House panel to examine investment fund bill

AMMAN — The Lower House on Sunday referred the draft investment fund law for 2016 to its Economy and Investment Committee for review amid reservations over the proposed fund. 

In their preliminary remarks, some MPs suggested the bill should be rejected, citing concerns over establishing a new independent public institution. Financially and administratively, independent government units have been the centre of a debate over necessity, especially since they consume a large part of the state budget. 

Based on the same rationale, other lawmakers called for merging the planned fund with the Investment Commission or other entities of similar nature.

The spending bill of independent public entities for 2016 is around JD1.9 billion with a deficit forecast to reach JD376 million.

Responding to deputies’ remarks, Prime Minister Abdullah Ensour said that Saudi Arabia is interested in investing in Jordan and wants to protect its investments and seek incentives and facilitation. 

He also said the new law exclusively concerns the sovereign funds of other states, adding that the government is in negotiations with Saudis to benefit from them.

Jordan and Saudi Arabia have recently agreed on a joint coordination council to oversee investments by the Saudi Public Investment Fund.

Bassem Awadallah, King’s special envoy to Saudi Arabia, told Bloomberg in a phone interview after the deal was signed that the envisioned investments “will be the largest in Jordan in decades” and “will unblock billions of dollars” for the Kingdom. 

The coordination council, which will meet alternately in Amman and Riyadh, will decide what to invest and in which sector.

“We need major investments in leading sectors of the economy that will create jobs, that will have multiple effects, that will increase our exports and open up our markets,” Awadallah said in the interview. 

The premier also told lawmakers that the mega projects included in the law will enjoy special incentives and exemptions, adding that the capital of the envisioned investment fund has not been defined yet and will be left for the future.  

The bill allows sovereign funds and Arab and foreign investment institutions to invest in a set of projects specified in the bill.

Under the draft law, a fund named “Jordan Investment Fund” is to be established as a legal person of financial and administrative independence, thus able to possess movable and immovable assets and conduct all necessary legal measures to achieve its goals.

The draft law stipulates that the fund has the right to possess, invest and develop the following projects: the national railway network, the electricity interconnectivity project with Saudi Arabia, the pipeline to transfer crude oil and fuel derivatives to the Jordan Petroleum Refinery Company, and consumption and storage points.

Article 8, Paragraph A stipulates that sovereign funds and Arab and foreign investment institutions are to establish a shareholding company or more to invest in development rights and in projects listed in the bill.

In his speech from the Throne at the beginning of the 17th Parliament’s ordinary session last year, the King directed the government to present a draft law for an investment fund to implement national development projects that benefit the economy and those who contribute to the fund.

“This fund should attract investments from banks, Arab sovereign wealth funds, private sector enterprises and individuals, targeting national developmental and pioneering projects that yield benefits to the national economy as well as those contributing to the fund,” His Majesty said.