The ban on construction permits jeopardizes contracts with clients, Badr El-Deen

While raising concerns over  Egypt’s six-month ban on construction permits, member of the Egyptian Businessmen Association and chairman of Real Estate Investment Division Eng. Mamdouh Badr El-Deen called on the Egyptian government to unveil  how to fulfill the contractual obligations binding developers with clients in regard to sold housing units in under-construction projects. 

“ Suspending construction works for six months jeopardizes the developers commitment towards clients and risks falling behind in the delivery schedule,” said he. 

The Egyptian government is quite keen to eradicate  construction violations  when it imposed a six-month ban on construction permits, according to head of Construction Committee at the Egyptian Businessmen Association Eng. Fatah Allah Fauzi.

On the other hand, Fauzi voiced concerns over damage that may be inflicted on straightforward  companies and workers should the ban be executed indiscriminately without determining how far existing construction projects are compliant with the law.

In a meeting attended by members of EBA’s Construction Committee via video conference, Fauzi added that a memo tackling EBA’s concerns has been drafted and is set to be sent to the Ministerial Cabinet. 

The Egyptian businessmen want effective permits to be exempted from the ban in parallel with taking action against violators. 

Also, maintenance and finishing works ought not to be hindered by the ban, EBA confirmed.

The six-month ban may squeeze Egypt’s  real estate sector constituting 18% of National Gross Product as well as potential investments into this vital sector which is already burdened by the coronavirus pandemic.

There are issues when it comes to carrying out the ban, with it shrouded in ambiguity in respect to implementation mechanisms and powers given to judicial police, he explained.

Additionally, restricting the ban to urban centers and cities contradicts with the Local Development Code. 

Moreover, suspending the issuance of construction permits clashes with  article 42 of construction code  authorizing seekers of construction permits to kick-start building should authorities fail to decide on or implement the permits in the span of 30 days.