Amendment to law paves way for privatisation of state-owned companies

The Egyptian parliament approved on Wednesday to amend law no. 203 of year 1991 of the public business sector companies, and referred it to the committee of legalisation to prepare it for final voting. The public business sector consists of a number of holding companies owned completely by the state, and its general assembly is headed by one of the ministers, but the sub-companies could be firms owned by private shareholders besides the government. These companies differ from other public companies in that its boards of directors are independent from the government. The amendment faced widespread criticism because of its violations against labour rights, according to its opponents. The amendment also facilitates the liquidation of PBS companies with any losses.

The amendment included five main aspects, as follows:

  1. The board of directors of PBS companies are to include one or two representatives from labourers instead of half of the board elected by labourers, according to the old code. Additionally, the general trade union was deprived of its non-voting membership in the board.
  2. The managing director is to be a person other than the chairman of the company to allow more supervision over the director’s performance.
  3. The labourer’s share of profits, which is 10 per cent, is to be paid regardless of the company’s decision to pay profits to the shareholders. Additionally, the share could reach a maximum of 12 per cent.
  4. The government would be the decision maker in the case of losing companies whether to raise its capital or to liquidate it, eliminating the option of loaning from other governmental institutions and state-owned corporations.
  5. Regulations of work inside the company would be put in place by the administration without the approval of the general trade union, against the old code.

The Egyptian Trade Union Federation, which includes about 6 million workers, sent an official letter to the parliament on May 18 objecting to the amendment. The letter from ETUF warned that the new bail transfers the PBS companies to law no. 159 of year 1981 of the shareholding companies when 25 per cent of its shares became held by private shareholders, instead of 50 per cent in the old law, which eliminates labour supervision over it. Omayma Kamal, a prominent columnist, wrote that the government is exploiting the COVID-19 pandemic to pass its amendments with the cooperation of the pro-government parliament.