Public interest in the misfortunes of the financially troubled Jordan Phosphate Mines Company (JPMC) has gained renewed momentum with Parliament asking the government to open the file of the firm that was once the mining industry's flagship.
Forty-two deputies have signed a petition demanding a parliamentary session to discuss the company's financial, administrative and technical woes and to hold accountable all those who contributed to the downturn of events.
Separately, Deputy Abdul Karim Dughmi has asked the government to provide him with a list of "advisers" employed by the JPMC, turned by successive governments into a cash cow and an employment agency.
Most of these advisers, including a deputy and former senior officials of the company, get handsome payments at the end of every month even if hardly any of them shows up for work.
We hope that the government of Prime Minister Ali Abul Ragheb will act quickly on both requests as it has nothing to lose and much to gain in the eyes of a population still waiting for official anti-corruption pledges to materialize.
Abul Ragheb, who is personally looking into plans to restructure the firm facing an accumulated debt of over JD350 million, has worked out a plan to salvage the company and stop its financial bleeding ‹ the listed company's net losses for 2000 are estimated at JD59 million.
For, the government has to insure that the company does not default on its $100 million Eurobond issued in 1995 as this would not only harm the company and the credit rating of the country, but would also scare away potential investors.
Under the new scheme expected to kick off soon, some of the debts will be capitalized, and the company's Aqaba complex, which includes a fertilizer and chemicals plant, will be separated from the JPMC and run on a commercial basis. And some of its services including mining, transport and maintenance, will be sub-contracted.
But this means that the government will still have the right to impose regulations on the quantity and quality of mined products and to ask the private operators to hire much of the workforce in addition to renting or buying the equipment used in these areas.
Therefore, we hope the government will reverse a ban on foreign investment in the potash and phosphate sectors and allow a strategic partner to acquire a major stake in the JPMC, which has a monopoly in mining phosphate for an unlimited period of time.
In the back of the minds of every official should be the successful experiment of privatizing the country's cement company, a process that has increased efficiency and boosted revenue.
Consecutive government meddling in the JPMC's hiring policies and subjecting the company to various taxes, including a mining fee of JD5 per tone (compared to 30 cents in the US), has led the company to adopt drastic measures to reduce the size of its over 6,000-person staff under a costly plan that contributed to this year's losses.
But ahead of its privatization, the company needs to clean up its balance sheet, slash its workforce by less than half and reduce government fees to enhance the company's competitiveness and allow it to invest more strategically in production technology and human resources development.
This will allow the company to focus on developing better marketing strategies and penetrate new non-traditional markets. In addition, it needs to devise a "transparent" long-term strategy for its operations, cash and asset management, which at present it clearly lacks.
We really hope that the government will have the vision to take the courageous step to attract a strategic partner instead of opting for partial privatization. ¯ (Jordan Times)
© 2000 Mena Report (www.menareport.com)
