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| ROUND UP: The month at a glance |
ESSENTIAL IMPORTS ONLY:
The Central Bank announced temporary measures on November 19 to
limit imports to essential consumer goods and sectors of the economy
such as industry, agriculture and spare parts. Bank governor Mahmoud
Abul-Oyoun said banks had agreed to stop financing goods importation
for a three-month trial period in an attempt to force importers
to use more secure letters of credit.
TOURISM DEBTS RESCHEDULED:
Newspapers reported on October 28 that, in light of the negative
impact on Egyptian tourism of the September 11 attacks, the ministers
of tourism and economy have agreed to reschedule debt payments to
local banks for companies operating in the tourism sector.
EGYPTAIR PASSENGERS DOWN:
In October, EgyptAir announced a 30-percent decline in its passenger
numbers, due to sagging world travel after recent events. The company
also said it expects a 45-percent decline overall by the end of
October. To offset this drop, EgyptAir announced that it would reduce
domestic flights by 40 percent starting November 1.
THIRD NETWORK IN PROGRESS:
Telecom Egypt (TE) announced in late October that it had signed
a contract with an American consultant to design Egypt’s third
mobile-telephone network. TE expects the network to be up and running
by December 2002. The company also signed a deal with a Japanese
firm to provide locally produced central operating systems.
LNG PARTNERS SOUGHT:
DEA, a German oil and gas sub-unit of global player RWE, announced
in the Egyptian press on October 23 that it is discussing plans
with potential partners for a liquefied natural gas plant in Egypt.
DEA is currently drilling in partnership with BP Egypt and has helped
in the discovery of large natural-gas reserves.
FIRST B.O.T. AIRPORT OPENS:
A Condor charter Boeing 757-300 landed at Marsa Alam International
Airport on November 5 carrying 252 passengers, the first international
flight to land at the newly opened airport. Established by the Kuwait-based
M.A. Kharafi Group under a 40-year BOT (Built-Operate-Transfer)
concession, the airport is intended to serve the Port Ghalib diving
resort, which is being built by Kharafi on the coast nearby.
The first domestic flight to Marsa Alam, belonging to local private
airline Orca, arrived on October 30.
Despite adverse global tourism conditions at the moment, the airport
opened ahead of schedule. “When we won the concession, we were
planning an airport opening in 2002,” Kharafi Group chief executive
director Jim Pringle said.
BANK DEAL ON HOLD:
Bank of Alexandria and American Express Bank completed negotiations
in late October with Standard Chartered Plc on terms and conditions
for the acquisition of Egyptian American Bank (EAB). However, because
of global economic uncertainties stemming from the September 11
attacks on the United States, the parties have decided to postpone
their final decision on the transaction.
EXPORTERS’ HOLIDAY ENDS:
The Ministry of Finance announced at the beginning of November that,
in order to comply with WTO requirements, the proposed new tax law
would revoke the previous ministerial decree that granted tax breaks
on export earnings. Exporters, needless to say, aren’t pleased.
LAKAH STRIPPED:
The People’s Assembly unanimously voted on November 19 to strip
businessman Ramy Lakah of his place in the assembly because of his
dual (Egyptian-French) nationality. By the same ruling, Egyptian-American
Misbah Mitawee also lost his seat in parliament.
MOODY’S LOWERS OUTLOOK:
On November 7, Moody’s international rating agency lowered
its outlook on the Baa1 rating of local-currency bonds in Egypt
to negative from stable. However, Moody’s maintained the stable
outlook on Egypt’s Ba1 foreign-currency ceiling. Moody’s
said the lowered outlook was due to a deterioration in the government
budgetary position and a slowdown in economic growth.
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