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Investment council recommends transfer of Private Sector Partnership Unit - Daily News Egypt

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Investment council recommends transfer of Private Sector Partnership Unit

Coordination meeting between finance and investment ministries scheduled to study the recommendation


Two senior sources at the Ministry of Investment and the Ministry of Finance told Daily News Egypt that the Supreme Council of Investment, chaired by President Abdel Fattah Al-Sisi, recommends the transfer of the Private Sector Partnership Unit from the Ministry of Finance to the Ministry of Investment.

The government resorted to partnerships with the private sector for the implementation of infrastructure, services, and public facilities projects to obtain additional funding to ease the pressure on the state treasury, which is suffering a funding gap, a liquidity crisis, and a deficit of EGP 319bn in this fiscal year alone.

Sources at the Ministry of Finance stated that the ministry is not opposing the transfer, but it would require coordination with the unit itself to fully understand the steps needed for completing the transfer.

The source added that officials of the ministry will meet soon to arrange for a mechanism of transfer and whether it will require amendments to its legislation. A source at the Ministry of Investment explained the ministry’s target of revitalising partnership projects with the private sector in various fields in the coming period in order to benefit from the investment map that is currently being penned.

Moreover, the sources mentioned that the unit is facing many challenges in implementing the projects that are being conducted in cooperation with the private sector due to the resistance of different state agencies and their desire to implement the projects with no interference from the private sector.

The source explained that activating the unit does not require changing its affiliation, but rather a political decision to oblige all state agencies to fully cooperate with the unit.

The unit is considered to be the primary interface for the government to cooperate with the private sector, as well as for the development of patterns and model contracts, and the provision of support and consulting services for ministries, agencies, and governorates.

The private sector participation projects include long-term contracts between state agencies and private companies. Law 67 of 2010 specifies the offering and contracts procedures.

The execution framework for the participation programme relies on enabling the private sector to implement infrastructure projects through design, finance, construction, operation, management, and maintenance; and then transferring the ownership of the project to the state, which in return pays for the services following the handover.

According to the contracts for participation in Egypt, the government retains strategic control of those public services and ensures the implementation of new infrastructure projects. Risks of these projects are accounted for by the party most capable of shouldering these risks.

 

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