The Contractors Union presents 3 urgent demands to the government to save the contracting sector

 

The Contractors Union presents 3 urgent demands to the government to save the contracting sector

Paying dues and activating the compensation law and price differences are the most prominent demands

The construction and building sector is witnessing many challenges due to lack of liquidity, high prices of building materials, non-disbursement of dues, and non-activation of the compensation law, which made the Contractors Union submit a new memorandum to the Council of Ministers to present 3 urgent demands, according to specific and fair timetables.

The importance of the compensation approved by the contracting companies is to reduce the severity of the damage, in order for the sector’s companies to continue their work, and thus save some companies from stumbling and exiting the sector, as the federation includes no less than 30,000 contracting companies.

The Contractors Union appeals to the Council of Ministers to pay part of the dues to contractors, as 80% of the contracting companies in the federation are small and medium companies and they work as subcontractors for large contractors, and the banking sector refuses to deal with small and medium companies.

Eng. Mohamed Sami saad

The decisions of the responsible authorities that are issued in favor of the contracting sector are excellent decisions and work to solve many obstacles facing the contractor, but the implementation of these decisions faces a big problem represented by the emergence of several interpretations of them that empty them of their content and purpose, stressing the importance of establishing a mechanism to follow up the implementation and application of these Decisions, and work to quickly disburse late dues according to fair and clear timetables to help a large number of contracting companies that have suffered for many years from not receiving their dues from various outsourcing agencies, said Engineer Mohamed Sami Saad, President of the Egyptian Federation of Construction and Building Contractors.

During an expanded press conference held by the Federation, in the presence of Hisham Yousry, Secretary General of the Federation, Engineer Mamdouh Al-Morshedy, member of the Board of Directors of the Federation, Representative Imad Saad Hamouda, Chairman of the Housing Committee in the House of Representatives, and a number of members of the Union, Engineer Sami Saad reviewed the most important challenges and obstacles facing construction companies at the current stage, stressing However, the federation has recently succeeded in issuing a compensation law to pay companies' dues.

He added that the compensation law saved contractors from the specter of bankruptcy or an increase in their debts to banks, especially since the companies carried out their work at much higher prices than they had previously submitted to the outsourcing authorities. Borrow it to finish his business and projects.

The head of the federation explained that the compensation law needs a triangle to implement it and achieve its goal, as projects less than six months do not get price differences or any compensation, in addition to that high prices expose companies to delay in implementation, and therefore when addressing the outsourcing authorities, he cannot obtain his dues as a result of the delay, even though the delay is beyond his control.

He added that the disbursement of compensation requires the existence of what is called the "indices" tables for the prices of building materials, which measure the amount of the increase that the contractor will be compensated with, which is set through the Central Agency for Public Mobilization and Statistics, but the federation found that these tables are not sufficiently updated for that. The federation began to demand that these schedules be updated during the current period.

The head of the Federation confirmed that the Ministry of Housing had recently agreed to replace the payment system with the accrual system in the event that the financial liquidity was not available at the awarding party, and that the Ministry’s approval means that the contractor obtains a document or extract from the awarding party that is not subject to exchange, but which benefits his dues so that he can contractor from submitting it to the banking authorities to guarantee his rights.

In his speech, the President of the Federation touched on the problem of the electronic bill and said: The construction sector needs a transitional period to absorb the details related to the electronic bill, especially since the sector does not operate from offices and operates from distant locations where modern means and technologies may not be available, in addition to the difficulty of registering subcontractors. The electronic invoice, the difficulty of proving all items of costs electronically, as well as the discrepancy in the dates between raising the extract on the invoice platform and the monthly VAT declaration.

He stressed that the opinion of the contracting sector was not taken into account the electronic invoice during the preparation of the system for the ministry, and therefore the contractors objected to it because it would cause great losses to the contractor.

Accordingly, the contractors submitted to the federation some demands, which in turn submitted them to the Ministry of Housing for decision-making.

With regard to the unjustified increase in iron prices, the President of the Union confirmed that iron prices witnessed successive increases during the past four months, as the price of a ton exceeded 45 thousand pounds, which is unprecedented, which greatly affected the contracting sector as a whole.

Hisham yousry

In the same context, Hisham Yousry, Secretary General of the Egyptian Federation of Construction and Building Contractors, said that the federation is striving to preserve the rights of contracting companies and solve all obstacles that prevent these companies from continuing to operate, explaining that the federation is communicating with all parties, whether the Consumer Protection Agency, the Tax Authority, and the Supreme Compensation Committee. The Ministry of Housing and decisions to protect the sector from collapse due to the conditions in which the economy as a whole, which had the greatest impact on the contracting sector.

He explained during the conference that he learned from the Federation of Manufacturers that Ezz Steel produces about 65% of the volume of iron production in Egypt, as it imports billet ore from abroad and rolls it for it, and when the dollar problem occurred, the imported quantity decreased, and he had to work with only 40% of his capacity. In addition to exporting 50% of its iron production abroad to save dollars.

He said that the state does not provide any support for the production of iron, and the factories here, like real estate developers, have no control over prices, and each company sells at a special and different price.

Here, there is no room for complaints to the Consumer Protection Agency, because the government did not set a specific price for iron until the producers' excesses are monitored.

Eng. Momdouh Al morshedy

For his part, Eng. Mamdouh Al morshedy, a member of the Board of Directors of the Egyptian Federation of Construction and Building Contractors, confirmed that the problems of the contracting companies can be summed up in several points, which are the non-payment of contractors’ dues and final receipts, the non-application of the law of compensation and price differences, as well as the delay in the final delivery of works, which results in non-payment of Returning letters of guarantee and this is followed by many problems for companies with banks working with companies.

Mamdouh Al-Murshedy demanded the speedy payment of the price differences and the 5% guarantee for the works that are deducted from the extracts and due to the contracting companies so that they can complete the projects they are implementing, in addition to returning the final letters of guarantee in the shortest possible time so that the companies can solve their problems with banks, stressing Activating these points will contribute to reviving the sector again during the coming period.

Al-Murshedy emphasized the importance of the government and the banking system's support for contracting companies to carry out their tasks and complete their projects, especially since contracting companies are partners of the state in achieving its various development plans.