AMMAN — Prime Minister Awn Khasawneh on Wednesday said the government will review all privatisation agreements, and may end up repurchasing some state assets from the private sector.
During yesterday’s Lower House session, conducted upon a request by 28 deputies to question the government on the privatisation of the phosphate, potash, cement and telecommunication companies, the premier noted that the privatisation of state-owned companies was carried out according to a legal framework since the process was launched late last century.
Khasawneh said privatisation is an economic and social approach that has positive and negative aspects, explaining that the success of any privatisation endeavour is based on several factors, including a transparent mechanism and a set of laws that prevent manipulation.
Responding to some deputies who quoted him as likening the privatisation process to an “act of stealing public funds”, Khasawneh said “there is some suspicion surrounding the privatisation process that makes one say so and that is why the government will revisit all privatisation agreements”.
“It is probable that the government would buy back some of the state’s assets sold under privatisation, despite the fact that the financial situation does not permit it,” the premier said.
Several MPs called for forming investigation committees into the privatisation of the said companies, calling on the government to conduct a comprehensive review of the privatisation process and restore all sold assets to the treasury.
Others argued that the country’s interests were not taken into consideration when state-owned companies were sold to investors, indicating that the process has given the private sector the upper hand in the national economy and weakened the public sector.
Some deputies noted that the consecutive administrations’ ill-management of the mining and telecommunication companies had “destroyed these national firms”, paving the way for their privatisation.
Deputy Abdul Rahman Hanaqtah (Tafileh, 1st District) called for referring the privatisation agreements of the phosphate and potash companies to the Higher Council for the Interpretation of the Constitution to check their legality.
Citing articles 33 and 117 of the Constitution, Hanaqtah questioned the legality of these two agreements as they were not referred to Parliament for approval.
According to Paragraph B of Article 33 of the Constitution: “Treaties and agreements which involve financial commitments to the treasury or affect the public or private rights of Jordanians shall not be valid unless approved by the National Assembly.”
Article 117 of the Constitution reads: “Any concession granting a right for the exploitation of mines, minerals or public utilities shall be sanctioned by law.”
Hanaqtah’s argument was supported by Deputy Wasfi Rawashdeh (Maan, 2nd District), who described the two agreements as “unconstitutional”.
Industry and Trade Minister Sami Gammoh briefed lawmakers on the benefits gained by privatisation.
Gammoh explained that the process has contributed to enabling the national economy maintain “positive growth rates”, increasing foreign reserves, decreasing public debt, boosting investments, upgrading the quality of services offered to citizens and creating job opportunities.
The minister noted that selling state-owned companies has pumped around JD1.7 billion into the treasury, a large portion of which was used to pay and restructure part of the foreign debts.
Gammoh added that the revenues generated out of the taxes and fees imposed on privatised firms reached JD325 million in 2008.
Concerning Jordan Telecom, whose 51 per cent shares were sold to France Telecom in 2006, the minister pointed out that the government has used 82 per cent of the revenues to pay off international debts, which decreased the public debt from 100 per cent of the gross domestic product in 2000 to reach 89 per cent in 2004.
He also indicated that the privatisation of the Jordan Telecom has resulted in upgrading the quality of the services offered to citizens.
In 2008, the French Lafarge Company purchased 50 per cent of the Jordan Cement Factories, which became the Jordan Lafarge Cement Factories Company, the minister said, adding that, since then, public revenues from the company have been increasing steadily, reaching JD52 million in 2009 and JD34 million in 2010.
Gammoh added that the direct aim of privatising the cement company was to find a strategic partner that can help the firm open new markets and boost its productivity.
The House is scheduled to continue discussing the privatisation of the four companies today.