Through recent mechanisms adapted by the Construction Companies’ Compensations Committee, the Egyptian government is to compensate real estate developers under government contracts for their losses, reported Daily News Egypt.
The parliament is to approve the law that drafts the mechanism by the end of the month, compensating companies by the beginning of 2017 partially through a percentage from the government contract that the committee will determine.
Each company contract will be compensated separately based on rules and conditions applied by the committee, omitting the possibility of paying a unified compensation, according to Daily News Egypt.
The committee’s conditions are specified based on the type of business, accomplishments, size of the business, contracts terms, and the date when the contract was signed, stated Al Borsa.
The newly formed committee includes several ministries, government agencies that deal with construction companies, the Egyptian Federation for Construction and Building Contractors that presents the private sector, and the National Company for Construction and Development that represents the public sector.
Each committee member is in charge of conducting research discussing the impact of the price increase of construction materials, Value Added Tax (VAT), and the pound’s flotation, in efforts to protect companies. The committee is to allow a six- month- period extension for project delivery given the current economic conditions that may trigger delays.