Govt to Review Tenders Concluded prior to Pound Flotation

The chairman of the Federation of Industries, Mohamed Al-Sweidy, announced the approval of the Cabinet on the formation of a government commission to review tenders and contracts between the government on one hand and companies and factories on the other hand, after the flotation of the Egyptian pound.

"We got the government's approval to re-examine these tenders after the floatation of the pound. The flotation has had a negative impact on production costs and has threatened the ability of companies contracting with the government to stick to the contracts," Sweidy added.

The factories' production capability started to recover on the back of recent economic reform measures, said Sweidy, pointing out that the pound flotation was "going well" despite being a "bold" step.

Industries that were damaged and had to reduced production capacity due to problems with the foreign exchange market have gradually begun to recover and restore their production ability, he said.

Sweidy expected problems with the foreign exchange market to disappear in maximum two months.

He foresees a need for reforms related to the price of natural gas supplied to energy-intensive factories and pharmaceutical companies, as well as a need to substitute the subsidized commodities with cash money.

Gas prices have increased in some industrial sectors where the rates are estimated in US dollar, he said, adding that the federation has submitted a proposal to the Cabinet to provide gas prices in accordance to international prices.