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The spread of Covid-19 in Egypt and the government’s directives to contain the outbreak have impacted businesses across the construction industry.
Last week, President Sisi had postponed the inauguration of New Administrative Capital and Grand Egyptian Museum to 2021 due to concerns about the coronavirus outbreak.
In line with the recent directives of the government on social distancing, many contracting companies have reduced the number of employees, both at project sites and offices, instituted short daily working hours and in some cases, suspended work to protect their workforce.
Said Abdelwahab, Chairman of Amar Misr Construction, told Zawya Projects that the company is working at 20 percent capacity.
“Our staff are working from their homes, and we have reduced the number of engineers at project sites,” he said.
Abdelwahab pointed out that reduced working hours have impacted small real estate projects the most since these projects have tight completion deadlines.
He said his estimates show that nearly 80 percent of the companies involved in the construction of New Administrative Capital have suspended work.
He noted that if the Covid-19 outbreak prolongs, contractors may find themselves unable to pay staff and labour salaries.
He also disclosed that specific contracts his company was expecting to conclude with foreign entities had been suspended, adding that the suspension of ongoing tendering activity, for an indefinite period in some cases, would impact the annual order books of companies.
Building material demand falls
Ahmed Al-Zaini, Chairman of the Building Materials Division, Federation of Egyptian Chambers of Commerce (FEDCOC), said that the demand for building materials, especially steel rebar and cement, fell by about 80 percent towards the last week of March as contractors were forced to go slow or in some cases, cease all work.
He pointed out that before the Covid-19 crisis, the construction sector consumed, on average, half a million tonnes of steel rebars and four million tonnes of cement every month.
“The steel rebar and cement factories continue to operate, and we have enough reserves to last us the whole year,” he added.
Al-Zaini said employment in the building sector fell by 30 percent while transportation of building materials has been disrupted due to curfew and weak demand.
But he also underlined that adhering to government directives are important to safeguard the health of the workforce since working together is unavoidable at construction sites. Moreover, he noted, most of the construction labour come from different governorates of Egypt and live in shared accommodations.
Revival in property buying
Hussein AboulFotouh, the chief commercial officer of Memaar AlMorshedy, said that the developer has adhered to the containment steps announced by the government.
He said the company is operating at 25 percent capacity to maintain social distancing and has also reduced working hours at project sites.
AboulFotouh also disclosed that the company has put in place a healthy business plan to maintain financial solvency to cover salaries and project costs, adding that there is no intention to suspend any of future projects and programs.
The official said he was hopeful of a strong rebound in housing demand as many customers had to postpone their purchasing decisions due to the Covid-19 crisis.
Mohamed Al Bostany, Chairman of Al Bostany Real Estate Development, and President of the New Cairo Developers Association concurred and said he too expects the real estate sector to rebound once Covid-19 crisis ends and buyers return to the market.
He said all 75 association members had agreed to limit employee numbers in their offices and reduce working hours to support the government’s efforts to stop the spread of Covid-19 in the country.
Hossam Nassar, Chief Operating Officer of Redcon Construction, said some projects had been completely stopped at the request of clients, and those where construction activity has continued, the company is working at 50 percent capacity.
He didn’t disclose the names of the projects that were suspended but said there is a shortage of subcontractors in the market which would affect project delivery schedules.
Elia Saber, executive manager of Kharafi National, said construction activity and projects located in residential areas have been stopped to protect the health of residents but said a prolonged ban is likely to affect completion rates.
The Egyptian government had announced last week that it was postponing all planned events and openings of major national projects that were scheduled for 2020. The authorities had over the past weeks halted international flights, banned mass gatherings, and shuttered cinemas, mosques, churches and schools to check the spread of Covid-19.
(Reporting by Eman Hamed; Editing by Anoop Menon)
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