30 companies ask for compensation for price differences in contracts with Electricity Ministry
30 companies operating in the field of supplying electric equipments filed official requests to the Ministry of Electricity to obtain partial compensation for the losses they suffered after the flotation of the Egyptian pound.
Sources at the Ministry of Electricity said that the ministry is studying the requests of the companies that supplied distribution panels, electric kiosks, transformer stations ,cables, and electrical wires for electricity production and distribution companies.
The sources told Daily News Egypt that the Egyptian Electricity Holding Company (EEHC) is considering compensating the companies by up to 30% of the contracts’ value for long-term contracts that were concluded through tenders posed by the EEHC prior to the flotation.
The sources explained that the companies will not stop completing their supply contracts, but they want to get compensation, especially as they incurred losses of up to 70% after the flotation.
In January, the companies contacted the EEHC to obtain compensation for the losses they suffered. Officials advised them to send the requests again to present them to the cabinet.
The sources said that the committee, formed by the EEHC, proposed earlier that the Ministry of Electricity can bear 40% of the price differences that resulted from the exchange rate difference following the flotation to ensure that companies do not stop supplying.
Among the companies seeking compensation for the losses they suffered are ABB, El-Alamia Cables, Egemac, Egypt Cables, and Giza Cables Industries.
Head of El Alamia Cables, Ghassan Boulbol, said that the company submitted requests to the EEHC to obtain losses after the flotation, adding that the EEHC advised them they can be compensated by 10-30% of the contract value, even though the company suffered losses of 70%.
He explained that the losses of the company resulting from the differences in prices following the devaluation amount to EGP 40m. He noted that the Ministry of Electricity was supposed to bear half the losses, but no decision has been made until now.