Selling Jordan Telecom for JD 500.0 million

The Jordanian Government is almost certian to sell its majority shares in the highly profitable and successful Jordan TeleCom. The negotiations have been underway with France TeleCom, the holders of 40% of the current shares, and with the Jordanian tycoon Sabih Al-Masri who is offering the government 1.5 billion JDs to get hold of all the 81% shares of the government and France Telecom in the company. Jordan Telecom has also listed shares in the Dubai stock market promoting interest from many gulf investors as well.

If the government sells its shares in Jordan Telecom it will cash-in around 500-600 million JDs which will provide one of the biggest total privatization deals in the Middle East. France Telecom want additional 11% of the shares to reach the 51% majority shares. The government is said to set aside 3% of its shares for the Armed Forces and security personnel.

Two major questions will arise now:

1- Why should teh government sell its sahres in a highly profitable company? we have grasped the principles of privatization as a means to upgrade stagnant public sector companies and not successful ones. Jordan Telecom has transferred around 400 million JDs to the government since 2000 as profits, sales tax and other resources. Why should the government cut off this umbilical cord of money which aree xpected to increase in the future? The only answer is taht the Government desperately needs cash.

2- How will the governemnt spend the cash? will it be spent on salaries for the ever-expanding public sector, or will it be spent on infrastructure developemnt (meaning more corruption and stealing of public money) or will it be spent on fighting poverty and creating employment opportunities, or maybe it can be used to buy back Jordan;s debts?

The issue has not been discussed deeply in the budget debate in the parliament and the government has not provided a transparent plan on how to spend the money.

A more transparent and participatory debate should be initiated on how will the government spend the precious money resulting from the privatization of one of our most successful companies, and only one in 4 Jordanian firms listed in the pan-Arab 100 top companies. We are selling an important asset and we have the right to know where the money will be spent.