Strategic companies: Either support them or stop intervening

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(Photo: JNews)
The government cannot deal with strategic companies using the same approach it adopts with the rest of the companies operating in the national economy, as their importance varies in accordance with their specialty.اضافة اعلان

For example, Royal Jordanian Airlines, in which the Kingdom has a near 80 percent stake, requires that the Treasury provide the necessary financial allocations to support the continuity of the company, so long as the government does not wish to operate it based solely on commercial standards.

Governmental intervention will not be free of charge. Since the government has bought back the majority of stocks, which it sold to a major investor in the privatization of 2008, it now has the duty to deal with the publicly traded company as an integral part of the state’s administrative body, or as a public sector institution.

Otherwise, the government must quit its stake in the company by selling its shares to the private sector, and leave the management of Royal Jordanian to be run purely on a commercial basis, without any governmental interventions into the company’s decisions.

The government also has more than a 70 percent stake in the Integrated Multi-Transport Company, which transports some 130,000 passengers every day, the majority of which are from lower and middle-income segments. The Greater Amman Municipality owns some 10 percent of the company as well.

The company has a large strategic importance in achieving significant social balance in society, by transporting a large portion of the population that cannot afford to buy their own vehicles.

Hence, the company is in need of direct financial support from the government, because the various defense laws have led to a drop in its revenues amounting to more than 75 percent at times, constituting major financial burdens that increased the company’s various financial liabilities, and reduced its capacity to continue investing in improving and developing transport services, and updating its various fleets and facilities.

This requires that the government look into the particularity of this strategic company from an economic, social, and political perspective.

The national giant that is the oil refinery has constituted one of the key pillars of Jordanian economic stability throughout decades, made sure that the Kingdom was never short of oil derivatives, and incurred government burdens and debts that would have been unbearable for any other entity.

Today, this major company is ushering in a key transitional phase for the national economy through its fourth expansion investment project, at an initial value of $2.6 billion, deemed the largest in the Kingdom and the most important of His Majesty King Abdullah’s reign.

This project will not see the light of day unless the government addresses it with all its strategic dimensions, and grants it incentives, and facilitations that ensure its feasibility on the one hand, and its swift implementation on the other.

The fourth expansion cannot be viewed with the same lens through which other projects and other investors and traders in the energy sector are viewed, and requires that the government constantly consider means of granting the company all exemptions that would facilitate and expedite the completion of the fourth expansion.

As long as the government wishes to intervene in directing the decisions of these companies, it must pay the price of such interventions, which, no doubt, have resulted in large financial burdens for them. Otherwise, the government must leave the administrations of these companies to operate on a commercial basis, independent from any ministerial intervention, and basing every decision on economic feasibility, without any official pressures.