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Work like an Egyptian: Egypt's construction opportunities

Sophie Griffiths Building
Work like an Egyptian: Egypt's construction opportunities - Builder - Property - Egypt


Mummies, pyramids, chaos, gastroenteritis – dump this list of Egyptian clichés and focus instead on its construction boom. Sophie Griffiths went there to find out more …



 
Appearances can be deceptive. Take Dubai and Egypt, for example. Whereas the former, with its gleaming skyscrapers and pristine roads, became the postercity for growth and investment, many Westerners associate Egypt with noise, chaos, stagnation and gastroenteritis.
Yet, apart from the gastroenteritis, the reality couldn’t be any more different: Dubai’s construction sector has at least half its projects on hold, and Cairo is one big building site. “You can’t drive two minutes in New Cairo without seeing a building under construction,” says Mohamed Yehia, general manager for Lafarge Readymix.

Combine this with the forecasts for Egypt’s economic growth and its government’s big investment plans, and it seems that it’s time that UK firms started to take Egypt seriously.

Big spender

The numbers are persuasive Egyptian GDP growth is expected to be around 6% in 2009. This is a drop on the past three years, during which it has averaged 7%, but Hassan Badrawi, director of Orascom Construction Industries (OCI), one of Egypt’s largest contractors, believes it will climb steadily, reaching 6.9% by 2013. Egypt’s population is set to double in the next 25 years, and its present population of 76.5 million includes an expanding middle class. Meanwhile, Deutsche Bank predicts that the UAE economy will grow at just 0.5% – at best – in 2009. Its population is expected to shrink by a 17%.

Another plus point is the fact that Egypt’s banks have escaped the worst of the global credit crisis. David Skinner, regional managing director of Al-Futtaim Carillion for Egypt, says: “It’s not a heavily indebted nation. There are fewer large mortgages here and all types of credit are not as easy to get as in other parts of the world, so the country has suffered less.”

The Egyptian government has nonetheless injected the economy with a stimulus package of £1.84bn, 70% of which will fund building and infrastructure in 2009. In January it also pledged to spend about £346m on upgrading and expanding hospitals and £371m on building 1,316 schools.
 

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