Egypt needs more contractors

29 March 2016

Existing contractors are struggling to meet capacity requirements

Egypt’s developers are calling for more contractors to enter the market as existing players struggle to meet the capacity required for the current development cycle.

Developers, project managers and even contractors operating in Egypt believe that more companies must enter the market to help ensure that the scale of projects being proposed can be delivered.

Following the years of the 2011 uprising, Egypt’s construction sector was served a major blow as developers and banks stalled projects amid changing political landscapes, security concerns and wider economic woes. But now as Egypt looks to press ahead with major schemes across the country, many are calling for more contractors to enter the market despite ongoing concerns.

Major foreign players such as the Athens-based CCC and the UAE’s Al-Shafar are already operating in Egypt despite the volatile currency situation. Project managers and cost consultants have warned against the anticipated hike in claims, which is expected to prevail in the coming months following monetary changes by the central bank.

Nonetheless, foreign contractors are being encouraged to enter a market which is expected to offer opportunities across a number of sectors. Egypt’s project pipeline may be ambitious in size, and at times problematic in terms of execution, but local developers are in need of large foreign firms to come and provide expertise and quality that is often only found within a handful of firms who are already tied up with a number projects.

Despite a slowdown in foreign direct investments as the government continues to struggle to offer a favourable business environment, Egypt’s project market is likely to offer ample opportunities for contractors as local and international developers who have been operating in Egypt for a while look to restart many stalled schemes.

International firms had previously been weary of the Egyptian market due to a culture of directly negotiated contracts for major schemes such as the Cairo Metro, the Capital City and the Suez Canal expansion. Since Egypt’s new economic roadmap in early 2015, many construction contracts were directly negotiated and linked to the project’s financing. At the time, the government opted for such procurement methods to push ahead some of its most urgent projects.

It is understood that the government will now revert to competition-driven procurement processes, which will in turn, encourage more international players to enter the market at a time when Egypt needs it.


Hossam Abougabal


A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications