{"id":649432,"date":"2024-10-09T00:00:00","date_gmt":"2024-10-09T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/the-construction-sector-is-about-to-get-a-big-boost-from-new-building-regulations\/"},"modified":"2024-10-09T00:00:00","modified_gmt":"2024-10-09T00:00:00","slug":"the-construction-sector-is-about-to-get-a-big-boost-from-new-building-regulations","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/the-construction-sector-is-about-to-get-a-big-boost-from-new-building-regulations\/","title":{"rendered":"The construction sector is about to get a big boost from new building regulations"},"content":{"rendered":"

The return of the 2008 Building Law is th<\/strong>e s<\/strong>hot in the <\/strong>arm that the construction sector <\/strong>needs:<\/strong> The government recently scrapped<\/a> the construction licensing requirements put forward in 2021 and reinstated the full provisions of the 2008 Building Law and its executive regulations, leaving behind a set of regulations that saw a significant decline in the issuance of building permits, slowed construction activity in Egypt\u2019s governorates, and limited the role of small investors in the construction sector. Enterprise sat down with a few industry insiders to see how the government\u2019s new approach will impact the sector.<\/p>\n

The why: <\/strong>The move aims to push more citizens to obtain building permits by making the process easier, making it an 8-step process instead of a 15-step process previously, according to a statement<\/a> from the Local Development Ministry. It also aims to support and energize a construction sector hobbled over the last few years by the Covid-19 pandemic, macroeconomic headwinds, and the government\u2019s recent decision to cut public spending<\/a> and push back new projects.<\/p>\n

A faster process:<\/strong> The reinstatement of the law will allow citizens to receive their building permit in a swift 44-day period, which could go down to 26 days if there is no need for an ins. certificate, Local Development Ministry spokesperson Khaled Qasem told Enterprise previously. Citizens will also now be able to access responsive tech support and local administration units to guide them through the process of obtaining their permit, he added.<\/p>\n

ICYMI: <\/strong>Earlier this year we published a deep dive into the government\u2019s plans to revive the<\/a>construction sector<\/a> \u2014 which primarily revolves around eased permitting, support for contractors, and simplified financing.<\/p>\n

The decision will aid the process of building a safe home for mns of people \u2014 <\/strong>and in the process revive the real estate sector, boost construction activity, and support the Egyptian economy by creating jobs, House Housing Committee head Mohamed Attia El Fayoumi told Enterprise. The move will also legalize informal buildings and unregulated construction through allowing appropriate building heights and simplifying procedures, El Fayoumi added.<\/p>\n

A paradigm shift for construction contractors:<\/strong> The decision will lead to a full transformation of contracting, particularly for small construction firms who left the industry after March 2021\u2019s planning and building requirements made working in the sector no longer tenable, Egyptian Federation for Construction and Building Contractors (EFCBC) member Mohamed Abdel Raouf tells us. The decision will also provide a boost for contractors whose participation in subcontracted government projects was affected following the 2021 measures, stimulate the market independently of the state's budget, and absorb informal workers in the sector, he continued.<\/p>\n

The steel and cement sectors are among the biggest winners: <\/strong>The large number of pending requests for building permits will drive demand for key construction inputs, especially steel and cement, Abdel Raouf added. This sentiment was echoed by the head of the Cairo Chamber of Commerce\u2019s building materials division Ahmed El Zeiny, who told us that the decision will end the market\u2019s current stagnation, particularly as the regulations on building heights are loosened and building permits are issued more easily. Cement factories will operate at full capacity, El Zeiny added, saying that while the reduction in government investments has led to reduced production, the revival of individual construction will aid in raising demand.<\/p>\n

Remember: <\/strong>Last week, the Egyptian Competition Authority extended<\/a> our cement supply cut for a fourth year amid low demand and a glut in the market.<\/p>\n

The now-canceled regulations were highly unpopular among players in the sector: <\/strong>The 2008 law allowed for ground plus 11 floors, while the 2021 regulations limited buildings to just three floors, Abdel Raouf said. In addition, a committee made up of several government agencies imposed \u201cunfair conditions,\u201d especially given the high costs of land, he added.<\/p>\n

Low- and middle-income individuals also stand to benefit<\/strong>:<\/strong> Shams El Din Youssef, member of the EFCBC and chairman of Alshams for Contracting told Enterprise that the return to the provisions of the 2008 law will stimulate construction activity in Egypt\u2019s cities and support the private sector\u2019s ability to carry out construction in places like Heliopolis and Greater Cairo, as well as the rest of Egypt\u2019s governorates. This, in turn, will allow citizens to build their homes and contractors to build residential units at a price that is affordable for low- and middle-income individuals, rather than limiting construction activity to luxury homes in new cities.<\/p>\n

The decision is a message from the state that it's making way for the private secto<\/strong>r, HC Securities & Investment Real Estate Analyst Mariam El Saadany told Enterprise. The move follows the government taking a step back and scaling back the numbers of its projects in the sector after having dominated it for many years.<\/p>\n

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