Egypt's Senate approves a new bill compensating contractors after pound depreciation

Gamal Essam El-Din , Tuesday 1 Nov 2022

The Senate – Egypt's consultative upper house - approved on Monday legislative amendments to a 2017 law that regulates government compensations paid out to contractors who suffer losses due to IMF-inspired liberalization policies, such as the EGP devaluation, and due to the phasing out of fuel subsidies.

Egypt s Senate
A file photo of Egypt s Senate in Cairo. Photo : Al-Ahram


Head of the Senate's Housing Committee Khaled Said said that "originally the bill limited compensations to the period between December 2016 and March 2017 during which a number of IMF-inspired economic reforms – such as pound devaluation, fuel price hikes and the VAT legislation – were adopted."

But, he added, the Senate decided to widen the scope of the effect of the bill "to include all periods of economic reforms causing financial losses to contractors involved in building projects and in delivering supplies and services to the government," arguing that the bill  guarantees that "contractors charged with carrying out essential national projects get their money and finish the projects on time."

"In Egypt, this crisis has led to a dramatic rise in prices of building raw materials and equipment and the bill comes to help address this negative development and stabilise the construction market," Said added.

A new Higher Committee for Compensations

Article one of the 2017 law states that a Higher Committee for Compensations will be created to look into complaints filed by contractors who suffered losses due to economic reform measures such as pound devaluation and raising fuel prices.

The committee, which will be affiliated with the Ministry of Housing, will be tasked with receiving requests for compensation, reviewing them and making sure that the losses incurred are a direct result of economic liberalisation policies.

Article two stipulates that requests filed by contractors are corroborated with documents showing how their businesses were negatively impacted by liberalisation policies and not by anything else.

The bill will then be sent to the House of Representatives to vote on and to pass before being ratified by President Abdel-Fattah El-Sisi and then enacted.

The Senate will take a two-week holiday on the occasion of the COP27 summit, after which it will reconvene on Sunday 13 November.

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