Alaa Abdel Aziz: Return of the 8% Initiative is a Lifeline for Construction، Property Investment Cos

Eng. Alaa Abdel Aziz، CEO and Managing Director of Construction and Design Co. "Constec"، confirmed that the sector is facing، in the current times، several challenges، all of which have contributed to companies suffering from liquidity shortage crises، which threatens the capability of some of them، especially small and medium companies، to continue in the market.

A decline in the number of tenders

He stated that the time being is witnessing a decline in the number of tenders and works submitted to contractors compared to previous years، as well as the instability of exchange rates، the constant rumors from time to time about the rise in foreign currency، the continuous increases in the raw materials prices، the shortage of some of them، and the difficulty of importing are all factors that make the cost of implementing projects high and in a continuous rise، which makes it difficult for the contractor to develop a proper study for any project cost.
He said that these factors made the contracting sector face instability، not only in the period of preparing studies، but also in the implementation period، as it collides with several factors، including the recognition of the client، the owner of the project، of those continuous price differences in raw materials and there are parties that are committed to paying the differences، and others that are late in paying، which contributes to the occurrence of continuous liquidity crises among contractors.

Reinstating the 8% interest rates

He revealed that it is important to reinstate the Central Bank's 8% interest initiative،  from which the construction sector has benefited in recent years، or to approve  an alternative initiative to support the sector.
He indicated that the cancellation of this initiative contributed to the disruption of many projects and also affected the real estate investment sector، as the period in which the initiative was implemented witnessed the conclusion of successful partnerships among contractors and developers، which contributed to the acceleration of the implementation of projects and the offering of continuous works that helped to employ  thousands of workers.
He stressed the sector's urgent need for the issuance of the executive regulations of the compensation law and obliging the outsourcing  entities to implement them after approving and issuing the recent amendments، in order to solve some of the problems facing the contracting sector at the current time.

New compensation law

The applying  of the new compensation law will accelerate the speed of current projects implementation،  give stability to the sector and restore the financial balance of contracts، since  the  state is very keen to accelerate the rates of project implementation and to support the construction sector، as it  appears in recent decisions، he added.
Eng. Alaa Abdel Aziz owns a major work history in the construction and building sector، where he worked for many major contracting companies، including  the Arab Contractors، Dorra، City Stars، Construction and Design "CONSTEC".