Development role of contracting companies needs expanding

The number of companies involved in upcoming state development projects should be expanded in the current period, according to Mohamed Adel Raouf, Member of the Egyptian Federation for Construction and Building Contractors (EFCBC).

Abdel Raouf outlined that public tender offers should restart, and direct assignments reduced. He added that the sector needs to provide opportunities to the largest number of companies that have the technical capabilities and labour to complete projects.

He also said that direct assignment should be limited to emergency cases with no tender procedures allowed, and offered to businesses specified under Law No. 89/1998.

The continued use of the direct assignment mechanism aimed at a limited number of companies presents its own hazards, as these companies were previously assigned a large number of projects.

Risks occur when those companies are unable to complete projects to high standards and in suitable time frames, as soon as challenges occur.

Abdel Raouf emphasised the importance of supporting small and medium-sized enterprises (SMEs) to nurture and expand the Egyptian market.

Abdel Raouf asked that the Central Bank of Egypt (CBE) request banks adopt new facilities for SMEs. He added that the swift dispersal of dues to construction companies is needed to ensure they have the required cash liquidity.

On Thursday, Prime Minister Mostafa Madbouly met with real estate development and contracting sector representatives to announce government investments in the draft budget for fiscal year (FY) 2020/2021.

These have been increased from EGP 150bn to EGP 230bn, to augment various development and service projects nationwide. Madbouly also announced the upcoming state projects during the meeting.