Under severe strain caused by the devaluation of the national currency, building contractors in Egypt are being urged to continue working “until the last breath of their funding capabilities” or risk economic turmoil and social unrest.
The head of the Egyptian Federation of Construction and Building Contractors, Hassan Abdel Aziz, called on contractors to finish all government tendered projects after meeting with industry representatives this week to discuss the “catastrophic” impact of shutting those projects down, news site Egypt Independent reported.
He warned of total economic stagnation, rising unemployment and social unrest if work were to stop.
In November 2016 Egypt floated its pound as a condition of getting a $12bn bail-out from the International Monetary Fund, causing the pound to lose more than half its value against the dollar, which sparked a dramatic hike in the cost of imported materials and the decimation of expected profit margins.
Contractors have also been hit by other austerity measures, including a value added tax law, rising interest rates for project funding, and restricted fuel subsidies, according to Abdel Aziz.
Responding to industry calls, the government has set up an emergency committee to calculate how much more companies should be paid, since original contract prices reflected a currency pegged at 6.9 pounds to the dollar when it hovers now at around 16 pounds to the dollar.
Abdel Aziz pledged to continue efforts to speed up the discussion of a compensation bill for contractors.
Image: Cairo International Airport Terminal Building 2 under construction (Courtesy of Rowad Modern Engineering)
