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Investors fear losing government incentives

CAIRO: Fourteen international companies have expressed interest in operating new industrial zones and renovating others according to new government policy, General Authority for Free Zones and Investment (Gafi) Chairman Ziad Bahaeddin said Wednesday. Gafi will hold tenders for industrial zones to be established in the 6th of October City, 10th of Ramadan, Fayoum and Damietta …


CAIRO: Fourteen international companies have expressed interest in operating new industrial zones and renovating others according to new government policy, General Authority for Free Zones and Investment (Gafi) Chairman Ziad Bahaeddin said Wednesday.

Gafi will hold tenders for industrial zones to be established in the 6th of October City, 10th of Ramadan, Fayoum and Damietta in March and contracts will be awarded in April. But while the announcement falls in line with World Bank and USAID recommendations, it has drawn loud protests from investors for fears of monopolization by the potential operating companies.

Specialized industrial zones have long been established and run by the government to encourage the inflow of foreign and local investment. Under the government s control, low land prices and subsidized utilities were used to lure potential investors.

But under the new system scheduled for implementation in 2007, industrial zone operation is set for gradual transfer to the private sector to increase the quality of services provided and limit government interference, according to the Industrial Development Authority (IDA), a Gafi affiliate.

Investors, on the other hand, fear increasing land and services costs as a result, Mohamed Bahaeddin, Alexandria Business Association (ABA) vice chairman said at a seminar held Tuesday to discuss the potential effects of the new policy.

Investors are already overburdened in Egypt, Bahaeddin said. They cannot tolerate more costs.

Bahaeddin s comments came despite ongoing cooperation between ABA and the International Finance Corporation of the World Bank to ease government restrictions and bureaucracy on investors.

ADA Chairman Amr Assal has denied investors will be affected negatively by the private operation of industrial zones. Gafi, he said, has set strict rules to monitor the prices and quality of services offered.

All policies set to govern the zones will have to gain the approval of the authority prior to implementation, he added, and energy subsidies will remain in place.

Topics: FJP

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