The Ministry of Finance will begin the Herculean task of restructuring the fiscal policies of a number of institutions beginning with the National Railway Authority, ports, public transport, water, utilities which are being transformed into holding companies.

The reform is careful to maintain the social aspect for these authorities which supply basic services to limited income citizens at reasonable costs.  The Ministry is careful to segregate the economic administration of the said establishments from their social role by assigning the economic cost on services while concentrating on subsidies through the State Budget and the setting up of independent economic entities with increased capital and cutting down on its debts to normal economic levels.  The policy will angle in on employment and the wage structures to attract the best in the work force.

Minister of Finance Dr. Youssef Boutros Ghali said that the Ministry has released a new plan to upgrade economic entities with the support of the private sector while simultaneously sustaining the social aspects of the establishments in efforts to activate investments worth 400 billion pounds.  Ghali explained that government ownership of the said assets has soared to 19.4 billion pounds, reflected in the State Budget for the fiscal year 2006/2007. The amount represents an increase of 12 billion pounds from last year in addition to 3.2 billion pounds from the treasury to boost economic entities such as the National Railway Authority and the Radio and Television Union both of  whose local and foreign debts are all or in part  paid by the treasury.
According to the Minister of Finance, the State Budget allocates 7 billion pounds to handle public sector debts to banks and another 7 billion pounds to handle financial mismanagement through a restructuring fund of some companies and economic establishments.  He said the plan aims at softening the financial burden on the State Budget and which amounts to 22 billion pounds. Ghali explained that a study has revealed that a number of the companies offset the performance of the State Budget excepting the Suez Canal Authority and the National Petroleum Authority both of which bring in surplus to the treasury.

Ghali has explained that most of the bad debt has been amassed in part due to the lack of balance between the cost and the price listing as well as the lack of flexibility of the pricing policies, dependence on loans, inactive departments, increased burdens, leading to the unreasonable return on capital of less than 1%.

The Ministry has also decided on liquidating non productive assets to pump in new investments that offer basic services with the support of the private sector without upsetting the social role of the entities.

On the other hand, to ration the cost of services, the State Budget has allocated 15.5 billion pounds or 7.1% for expenditure in the fiscal year 2006/2007.

Dr. Ghali affirmed that controlling stored goods compliments service requirements and government expenditures while attempting to cut down on the lost and the worn out commodities.  The idea is to exploit the stored goods and balance spending in addition to activating the market in collaboration with the government services authority and unifying methods of purchase and finding a national data base.

In collaboration with government services entity, the Ministry of Finance is hoping to generalize the method for centralized purchases on all ministries to activate uniformed prescriptions for brands while upgrading the quality and preparing a technical staff to handle the purchasing requirements for the government apparatus.

(source ministry of finance)