Government mulls establishment of steel factory with Gulf partners

Egypt's Holding Company for Metallurgical Industries is in negotiations with group of Gulf investors to establish a steel factory, with preliminary costs of LE2 billion, in a partnership between public and private sectors, said Zaky Bassiouny, the head of the company.

Bassiouny told Al-Masry Al-Youm that the company must be granted the use of the factory premises on a rent-free basis once negotiations are over in order to create cash for to cover investment costs.

He added that the government had stepped back from its previous decision to establish a steel factory in partnership with the private sector, thereby giving the government the majority of shares in the enterprise.

Former Investment Minister Mahmoud Mohie Eddin announced in November 2008 that arecent feasibility study for a steel factory would be revised and that the government, represented by the holding company for mineral industries, would build a factory to produce 5.1 million tons annually.

Some observers think that the steel industry in Egypt will witness a recession, particularly after a court ruling against former steel magnate and parliament member Ahmed Ezz. Ezz was sentenced to 10 years in prison for corruption, and the government has confiscated his factories' licenses.

Translated from the Arabic Edition

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