{"id":582821,"date":"2023-02-27T00:00:00","date_gmt":"2023-02-27T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/blackboards\/its-going-to-be-some-time-before-we-see-new-private-schools-on-the-map\/"},"modified":"2023-02-27T00:00:00","modified_gmt":"2023-02-27T00:00:00","slug":"its-going-to-be-some-time-before-we-see-new-private-schools-on-the-map","status":"publish","type":"blackboard","link":"https:\/\/enterpriseam.com\/egypt\/blackboards\/its-going-to-be-some-time-before-we-see-new-private-schools-on-the-map\/","title":{"rendered":"It's going to be some time before we see new private schools on the map"},"content":{"rendered":"

<\/span>Private schools + universities revisit construction plans amid hefty price tags:<\/span> The <\/span>education sector has by no means been spared from the tailspin the construction industry has been sent into as a result of the soaring cost and shortage of building materials in recent months. Many education outfits in Egypt are faced with the same challenges real estate developers have been up against for the past year but under even tighter budgetary constraints. With few options at their disposal school operators have almost entirely brought new projects to a standstill, potentially restricting the availability of quality education for new students over the coming years, according to insiders in the sector we spoke with. <\/span><\/p>\n

REFRESHER-<\/span> Since <\/span>last year<\/a><\/span>, higher energy, raw materials, freight and shipping costs have<\/span> been pushing building material prices higher and causing real estate and infrastructure developers to <\/span>suspend or drastically reevaluate<\/a><\/span> their projects. Smaller contractors \u2014 which would include those hired to build new private schools \u2014 have been among those most vulnerable to the rising cost of building materials in their projects, which are <\/span>showing no sign of slowing down this year.<\/a><\/span><\/p>\n

For projects already in progress, some schools are cutting back on amenities: <\/span>Some<\/span> Schools are reconsidering materials and certain non-essential specifications to their ongoing projects to help cut back on costs.<\/span>\u201cWe\u2019ve made alterations to our designs to save more. Things like basements that were included in our initial plans might be removed to save on construction costs,\u201d Mostafa tells us. <\/span><\/p>\n

Others are opting to instead expedite their construction schedules to get ahead of future<\/span> cost increases that are now inevitable:<\/span> \u201cWe fast tracked the projects we\u2019re working on, like a university in Assiut, for example, to help us save on rising costs,\u201d CIRA CEO Mohamed El Kalla tells us. <\/span><\/p>\n

But almost all new construction for schools is on standby: <\/span>Price increases for steel (which<\/span> currently sells <\/span>for as much as EGP 28.5k per ton<\/a><\/span>) and cement (which is being sold for as much as EGP 1.9k per ton) have weighed heavily on most schools\u2019 construction plans. \u201cWe\u2019re reassessing plans and reevaluating how feasible these projects are under the new climate,\u201d Eduhive CEO Karim Mostafa tells us. For CIRA, new projects are also being restructured and revisited. \u201cEvery single project we have not yet started working on is back to the drawing board,\u201d El Kalla tells us. <\/span><\/p>\n

Halted construction could lead to a tighter supply of quality education: <\/span>Since the cost of<\/span> CAPEX has gone up by 30%, the only way for schools to move forward is by passing that cost on to consumers, El Kalla tells us. But the problem with doing so is that these higher fees exclude a large portion of the market looking for high-quality, affordable education. \u201cThe provision of quality education at decent campuses for middle-class students is going to be very scarce for the coming three years,\u201d El Kalla tells us. <\/span><\/p>\n

For existing schools, new construction prospects are stymied by tuition caps: <\/span>For<\/span> schools looking to expand their current campuses or build new facilities, construction costs are difficult to fully pass on in the form of higher student tuition due to regulations that prevent schools from raising tuition more than 7% annually. <\/span><\/p>\n

But raising tuition fees by that much would have its own set of downsides: <\/span>\u201cEven if we<\/span> were permitted to raise tuition by 40%, parents wouldn't be able to take that hit,\u201d Mostafa tells us. <\/span><\/p>\n

There\u2019s still a lot of uncertainty looming when it comes to construction plans: <\/span>\u201cThe picture<\/span> is still foggy and it's hard to budget accurately, so under this climate I can't make decisions about new ventures. I have to let the dust settle in order for us to proceed with new things. We\u2019re focused on what we have to ensure we can still provide quality service at a reasonable price,\u201d Mostafa tells us.<\/span><\/p>\n

Schools are still reeling from back to back crises: <\/span>\u201cIn the past 10 years schools have been<\/span> under a lot of strain. Schools have had to make it through the first devaluation in 2016, followed by covid-19 when they had to heavily invest in e-learning infrastructure and now we\u2019re going through another cycle of devaluation \u2014 so schools are already depleted,\u201d El Kalla says.<\/span><\/p>\n

For now, most schools are focused on addressing internal challenges with their existing<\/span> facilities: <\/span>Even stationary and basic school infrastructure like tables, chairs, paper, and pens are seeing prices dramatically rise for schools and in many cases face difficulty sourcing these materials. \u201cWe\u2019re trying to minimize risk and cost. Anything we need to purchase from abroad we\u2019re putting off this year. We\u2019re using what we already have in our possession,\u201d El Alsson Executive Director Karim Rogers tells us. \u201cTextbooks, teacher books, stationary \u2014 anything that might come from an overseas shipment isn\u2019t here and no one knows if they will be available next year,\u201d a teacher at a private school who requested to remain anonymous told Enterprise.<\/span><\/p>\n

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