Financial and legal pivots

Partnerships of the private sector have become one of the most distinctive systems to supply projects to the public in the last few years in most countries all over the world. This may be commensurate with the public policy of the state to reduce the public budget deficit of the state. Due to overpopulation and the pressing need for the basic infrastructure projects and the public utility service to develop, the partnership of the private sector with to the administrative authorities to implement such work has become an urgent matter. This made the private sector a very successful model in the last years in countries such as the UK, Greece, Germany, the Netherlands, South Africa and the USA.

The legal principal that allows for the partnership contracts with the private sector takes place in the framework of the law  (67) in 2010 with the issue of the law organising the participation of private sector in basic structure and public utilities project, which states the legislative frame controlling such long-term contracts. The periodic book number (2), issued by the Council of Ministers year 2015 to direct the ministers, gives the opportunity to the private sector to participate in financing part of the governmental projects in different fields, such as education. This is executed with permission from the economical ministerial committee of the Council of Ministers on NPBS.

The partnership contract is to include the nature and the zone of the contracted duties, the obligations of the two parties, and the ownership of the assets. The contract also includes the capital of the project and the receiving and delivery of the project site. Also included, are the rules of the transfer of ownership by the end of the project and other legal items which should be clearly stated in the contract between the two parties.

The partnership is held between the civic sector and the Ministry of Education and Technical Education in a way that guarantees both parties their rights and ensures the right of the Egyptian children to get better educational services for a simple financial recompense. The rights of the two parties are shown as follows:

Effects of the obligation contract

The rights of concessionaire

1- The rights of the obligation granter authority (Ministry). 1- The censorship right of establishing and managing the public utility (school).
2- The censorship right of establishing and managing the public utility (school). 2-The right to obtain the privileges stated by the obligation granter.
3-The management right to amend the draft texts in the solitary will. 3-The right of the concessionaire to guarantee the financial balance of the contract.

The rights of the beneficiaries in the obligation contract

Confronting management

The management observes the progress of the public utility and the ability of the concessionaire to manage the public utility and to adhere to the ruling bases in the public utility activity. The most important base is to equalize among the beneficiaries in the service of the public utility and not to raise the prices and the service presented. The management is not allowed to assign the concessionaire to manage the public utility, and then subsequently leave him without monitor. The censorship guarantees the benefits of the people with the service of the utility.

Confronting the concessioner
The service is to be presented to the beneficiaries as stated in the terms of the contract between the obliging authority and the contracting party.

The mutual benefits between the Ministry and investors

The mutual benefits between the Ministry and the investors must be highlighted. This in turn will reflect on the quality of the education that the Egyptian students will harvest, being the beneficiaries of these services. These benefits include the following:

 

 

 

Ministry benefits:

  1. Innovating, reducing waste, and increasing the efficiency of work
  2. Acquiring a finished project at the end of the concession duration without enduring any burdens.
  3. The government controls the project strategically.
  4. Creating new job opportunities.
  5. Raising the quality of educational service and cutting down the costs
  6. Decreasing the burdens put on the state budget and the expenditure.
  7. Employing the local capital and widening the use of such capital.
  8. Attracting foreign and local investments.
  9. Decreasing the cost and the time needed to build and operate the educational service.
  10. Importing new technology and developing it locally.

 

Investors’ benefits:

  1. Providing an excellent opportunity for the investors to participate socially in the national goal of education
  2. Investing in a secure domain- Human Resources
  3. Taking the advantage of all the suspended tax privileges for the investors by the state
  4. Receiving an excellent investment opportunity due to the long duration of the usufruct—30 years plus 10 years
  5. Taking advantage of the labor force in Egypt
  6. Taking advantage of the relative privileges, such as in the low cost of the salaries
  7. Taking advantage of governmental support to those who invest in education. This support is represented in the provision of land and other facilities.