CAIRO, Feb 1: Egypt’s privatisation process Is slow but steady and the government is preparing 25 state companies worth three billion Egyptian pounds for sale in the next six months as part of its economic reform plan due to finish in 1995, an Egyptian Minister said, reports Reuter.

Atef Obeid. Mlnister-ln-Charge of Economic Reforms, linked Egypt's slow progress in reforming its vast inefficient public sector to lack of experience rather than weak commitment by the government.

"We prepared 25 companies — the equivalent of about three billion Egyptian pounds (900 million dollar) — for sales within the next six months, the Minister told Reuters in an interview.

"We want to privatise ... but we want do ft the right way .. the right way means we should assess the value of these companies, sort out companies that have to be liquidated ... sort out companies that can be profitably sold and companies that have to be restructured before offering them for sale, he said.

And this is not an easy Job to do.

Obeid, the Minister for Cabinet Affairs and Administrative Development, said that since Egypt embarked on the economic reform plan with the International Monetary Fund (IMF) and the World Bank in 1991, the government had sold assets and public investments worth 1-.2 billion Egyptian pounds ( 360 million dollar) Including hotels in Egypt's key tourism sector.

He said Egypt, which has 280 public sector.companies, was planning to prepare for sale 25 companies every three months once the process got underway.

Firms to be sold vary from steel and commodity-processing to food and include everything except strategic enterprises. Other government officials have predicted it would take Egypt 16 years to privatise its public sector. Obeid said the process depended on how much the market could absorb.

"We can set 1995 as a time period for completion of offering public sector companies for sale, except for the strategic firms, he said. But we can’t predict if we will have buyers.

The IMF and the World Bank signed agreements with Egypt in 1991 as part of a comprehensive economic reform deal worth 10 billion dollar debt forgiveness.

But both bodies have since complained of hold-ups In reforms and delayed their programmes.

Obeid said Egypt would sign the second review of Its first stand by facility with the IMF in March and would start negotiating the second stand by facility programme in February.

Completion of the first agreement was delayed In November because Egypt failed to meet targets for reducing its budget deficit and moved too slowly for the IMF’s liking on public sector reform.

Obeid said Egypt had taken steps to cut the deficit to the IMF target of 3.5 per cent of gross domestic product this year through increasing stamp duties and fuel oil prices,’and reducing subsidies and investment spending.

The deficit was 7.1 per cent of GDP in 1991-1992.

Obeid said the governments' main concerning privatising state firms was to avoid any rise in unemployment, which he put at 1.3 per cent.

He said the government was considering encouraging the private sector to hire more workers by paying part of their salaries in the first year.