The news that a contract award on the estimated $770m Mall of Egypt development in the suburbs of Cairo is close provides the latest sign that Egypt’s construction market is beginning to recover.
UAE developer Majid al-Futtaim (MAF) Group, the client for the project, is now evaluating the final proposals from two groups before it makes a decision by the end of September. Progress with the project provides a welcome boost to Egypt’s construction sector, which, as with most of Egypt’s industries, has suffered since the uprising that ousted President Hosni Mubarak in February 2011.
Egypt’s construction sector has been at a standstill since the president was removed and the government disbanded in early 2011. Developers and contractors were left hanging as investment dried up and banks became wary of financing real estate schemes.
Despite some political uncertainty persisting, the election of a new president in June this year and an underlying confidence in the economic potential of Egypt has resulted in renewed impetus for major development projects.
The estimated $1bn Grand Museum is one scheme that has gained momentum. The tourism sector is a major contributor to Egypt’s economy, and the new museum will form a cornerstone of the country’s tourism industry. Cairo is aware of the importance of ensuring such schemes go ahead and after numerous delays ground was broken on the project in June.
Contracts have also been awarded for hotel projects, bank headquarters and an 85,000-seat stadium in recent months. With uncertainty and controversy still surrounding Egypt’s new government, and the country’s economy continuing to struggle, it will be a long road to recovery for Egypt’s construction sector. The country’s long-term potential will ensure that it offers attractive propositions for contractors when stability returns.