Topping those priorities is human resource development. He stressed that HR development is not just about educating, training and improving skills, but about improving the quality of leadership in the government and the private sector. "We need good leadership in the government to be able to induce change," he stressed. Infrastructure is the second area Rachid pointed out as needing increased investments. He added President Hosni Mubarak has invited the private sector to invest in infrastructure. "We need the best infrastructure," Rachid said, pointing out that private sector participation could make that possible as is the case with the telecommunications sector which has grown by leaps and bounds since it was opened up. A third priority on Rachid's list is improving productivity. "We are not a rich country, but we could become one. The level of wealth and living standards depend on productivity of society." And last but not least Rachid said stressed that there is a need to upgrade local authorities. "I cannot see any improvement if we continue to govern from Cairo," he said. On a similar note, Rachid told a press roundtable that there is increased optimism in the market that the crisis may be possibly bottoming up. Nonetheless, he remarked that losses in Suez Canal, tourism and export revenues continue. However, he said that demand is still high for investments on part of the industrial sector. And in some of the new industrial zones in Upper Egypt, there is a waiting list for people wishing to set up projects. Rachid said that the government is on track to spending the LE15 billion stimulus package earmarked for the first half of the year. He estimated that 40 per cent of that has been already spent and the rest is soon to follow suit. Stand-off continues THE DISPUTE between Orascom Telecom and France Telecom remained unresolved this week and both companies persisted on their position. Orascom Telecom blames France Telecom (FT) for failing to meet the 15 April deadline by which it should have made a tender offer to all shareholders of the Egyptian Company for Mobile Services (ECMS) as per the Egyptian capital market law. FT insisted that it is not obliged to make a tender offer to all ECMS shareholders and that the ruling of the International Court of Arbitration of the International Chamber of Commerce requires it to buy only OT shares in MobiNil, which owns 51 per cent of ECMS. FT also issued a statement saying it "wishes to make it clear that no discussions have taken place with Citadel Capital or with any other potential partner concerning plans to buy-out the 29 per cent free float of ECMS." In the meantime, representatives from FT met with the Egyptian Minister of Communications and Information Technology Tareq Kamel and Minister of Investment Mahmoud Mohieldin. Following the meeting the Ministry of Communications and Information Technology issued a statement clarifying that the disagreement between the two companies is a commercial dispute that the government is not party to. Further, the government urged both companies to speedily resolve the situation to avoid that it affects the performance of ECMS. The statement also said that the government would welcome and encourage peaceful negotiations to resolve the issue. However, they stressed that it must be resolved within the framework of Egyptian law. Aviation investments MINISTER of Aviation Ahmed Shafiq insisted last week that the global financial crisis will not deter new investments in civil aviation, reports Amirah Ibrahim. "We expect a 15 per cent to 18 per cent decrease in passengers arriving to Egyptian airports, particularly in the regional airports," stated Shafiq as he spoke before members of the American Chamber of Commerce in Cairo (AmCham). "Figures show that the crisis may cause a six per cent drop at Cairo International Airport, while other airports are losing 12 per cent of their traffic. We are really optimistic that we will not lose more than 18 per cent traffic, such a rate should provide enough confidence to continue with planned projects in the aviation sector." Shafiq indicated that there are plans to launch new projects in the aviation business. These include the construction of a new terminal at Hurghada airport scheduled to begin in October, adding a third terminal to Sharm El-Sheikh airport and establishing a new airline to operate helicopters for tourism and businessmen. Several issues of concern to investors came up during the AmCham members. Among those issues are the exorbitant fees imposed by the Build, Operate and Transfer (BOT) management of the Red Sea's Marsa Alam airport, the exaggerated taxes imposed on flight tickets and the lack of airports in Upper Egypt and the Northern Coast. Regarding the latter, Shafiq said a new terminal is under construction at Borg Al-Arab airport, west of the Mediterranean city of Alexandria. As for the Marsa Alam airport fees, the minister explained that aviation authorities could only intervene with BOT management if it felt unsatisfied with the fees, which was not the case so far. He also added that new airlines operating to Egypt or existing ones which operate new routes to Egypt should obtain a one-year exemption of fees.
