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Wednesday, 21 December 2022

Suez Canal fund not privatization via the back door, gov’t says amid controversy

The government is moving to stem controversy over the new Suez Canal fund: The Madbouly government yesterday denied claims that a proposal to set up a fund for the Suez Canal Authority will enable it to privatize assets by the back door.

ICYMI- MPs this week gave initial approval to legal amendments that would allow the SCA to “buy, sell, lease, exploit and benefit from fixed and movable assets” owned by the authority in order to capitalize a new EGP 10 bn fund. It would also allow it to use its own financial resources and revenues. It’s not clear whether this includes canal revenues, a key source of FX income for the public purse.

Cue controversy: A large number of MPs voted against the law on Monday, voicing concerns that it will pave the way for the SCA to sell assets without parliamentary oversight. “Establishing a fund in the Suez Canal is tantamount to emptying Egypt of its funds, and turning public money into private money,” said Mohamed Abdel Alim Daoud, a Wafd Party MP. It also triggered a storm on social media, with speculation about whether the amendments would allow the SCA to sell the canal trending all day.

The cabinet moved to calm fears over transparency, saying yesterday that the fund’s accounts will be supervised by the Central Auditing Organization and that the SCA would not sell off its assets by the back door. It did not acknowledge complaints about the lack of parliamentary supervision.

The canal is not for sale, says House Speaker: The fund will only be able to sell fixed and moveable assets, not the canal itself, House Speaker Hanafi Gebali said (pdf) during yesterday’s session, suggesting that selling the canal would be unconstitutional. “The fund will do what all funds do in terms of buying, selling, and leasing assets, but it says nothing at all that it will sell Suez Canal.”

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