Egypt

Egypt - Port Sector Reform Project (Vol.1), 1998/05/15, PID6479, Project Information Document

The overall development objective of the project is to improve the efficiency of Egyptian ports and ancillary services through regulatory reform, commercialization of sector agencies, and development of a privatization plan and labor redeployment program for selected organization units.

The project is designed to develop regulatory, institutional and financial arrangements in the ports sector which will enable greater private sector participation and the effective privatization of existing public sector enterprises operating in the country's ports.

Corporatization of the Maritime Sector. Defines appropriate organizational structures and financial management systems for port sector entities, and provides a process for implementing the recommendations identified in the first two components. Specific activities include: (i) creation of a new structure of corporatized organizations in the sector and assist in its implementation; (ii) restructure the financial management systems for port sector entities to make them autonomous and self-financing; and (iii) define a phased privatization plan for future implementation and develop a redeployment program for surplus labor.

Egypt - Port Sector Reform Project (Vol.1), 1998/05/06, 17773, Project Appraisal Document

Key performance indicators:
Phase III: Blueprint for an autonomous, self-financing and competitive port industry established, corporatization program initiated, and a privatization plan for selected units accepted by concerned agencies.

Key policy and institutional reforms supported by the project:
Port operations will be commercialized, and wherever feasible, be entrusted to the private sector through operating agreements or concessions, and Port Authorities will seek to ensure that each operating company faces competitive pressures either from: (a) other ports; (b) internal competition within the port; or (c) through a process of rebidding concessions after a specified period of time;

Risk: Resistance from labor to corporatization, privitazation, and/or the redeployment program for surplus labor.
Risk Rating: High
Risk Minimization Measure: Information sharing and input from affected labor groups. Possible funding of redundancy scheme through the Social Fund, or donor agencies

Possible Controversial Aspects:
Redeployment program for surplus labor. The project will develop a comprehensive plan to deal with the issue of redundant labor. Such a program for the redeployment of labor will be designed in close coordination with labor unions and local governments to ensure as much cooperation as possible. Despite these efforts, labor redundancies may prove difficult, especially in view of the location of most ports in politically sensitive major urban areas of the country.