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Tuesday, 10 October 2017

House Industry Committee’s fall agenda to include Automotive Directive, amendments to the Industry Act

House Industry Committee looks at legislation to boost local components in domestic manufacturing: The House of Representatives’ Industry Committee will start hearings on key legislation including amendments to the Industry Act that will enforce a higher quota for local components in manufacturing, said the committee’s chair Ahmed Samir. The legislation would also tighten and enshrine a “buy Egyptian” requirement for government, Samir tells Al Mal.

This direction by the committee bodes well for the long-dormant Automotive Directive, which Samir said would also be a top priority for the committee. Bolstering domestic component quotas is in keeping with the spirit of the Automotive Directive, which would give assemblers incentives to go further up the value chain into manufacturing, while giving them a measure of protection against what they say are unfair benefits enjoyed by Turkish, EU and Moroccan imports. We anticipate the automotive directive will receive support from committee members despite the best lobbying efforts by auto importers who have worked hard to stall progress on the bill so far.

The committee will also look at changes to the Mineral Resources Act, especially considering that Federation of Egyptian Chambers of Commerce’s quarries division plans to lobby the committee hard on amending the executive regulations of the Act. According to the division’s head Ibrahim Ghaly, quarry operators wants to see licensing fees, royalties and tolls payable to the state cut by 50%. They are also angling for longer minimum concession periods.

Background on the Mineral Resources Act regs: The law and its executive regulations have been with the House for at least six months now with little progress and no media attention. It is unclear why the regs were sent to the House as well — MPs typically have no voice in them. According to Al Borsa, the executive regulations will propose raising fees on quarries between 300-747% depending on the mineral. Leasing quarries from the state will cost EGP 7-9 per sqm annually with a EGP 10,000 downpayment. Concessions will be granted for only one year, while the state is obliged to issue licenses in four months.

Other items on the committee’s agenda will include looking at legislation to IPO failing state-owned factories.

Also at the House today, the Economics Committee is expected to begin reviewing the amended Consumer Protection Act, according to Al Mal. The Ismail Cabinet had signed off on the bill in June, amid worries that it includes provisions that would allow the government to set price controls on certain goods.

In other House news, Talaat Elsewedy has been selected to chair the House of Representatives’ Energy and Environment Committee after Mohamed Rashwan’s election last week was contested, according to state news outlet EgyNews.

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