A private matter: El-Ganzouri's 1990s sell-off of state firms comes under scrutiny

Marwa Hussein, Wednesday 7 Dec 2011

Egypt's new prime minister oversaw the sell-off of 70 companies during his 1996-99 term in office, but a wave of post-uprising court cases are challenging those orders

Kamal Al-Ganzouri

Kamal El-Ganzouri first term as Egypt's prime minister in the 1990s saw the country's fledgling privatisation programme step into higher gear, data shows.

Although the Mubarak-era programme was launched in 1991, it wasn't until Ganzouri's ascension in 1996 that the sell-off of state companies began in earnest. 
Ganzouri's years in office, from 1996 to 1999, saw 70 publicly-owned firms at least partially sold to private buyers.
His return to the premiership last month, aged 78, has coincided with a growing movement claiming that privatised companies have failed in their promises and demanding that they be renationalised.
Ganzouri's four years of privatisations involved a raft of companies in key sectors and were supervised by Atef Ebied, then Minister for the Public Sector -- a post that no longer exists.
Industries involved included cement, pharmaceuticals, chemicals, real estate, textile and foodstuffs.
The privatisation of firms producing cement, medicine and fertiliser are thought to have had an influence on the resultant price increases for such products.
Among the famous firms entirely privatised during Ganzouri's office were Qaha for Food Industries, Ahram Beverages, Ideal and Abu-Kir for Fertilizers. 
Three cement companies, Al-Amriya Cement, Portland Helwan and Beni Suef Cement, were also sold to multinationals.
Other state-owned firms were partially sold, including the Eastern Company, which has a monopoly on tobacco production, Egyptalum and the Heliopolis Company for Housing and Development.
Privatisations reached their peak between 1998 and 1999, when 32 and 31 companies respectively were offloaded to private buyers. 
During this period, the government mainly relied on stock market flotations to sell the firms.
26 companies were entirely privatised this way, while 13 were sold to a strategic investor.
The other companies were either partially privatised through the stock market or sold to workers' unions at the firms.
The privatisation programme faced opposition from its early days, with suspicions of corruption surrounding several major transactions.
On Saturday, an Egyptian court revoked the privatisation of formerly public-owned firm, the Arab Company for External Trade (ACET), following a law suit which claimed it was sold at a price significantly lower than the value of its assets.
ACET was one of the 70 firms privatised under the Ganzouri government. It is the fourth firm to be returned to public ownership by an administrative court decision since February.
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