Mega contractors not for sale THE LEADING state-owned contractor Arab Contractors (AC) will not be privatised any time soon, as noted by Prime Minister Ahmed Nazif earlier this week. The statement quashed speculation of an imminent sale. Nazif clarified that what is currently taking place at the construction giant is a restructuring process that does not aim to prepare the company to be divested. The statements came a few days after it was announced that the government approved a draft law converting Arab Contractors into a joint stock company, in order to prepare its shares for sale in tranches and generate new funds for the company. AC has many activities in the region and Europe; during fiscal year 2006/2007, it recorded sales of LE7.6 billion -- 14 per cent of which came from projects abroad. Top of FDI recipients EGYPT cornered the lion's share of foreign direct investments (FDIs) channelled to North Africa and the Middle East region in 2006. According to a recent report issued by the Economist Intelligence Unit, FDIs grew in North Africa during 2006 by 51 per cent to an estimated $22.3 billion. Egypt held a 45 per cent share of this sum and 25 per cent of the developing Middle East's $32 billion. This is a record total for FDIs in the region, despite the high political and security risks. The report, entitled World Investment Prospects to 2011: Foreign Direct Investment and the Challenge of Political Risk, attributed the surge in FDIs in Egypt to the boom in privatisation and strong regional liquidity, a more flexible labour law and laws allowing majority foreign ownership of banks, insurance companies and real estate. "FDI flow increased strongly in 2006, and this affected almost all countries in the region," stated the report. "Egypt in particular received significant levels of FDIs in 2006 -- some $10 billion -- which was almost double the record inflow attracted in 2005." The report added that FDIs are projected to remain robust in Egypt, although some slowdown is likely "as the pace of privatisation decelerates". According the Central Bank of Egypt (CBE), inflows of FDIs, including investment in the petroleum sector and privatisation proceeds, totalled $6.1 billion in fiscal year 2005/06. Available figures for the first half of 2006/07 indicate that the total from the previous fiscal year has already been exceeded, with inward FDIs totalling $8.3 billion over the six-month period. Another report issued by the Organisation for Economic Cooperation and Development (OECD) entitled Investment Policy Review of Egypt 2007 noted that FDIs to Egypt increased 12 fold between 2001 and 2006. Figures jumped from $500 million to $6.1 billion during that period, and diversified away from the traditional oil and gas sector.
