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Thursday, 23 September 2021

Egypt: Construction on hold

A ministerial decision temporarily to suspend construction permits has impacted the construction sector, already suffering as a result of the coronavirus pandemic

Ahmed Kotb , Wednesday 3 Jun 2020
Construction on hold
Construction on hold

Minister of Local Development Mahmoud Shaarawi instructed Egypt’s governors last week to suspend the issuance of new construction permits and to halt existing building activities for a period of six months in a bid to limit building violations and illegal construction across the country.

The decision applies to Greater Cairo, Alexandria, and other major cities and stipulates a halt to current construction work until reviews have taken place regarding their adherence to legal requirements.

Shaarawi said that industrial, touristic, and government facilities, as well as national projects, were exempt from the decision, adding that the issuance of building permits in smaller towns and villages would not be affected.

The heads of local municipalities and the engineering departments affiliated to them have been asked to review previously issued building licences and ensure that those responsible follow legal regulations, including building garages to accommodate cars in every building.

Shaarawi said the state would deal firmly with any building violations, warning that offenders could be tried before a military court. The violations could include building without a licence, building higher than stipulated in a licence, building on land not allocated for construction, breaching plans filed for a building, or not building sufficient garage space.

Construction violations in Egypt significantly increased following the 25 January Revolution in 2011, and Alexandria witnessed a large number of them.

According to Governor of Alexandria Mohamed Al-Sherif, the coastal city could be considered to be “the capital of violations”. He said in a telephone interview on television last week that there had been 133,000 decisions to demolish buildings built without proper regard for regulations in Alexandria alone, though only 9,000 of these had been implemented.

“Procedures will be tightened from now on, and violators will stand trial before the military prosecution,” Al-Sherif said.

Mustafa Mahmoud, a bank employee in Alexandria, said that some contractors in the city had started construction and had only obtained licences after they had finished a building. This was because they could apply for a relaxation of violations in a city where construction is supposed to be limited to six floors only, he added.

“I hope that this is a real beginning to address the phenomenon of the illegal construction that had harmed the appearance of the city,” Mahmoud said.

The coronavirus pandemic has already slowed down the economy, and many sectors have been affected in Egypt including real estate. The ministerial decision has raised questions about its further effects on the sector.

Ahmed Al-Wakil, head of the Alexandria Chamber of Commerce, said the decision to suspend building permits for a period of six months was needed, but that those working legally and abiding by the regulations should not be punished.

“We are living in harsh conditions, especially with businesses stalling because of the coronavirus crisis, and many companies are likely to be affected if the situation continues, with many workers possibly losing their jobs,” Al-Wakil said.

Mechanisms should be put in place to protect companies and developers working regularly and legally, he stressed, adding that the Alexandria Chamber would coordinate with the office of the prime minister and the governor of Alexandria to discuss the effects of the problem on the sector and proposals to remedy it.

Ahmed Al-Zeini, head of the Building Materials Division at the Cairo Chamber of Commerce, said the decision was important in order to limit violations in construction and that it would not heavily affect the sector negatively “as some might think”.

Even those who have legal permits and abide by the regulations cannot work normally at the moment because of weak demand in the real-estate market caused by the effects of the coronavirus pandemic, he added.

“Demand for steel and cement has dropped enormously over the last couple of months, and sales of building materials have fallen by more than 60 per cent,” Al-Zeini said.

However, he said that construction in the new cities and the New Administrative Capital was going well, since they were national projects exempt from the ministerial decision. National projects represent 40 per cent of the demand for building materials in Egypt, while private projects make up about 60 per cent, he noted.

Al-Zeini also said that there had been significant impacts on construction during the present coronavirus pandemic, especially luxury housing and tourism projects, and that demand for these had decreased significantly as buyers had opted to hold onto their cash instead.

*A version of this article appears in print in the 4 June, 2020 edition of Al-Ahram Weekly


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