Sisi new compensation law targets Egyptian Contractors

CAIRO - 12 July 2017: President Abdel Fatah al-Sisi has officially issued law 84 of 2017 on Wednesday targeting compensation for Egyptian contractor losses due to local currency devaluation.

The law calls for the establishment a supreme committee of compensation, which will be placed within the Ministry of the Housing, Utilities and Urban Development.

As explained by a statement released from the State Information Service Center, the newly formed committee will define compensation rates for each company that has suffered losses due to the harsh economic conditions between March and December 2016.

Contracting and construction companies have been challenged by economic hardships such as the devaluation of local currency, increases in custom taxes and Value Added Taxes (VAT). As a result, companies have demanded that the government provide compensation for the differences in construction material prices before the devaluation and their current prices.

President of the Egyptian Federation of Construction & Building Contractors (EFCBC) Hassan Abdel Aziz previously announced, during the ‘Egypt Builders’ conference held last March, the bankruptcy of over 1,000 contracting companies out of 30,000 contracting companies operating in Egypt.

The bankruptcy occurred throughout 2016.

Due to a delayed approval of the law, all related project deliveries have also been delayed.