Daker Abdellah, member of the board of directors of the Egyptian Federation for Construction and Building Contractors (EFCBC), warned of a delay in the parliament’s approval of the compensation law, as it has not yet set a certain date for its discussion. He noted that the delay of issuing this law is set to lead to the exit of many construction companies from the market.
The Speaker of the Egyptian Parliament, Ali Abdul Aal, has sent back the compensation law to the State Council or the joint committee of housing and planning for amendment.
The situation of the construction sector has become catastrophic, as the vast majority of small and medium-sized companies have left the market. Some of these companies’ owners have fled the country to save themselves, declared bankruptcy, or have been jailed over accumulated dues. Other companies tend to cheat their suppliers to compensate for part of their financial losses, according to Abdellah.
He pointed out that many construction companies have already pulled their workers from project sites, after they ran out of working capital and suffered from a lack of financial allocations to complete the implementation of projects. He added that there are many stalled projects due to this crisis.
Abdellah warned that the exit of these companies from the market will affect all state developmental plans, while the government meanwhile has great hopes that the construction sector will solve Egypt’s current economic crisis through the implementation of infrastructure of national projects to attract foreign investment.
The current law that calculates the price differences of building materials does not guarantee the rights of construction companies, according to Abdellah.
He added that the intransigence of the financing of the banks dealing with construction companies has added insult to injury, as they wanted guarantees of the companies’ ability to complete the implementation of projects to ensure repayment of their letters of guarantee obtained by the companies.
Abdellah called for President Abdel Fattah Al-Sisi to consider the problems of the construction companies and take on challenges, such as the intransigence of the banking sector and the delay of approving the compensation law, in order to protect the sector from collapse and implement targeted development plans.