The Sinai Coal Company suffered huge financial losses which in March 2005 stood at LE1.096 bn, according to a report on the company which is currently being wound up.
The company, established in 1988 under the Egyptian Mineral Resources Authority, was mainly responsible for the reactivation of the Maghara mine in Arish, North Sinai, where it faced technical, funding, and marketing problems, leading to a production halt and eventually a dissolution decree in 2005.
The report by the company’s liquidators says the Maghara project utilized equipment that could not be re-used for other projects, making it impossible to sell on the equipment.
The report, which Al-Masry Al-Youm has obtained a copy of, notes that the cost for extracting the equipment, buried underground, was greater than the re-sale price. The only buyers keen to purchase the equipment were junk traders.
The report flags a number of technical problems facing the process of the company’s dissolution. These include the need for spare parts for the Maghara project’s power station–some of which are preserved in stocks, while the rest have been sequestered by the Ministry of Justice. An overhaul of the station requires huge sums of money, but the company’s liquidators cannot afford the cost.
The project’s water station has also been inoperative for two years, and the fleet of vehicles serving the project sold off to the National Organization for Social Insurance. The report notes that th sale was marred by a number of legal violations.
Debts owed by the company reached LE2.901 million in December 2009, according to the Central Auditing Organization (CAO).
Translated from the Arabic Edition.
