Construction companies face major challenges as a result of the lack of adequate insurance and the control of Bedouin tribes over sites of real estate projects in various cities of urban communities and remote desert areas.
Furthermore, the exposure of companies to threats and theft of equipment and the imposition of protection money contributed to the high cost of project implementation and construction contracts, according to Daker Abdellah, member of the board of directors of the Egyptian Federation for Construction and Building Contractors (EFCBC).
Abdellah said that construction companies working on those projects, whether assigned by the state or by private sector developers, calculate the additional cost of those protection money within the construction process at an average of 15% to 20% of the real cost, which constitutes new financial burdens for the state as well as private companies, in addition to the recent hikes in the price of raw materials, labour, transport, etc..
Abdellah noted that the percentage of protection money varies from region to region, increasing in deserts and remote cities.
He pointed out that the cost of carrying out projects in Sinai increases up to threefold compared to the costs in other cities and governorates as a result of the companies having to pay Bedouins the equivalent of half of the profit they obtain in return for leaving the companies’ equipment untouched.
He added that the same problem applies to projects that are implemented at the New Administrative Capital.