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Monday, 12 April 2021

Railway, media authorities are deeply in the red

The National Railway Authority (NRA) and the National Media Authority (NMA) posted the largest losses among all state institutions in FY2019-2020, according to a report by the House Planning and Budgeting Committee on last fiscal year’s budget picked up by Masrawy. Egypt’s 53 state authorities recorded a grand total of EGP 192 bn in losses. The NRA and NMA accounted for a combined 92% of the EGP 22 bn in losses 14 major state bodies incurred, with the railway operator making up over half of that figure. The committee presented its customary end-of-year report on the closing balances of individual government institutions to the House general assembly for review yesterday.

What’s the recourse? The report called for setting up committees to evaluate what went wrong, and look into whether the boards of directors of the two biggest loss-making authorities have been doing in the past three fiscal years. It also recommended setting up other committees with members from the Central Auditing Organization and the Financial Regulatory Authority to improve future performance and suggested some loss-making state bodies should be merged together or be subject to other rigorous structural changes.

It’s not particularly good news for Information Minister Osama Heikal, who is facing parliamentary scrutiny over how the ministry has been spending public money since it was reconstituted in 2019. Heikal is due to face MPs in the coming period to answer questions about how the ministry has allocated funds under his watch.

And the National Railway Authority’s losses have also widened significantly in recent years. According to the committee’s report, they were at least EGP 12 bn last fiscal year alone, which is around the same figure recorded in FY2018-2019. Besides consistently being in the red, the authority also owes at least EGP 100 bn to the central bank and EGP 150 bn in government dues. Reforming this crucial institution is one of the government’s most pressing priorities as Egypt’s rail network is suffering from years of neglect that routinely leads to tragic accidents — the most recent of which was last month’s Sohag train crash. The state has earmarked investments worth EGP 225 bn to revamp 10k kilometers of rail lines.

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