New third-party proposal to modernize Egyptian Iron & Steel Company could hijack liquidation plans

An offer by a Ukrainian company to modernize and operate the Egyptian Iron and Steel Company could reverse liquidation plans that have endangered the jobs of 7,000 Egyptian workers, State Enterprise Minister Hisham Tawfik said this week. .

Protests against the shutdown of Iron and Steel, once the pride of Egypt’s booming industrial sector after independence, have erupted several times since January’s decision to liquidate the company. In the latest incident, 10 workers were detained for two hours after a spontaneous sit-in organized by employees after the company’s last oven suddenly went out in May.

An official offer from the Ukrainian government company Vazhmash to rehabilitate and develop the Helwan iron and steel plant through a profit-sharing program with the Egyptian government has been submitted and is currently under consideration, said Metallurgical Industries. Holding Company, the state-owned parent company of Egyptian Iron and Steel, in a letter to the Egyptian Stock Exchange on Tuesday.

Confirmation of the proposal’s submission came after the Minister of Public Enterprises told the hurry Monday that a “serious” offer had been made by a Ukrainian company to develop and operate the Egyptian steel industry.

“It is possible that the Egyptian steel industry will be recalled from liquidation – just as El Nasr Automotive Manufacturing Company was recalled to service seven years after a decision was taken to liquidate it – if the Ukrainian offer is viewed positively. and includes serious financial guarantees ”, mentionned Tawfik.

For Mohsen Bahnasy, one of the lawyers representing the workers and several shareholders in an ongoing lawsuit challenging the liquidation decision, the Ukrainian offer also supports the view that the liquidation decision was rushed despite the existence of other alternatives, adding that this could strengthen the position of the Complainants Case.

According to the official offer, of which Mada Masr obtained a copy, the Ukrainian company’s proposal consists of a 36-month modernization plan to increase the plant’s production capacity to 1.2 million tonnes under the management of Ukrainian society, followed by a period of 20 years. during which the company would be jointly managed through a partnership between Vazhmash and the Metallurgical Industries Holding Company.

In return for funding the required investment, Vazhmash proposed a profit-sharing scheme whereby he would take 90 percent of the profits while the holding company would take the remaining 10 percent.

Still, Vazhmash conditioned his bid on Egyptian Iron and Steel slate to be wiped off debts, which the Public Enterprise Ministry said. mentionned amount to LE 10 billion, with Vazhmash proposing that the holding company pay all unpaid contributions before the transaction is finalized.

The offer also commits to keeping 4,000 of the current 7,000 workers on the payroll, with expenses for each worker averaging US $ 500 per month, including wages and other benefits, such as insurance. disease. The fate of the company’s other 3,000 workers is unclear.

Vazhmash’s offer comes three weeks after the closure of the Egyptian Iron and Steel Company’s last operating furnace and the appointment of an official party to handle its liquidation. Instructions issued in May also prohibited company bus drivers from transporting workers to the Helwan plant.

Negotiations between the state and the company’s trade union committee on severance pay for the company’s workforce are still ongoing, with more than 7,000 monthly payments, end-of-service pay and severance pay. health insurance benefits at stake.

An official from the General Union of Engineering, Metal and Electrical Workers, the parent union of workers in the sector, told Mada Masr on Tuesday that the union had reached a preliminary agreement with the Minister of Main. -working Mohamed Saafan, who acts as mediator for the union in talks with the Ministry of Public Enterprises. The agreement is now awaiting a response from the Minister of Public Enterprises.

In May, after negotiations between the Public Enterprise Ministry and the parent union, workers were offered a minimum compensation rate of LE 250,000, only LE 25,000 more than an initial LE 225,000 offered. by the ministry, which capped the maximum compensation rate. at LE 450,000. A member of the company’s trade union committee told Mada Masr at the time that the workers refused the offer.

As it stood in May, the agreement would have provided for an exceptional monthly allowance paid to people who have worked in the company for more than 25 years, at the rate of LE 1,200 per month until the age of 60, after which they would receive a pension. The union committee first asked for a rate of 2000 LE. The committee’s source said in May that they were still negotiating whether workers would receive health insurance.

The Ukrainian company’s intervention follows a series of attempts to modernize the company and repay its debts by workers and their representatives on the board of directors. The holding company said members of the company’s board of directors who opposed the liquidation decision “resigned” in October, leaving the holding company to rephrase the board of directors and approve the decision to separate the facilities. Egyptian Iron and Steel Company mining and quarrying into a new company. , in a meeting that workers were seeking to stop in a lawsuit at the time.

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