Compensation Law rescues 5,000 construction companies from bankruptcy: Egyptian Federation for Construction
SahlAl Damrawi,member of the Egyptian Federation for Construction and Building Contractors, said that the issuance of the Compensation Law saved more than 5,000 construction companies from bankruptcy and the laying off thousands of workers.
Al Damrawi said that these companies were challenged with the rise of all prices of building materials, which have doubled in most raw materials,as well as the high wages of workers and the rise of bank interest on financing.
He added that all these elements forced most employers to sell their property to provide liquidity due to the interruption of disbursement from companies because of delays in the completion of projects.
The issuance of the law is a gesture of hope for paying a portion of the price difference of raw materials, which will reduce losses and allow companies to start to complete work immediately.
Al-Damrawi appealed to the state administrative agencies,headed by the Supreme Committee for Compensation, to speed up, simplify, and clarify the controls of paying dues,further to be approved by the cabinet in order to enable the government agencies to pay the compensation approved by the law.
On 15 July, the Ministry of Housing sent a proposal on the proportions of compensation for construction companies, which is supposed to be studied in the committee that will be formed by the prime minister to study these percentages and the award of compensation, according to Deputy Housing Minister Hisham Darwish.
Darwish said that the spending on compensation is expected in August.
From his part, head of the Egyptian Federation for Construction and Building Contractors Hassan Abdel Aziz said that there are 2,400 construction companies that have been bankrupt since the liberalisation of the Egyptian pound exchange rate in 2016.
In early May,contracting companies submitted a petition to Prime Minister Sherif Ismail to intervene to save the Egyptian construction companies from layoffs and bankruptcy by issuing a cabinet decision to extend the duration of projects during 2016 for six months, starting with the announcement of the Compensation Law in AlWaqaae Al-Masriya.