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Contracting sector seeks banking assistance to implement major national projects - Daily News Egypt

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Contracting sector seeks banking assistance to implement major national projects

Banks are rejecting the issuance of letters of guarantee if projects belong to the Sinai region and the Suez Canal area, says Daker Abdellah

The contracting sector’s ability to implement major national and developmental projects in the Suez Canal area, the Sinai Peninsula, and the Administrative Capital, depends on the amount of support granted, especially from banks and insurance companies, said Daker Abdellah, a member of the Egyptian Federation for Construction and Building Contractors (EFCBC).

According to Abdellah, who is also a member of the Egyptian Businessmen’s Association (EBA), many banks refuse to letters of guarantee to contracting companies if the projects to be implemented are located in the Sinai region and the Suez Canal area. This is against the general orientation of the state, and hinders development in these areas.

Abdellah recommends that banks adopt projects belonging to contractors that support small and medium-sized companies, and provide them with the needed funds to implement the projects. In addition, banks should allow opportunities to compete over major projects.

Abdellah added that only 300 companies in the building and construction sector are able to obtain bank loans, as they have technical and financial departments, and meet the banks’ requirements for obtaining funds.

On his part, Chairman of the Housing and Development Bank (HDB) Fathy El-Sebai asserted that banks wishes to be involved in the development projects in Sinai, and provide the needed funds to companies that will implement the targeted projects in that area.

He added that the HDB has a branch in Al-Arish that has not halted or suspended its activity, in spite of the difficult security and political circumstances in the area.

General Manager-Head of the Corporate Division at Banque du Caire, Ayman Mokhtar, also said banks began studying the mechanisms and programmes for supporting small-sized contractors, to limit the obstacles they face.

Mokhtar added that governmental banks deal mostly with small and medium-sized companies, as they are the most geographically widespread.

“The banks face difficulty in issuing letters of guarantee to companies, as there were letters issued to companies 10 years ago but that have not yet been retrieved because the projects did not come to an end, which makes the banks’ mission to grant new letters of guarantee for these companies difficult,” Mokhtar said.

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