Egypt PM Orders Gas Contract Price Review

Source:

"Review of all deals could bring additional $3–$4 billion in income for Egypt."

Egypt's prime minister on Wednesday ordered a review of natural gas contracts to Israel and Jordan, in the government's latest bid to appease growing frustrations that it's moving too slowly on reforms after Hosni Mubarak's ouster.

The move is the latest in a year-old battle over Egypt's natural gas exports to Israel—deals that critics argued provided the Jewish state with sharply discounted gas. . .one of the symbols of the cronyism prominent in the former government.

The PM's spokesman, Ahmed El-Samman, said the premier ordered the review for all of Egypt's gas deals with other countries, which could bring in an additional $3–$4 billion in income for Egypt.

The announcement came on the same day that Mubarak and his two sons were detained amid investigations on accusations of corruption, abuse of power and killings of protesters.

The gas deal has been the subject of litigation in Egypt, most recently with an appellate court in February overturning a lower court ruling that would have halted gas exports to Israel. Opposition groups, that filed the suit in November, claimed that Israel got the gas too cheaply under the 15-year fixed price deal between a private Egyptian company, partly owned by the government, and the state-run Israel Electric Corporation.

Former Egyptian diplomat Ibrahim Yousri, who brought the issue to court, cautiously welcomed the announcement, but voiced concern that it would amount to another unfulfilled pledge by officials.

"It's not a matter of reviewing, it's a matter of deciding," said Yousri. "Reviewing the contracts is something that's been told to us by [former oil minister] Sameh Fahmy hundreds of times.

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe