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Photographers protest expulsion

News photographers staged a protest in downtown Cairo against their exclusion from parliament following the publication of an unflattering snapshot of prime minister Ahmed Nazif eating pumpkin seeds during a parliamentary session. A group of 30 news photographers gathered outside the Journalists’ Syndicate on February 3, calling for the revoking of a decree that restricted their access to the parliament’s assembly hall and demanding protection from police and MPs, who they accuse of “irresponsible acts” of violence against them. Dozens of news photographers have been attacked by security forces, hired thugs and angry MPs while trying to carry out their jobs.

On January 31, parliament speaker Fathy Sorour issued a decree banning news photographers from the parliament’s assembly hall except for a brief five-minute shoot at the start of each session. Sorour denied that the decree is intended to muzzle press freedom, saying instead that it was intended to reduce the congestion in the assembly hall.

Oil, gas dispute threatens exploration deals

A row over oil and gas rights off the coast of Cyprus threatens to erupt into a multilateral political dispute, with Egypt caught in the middle. In early February, Turkey warned Cyprus to cancel its tender for oil and gas exploration rights off the divided island’s coast. The first round of licensing involves an international tender for 11 offshore blocks covering a total of about 60,000 square kilometers to the south of the divided Mediterranean island. Ankara says Turkish Cypriots should have a say in any of Cyprus’ oil and gas rights.

Cyprus has signed deals with Lebanon and Egypt to delineate sea boundaries for oil and gas exploration. Petroleum minister Sameh Fahmy said at the ceremony marking the launch of the first licensing round that Egypt would stand by Cyprus in its effort to explore and exploit offshore oil and gas deposits.

Ration card program to expand

The government announced it will begin issuing ration cards to more low-income individuals enabling them to buy subsidized goods. Under the revised system, individuals benefiting from social insurance will be eligible for ration cards.

Egypt’s ration card program allows beneficiaries to purchase subsidized goods from state-designated retail groceries for seven basic commodities: sugar, rice, tea, samna (clarified butter), pasta, beans and lentils. In 2004, 9.3 million ration cards were approved by the government, serving 39 million citizens.

QIZ parties reduce Israeli content

The US, Egypt and Israel have agreed to reduce the minimum percentage of Israeli content in Egyptian goods eligible for duty- and quota-free access to the US market under the Qualifying Industrial Zones (QIZ) Agreement. A tripartite committee agreed to decrease Israeli content from 11.7 percent to 10.8 percent. The reduction was a partial victory for Egyptian manufacturers, who had requested that the required Israeli component be reduced to 8 percent, consistent with Jordan’s QIZ agreement.

Egypt’s QIZ agreement has been credited with boosting exports to the US to $2.4 billion last year, up from $1.3 billion in 2004. Trade experts say that figure could rise to $4 billion by 2011.

Gov’t amends bidding, securitization rules

The government has issued a new bidding rule to protect minority shareholder rights, and to improve disclosure and bidding valuations. Under the new regulations, investors will not be able to buy more than a third of a company’s total capital or voting rights through the stock exchange or other market mechanisms. Investors seeking to increase their stake beyond one-third of a company will be obliged to bid for all outstanding shares and convertible bonds. The new rule is based on international standards.

Meanwhile, securitization rules have been amended to make it easier for companies to raise short-term debt. Under the new rules, the minimum capital requirement can be denominated in any convertible currency, and deposited at commercial banks registered with the Central Bank of Egypt. Financial statements, however, must be reported in the same currency as the company’s capital deposits. The amendments also classify securitization as a non-banking financial service.

In January, Minister of Investment Mahmoud Mohieldin issued a decree lowering the minimum capital requirement for limited liability companies (LLCs) from LE 50,000 to LE 1,000.

Blood donations dry up

Egyptian health officials are scrambling to persuade citizens to give blood after a sharp plunge in donations caused by a scandal over “defective” blood bags.

MP Hany Sorour, owner and chairman of Haidyelina for Advanced Medical Industries, one of the health ministry’s blood bag suppliers, was stripped of his parliamentary immunity to allow for an investigation after it was reported that public hospitals had received defective blood bags from the ministry. Haidyelina had sold tens of thousands of blood bags to the Ministry of Health since June 2006. Media reports on the exact nature of the defect have varied wildly, from allegations that blood stored in the defective blood bags contained bacteria and fungi, to unlikely claims it carried HIV or various carcinogens. Sorour contended that any contamination was the ministry’s fault, due to improper storage.

The media buzz surrounding the case fueled the public’s fear of contaminated blood supplies and led to a 70-percent drop in donations nationwide, according to the Doctors’ Syndicate. A health ministry spokesperson assured worried citizens that there was no record of blood contamination as a result of using the bags. The bags simply failed to meet specifications, the spokesperson said, adding that the ministry stopped distributing the Haidyelina bags in July 2006 after it learned that the bags could be contaminated. At that time, 40,000 of the 330,000 blood bags in state hospitals had been supplied by Haidyelina.

Mining firm sees golden opportunity

Centamin Egypt Ltd, an Australian gold exploration company, announced it would proceed with its planned $216 million development of the Sukari gold project in Egypt’s Eastern Desert. The decision follows the completion of a feasibility study that suggested the project can produce 200,000 ounces of gold annually for 15 years beginning in 2008. The open-cut mine has 8.26 million ounces of proven gold reserves, and drilling is expected to increase these figures.

The mineral exploration company has held an exploitation lease over the 160-square-kilometer site since 2005, yet production stalled as Centamin struggled to find local and international investors willing to operate under the country’s profit-sharing laws.

A turning point came in late January when the Ministry of Petroleum signed a memorandum of understanding with the International Finance Corporation (IFC), the financial arm of the World Bank, to replace antiquated mining laws that had proven a serious obstacle to investment. The new framework is expected to be completed by the end of the year.

IFC officials predict the restructured gold mining sector could contribute more than $10 billion to the economy, which represents about 10-12 percent of GDP.

Qatari grant to upgrade railways

A $120 million grant from Qatar will be used to buy 40 new railway engines from General Electric as part of the government’s plan to modernize the transportation sector, transport minister Mohamed Mansour announced. Delivery of the diesel locomotives from the US corporate giant is expected to begin in September 2008 at a rate of 10 vehicles per month.

In November 2006, the Ministry of Transport launched a bid for the supply of 40 locomotives as part of a plan to import 130 vehicles for the national railways system. The ministry is currently negotiating separate contracts with China’s Ziyang Locomotive Works and US-based Electro-Motive Diesel for the supply of additional locomotives.

Duties levied on Syrian yarn

The Ministry of Trade & Industry instituted a four-month temporary anti-dumping duty on cotton yarn imports from two Syrian manufacturers. The duties, effective February 4, are against the General Company for Cotton Spinning and the Jableh New Spinning Company, equal to 15 percent and 14 percent, respectively.

The duties were implemented after the ministry received a complaint from the Holding Company for Spinning & Weaving, which charged that low-priced Syrian yarns exported to Egypt below cost were causing job losses to the domestic spinning and weaving industries.

Book fair draws big crowds

An estimated 2 million people thronged to this year’s Cairo International Book Fair, the largest and most important event of its kind in the Arab world. The 39th annual fair, held from January 23 to February 4 on Cairo’s exhibition grounds, covered 80,000 square meters with over 700 Egyptian and Arab publishers, and 1,400 stands of books and CDs. Some observers, noting the prominence of religious tracts this year, say literary and scientific works have been pushed to the margins, amid other concerns about censorship.

Two firms selected for WiMax projects

Internet service providers TE Data and EgyNet have been selected to design, implement and operate WiMax networks in Luxor and Sharm Al Sheikh’s Naema Bay in a project designed to improve broadband wireless connectivity in tourist areas. The two networks will be among the first wireless outdoor networks in Egypt, and are expected to be completed by May 2007. The cost of the projects and the number of bidders have not been disclosed.

WiMax is a new generation of wireless technology, considered superior to Wi-Fi and 3G because it transmits higher data rates and covers a wider range.

Bird flu continues to take human toll

The recent death of a 17-year-old girl in Fayoum who contracted the H5N1 virus edged up Egypt’s human death toll from bird flu to 13. Another nine Egyptians have contracted the virus but survived.

A World Health Organization (WHO) Cairo-based official denied speculation that the woman had contracted a drug-resistant mutation of the virus, which the WHO reported in January. This new strain is resistant to antiviral drug oseltamivir, commonly sold under the name Tamiflu, the chief weapon against the H5N1 flu strain.

The case reportedly relates to an outbreak in Gharbiya governorate, 50 miles north of Cairo, in which a Tamiflu-resistent strain killed three people in December. It was uncertain whether the resistant strain was contracted by each victim independently, or whether they passed it on to one another.

Meanwhile, the government has announced a new nationwide campaign to vaccinate poultry. The campaign involves the purchase of 100 million vaccine doses for birds, at an estimated cost of $450 million.

Public sector companies make profit, slash debt

State holding companies and their subsidiaries earned a profit of more than LE 3 billion in FY 2005-06, Minister of Investment Mahmoud Mohieldin announced. While 109 subsidiaries reported a net profit, the remaining 55 reported a net loss of LE 2.9 billion.

Public companies’ debts fell from LE 31.1 billion to LE 10 billion during the period. Debts of LE 7 billion to Bank of Alexandria and LE 9.2 billion to National Bank of Egypt, Banque Misr and Banque du Caire were cleared.

Spanish firm to develop wind power

Spanish engineering firm Gamesa was chosen to supply 284 wind turbines to Egypt in a deal worth f280 million. The turbines will be added to the wind farm in Zaafarana, on the shores of the Red Sea, and will generate a total power capacity of 241 megawatts. Construction is planned to begin in the first half of 2008.

There are currently 322 wind turbines at Zaafarana, the country’s only wind farm, which feeds 225 mega-watts into the national power grid.

IFC to fund gas exploration, hospitals

The International Finance Corporation (IFC), the financing arm of the World Bank Group, announced it would provide a $50 million loan to UK-based Melrose Resources in order to help its subsidiaries in Egypt and Bulgaria to develop gas reserves in the two countries. In Egypt, the funds will be used to support gas exploration in the company’s El Mansoura concession in the onshore Nile Delta area, where recent oil and gas discoveries are being brought online and further appraisal and exploration are ongoing.

The IFC has also announced separate plans to provide $37 million in financing to the Saudi German Hospitals Group to construct new hospitals in Egypt and Yemen. A 300-bed, tertiary-care hospital, a joint venture with the Olympic Group, is currently under construction on the Cairo-Ismailiya Road and expected to open in the second quarter of 2009.

Tariffs on NZ dairy goods revised

The Ministry of Trade & Industry has reduced, and in some cases eliminated, tariffs on New Zealand selected meat and dairy products. Tariffs on butter and cheese were reduced to 2 percent, from 5 percent, while duties on milk powder and sheep meat were abolished.

New Zealand’s dairy exports represent 85 percent of the country’s total exports to Egypt. The new policy will mean a $3 million reduction in tariff revenue, and increase competition with local producers and European exporters.

OTV launches

OTV, the private satellite televison channel of business tycoon Naguib Sawiris, hit the airwaves on January 30. The new channel, launched with a capital of $17 million, is produced by and targeted at Egyptian teenagers. This is not Sawiris’ first endeavor in the broadcast arena – the Egyptian mogul owns the Iraqi terrestrial channel Nahrain and sponsors the well-known CNN program Inside the Middle East.

WB loans to bolster mortgage finance

The People’s Assembly Housing Committee has approved a LE 214 million loan from the World Bank to boost the country’s mortgage finance industry. According to the Ministry of Finance, the government will make the funds available to primary lending institutions represented in the four established mortgage finance companies.

According to Osama Saleh, chairman of the Mortgage Finance Authority (MFA), lending reached LE 1 billion at the end of 2006, up from LE 650 million in September 2005 and LE 15.8 million in mid-2005.

Sudan apologizes for assaults on Egyptian workers

The Sudanese government has offered an apology to Egypt for the mistreatment of four Egyptian workers at a police station in Khartoum after Egyptian embassy employees submitted medical certificates as evidence that the workers had been subjected to torture with electric wires at the police station. The four Egyptian workers were among 21 Egyptians and nine Sudanese arrested after a fight had erupted at a construction site in Khartoum.

Sudan’s interior minister, Al-Zubair Bashir Taha, apologized on behalf of his government and promised that an investigation would begin immediately.

Fees tacked onto air departures

Airlines operating in Egypt have begun levying extra fees for airport services in the country as required under a new decision issued by the Holding Company for Egyptian Airports. The airport service fees of $15 for international flights and $7 for domestic routes apply to scheduled flights only. Charter flights fees, previously $4, are being increased in stages to reach $15 by the end of the year.

Travel agents who opposed this demand said that these added fees will discourage tourism. Airport authorities counter that the revised service fees are still lower than those at international airports in Europe and the Middle East.

Developer partners on shaky ground

It seems that the honeymoon between UAE’s Emaar and Egypt’s ARTOC Group, the two main partners in Emaar Misr, is over. Although the partners recently signed a contract with the Egyptian General Company for Tourism & Hotels (EGOTH) to build a mega-resort and hotel in Sidi Abdel Rahman on Egypt’s North Coast, troubles that have been apparently brewing behind the scenes for the past six months surfaced last month with each side accusing the other of failing to honor its obligations.

UAE-based Emaar Group, which owns 40 percent of Emaar Misr, accused its Egyptian partner, Shafik Gabr, of not paying his share of the price of the land. The group also accused him and his company, ARTOC Group, of being the reason why the quality of Emaar projects in Egypt is lower than the quality of their projects elsewhere. Gabr, who holds a 10-percent stake in Emaar Misr, countered that he and ARTOC, which owns the remaining 50 percent of the company, have paid their share in full. He went on to accuse Emaar Group of failing to meet its commitment.

Emaar Group is currently offering to acquire Gabr and ARTOC’s joint majority stake of 50 percent for $165 million, an offer Gabr has thus far rejected.

Emaar Misr was established in 2004 and has a paid-in capital of LE 400 million. Last summer, Emaar Misr bid $175 million to acquire the Sidi Abdel Rahman plot.

Cement firm eyed for takeover

Competition is brewing over the acquisition of an Egyptian cement firm. On February 25, a subsidiary of Portugal’s Cimentos de Portugal SGPS, Cimpor Inversiones SA, increased its bid to acquire 100 percent of the shares of cement maker Misr Cement Co SAE to LE 80 per share from its initial bid of LE 67 in an attempt to outbid Arab Swiss Engineering Company (ASEC), a subsidiary of Italy’s Italcementi SpA. ASEC had countered Cimpor’s first bid by offering LE 75 per share.

Misr’s cement factory has a production capacity of 1.6 million tons annually. Its sales in 2006 have been estimated at LE 520 million and it controls 3.5 percent of the Egyptian cement market. Cimpor already owns one cement company in the Egyptian market, Ameriyah Cement, which it acquired in 1999.

Vodafone, OT interests at stake

Hutchison Telecom International (HTIL) has agreed to sell its 67-percent stake of Hutch Essar, a joint venture between HTIL and Indian partners, to Vodafone Group for $11.08 billion, plus an assumed net debt of $1.96 billion. The sale is pending the approval of an extraordinary general assembly meeting on March 9.

Orascom Telecom Holding (OT) had purchased a 19.3-percent stake in Hutchison Telecom in December 2005 at $1.3 billion, as part of its strategy to further its stake in the Asian mobile telephony market. HTIL represents around 7 percent of OT’s assets and Hutchison Essar represents between 75 percent and 80 percent of HTIL’s total value. It is unclear if OT plans to sell its stake in HTIL in light of Vodafone’s controlling stake. If it opts to do so, OT’s stake in HTIL is currently worth $2.03 billion at current stock market price.

EU earmarks s558 million aid package

The EU announced it would offer a s558 million assistance package to Egypt as part of the European Neighborhood Policy (ENP). The assistance package will go towards supporting Egypt’s reform program and the implementation of the Egypt-EU ENP Action Plan. The action plan is based on priority areas identified by Egypt including economic, social and political reforms. An estimated s58 million will be used as interest subsidies to help secure as much as s300 million in loans from the European Investment Bank (EIB).

The European Neighborhood Policy, which first came into effect in 2004, gives EU neighboring countries privileged status based on the mutual commitment to common values including democracy, rule of law, good governance, market economy principles and sustainable development. The EU currently has signed treaties and developed action plans with Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Syria, Tunisia and Ukraine.

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