Construction industry in Egypt to grow by 8% in 2016 says report

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Construction industry in Egypt to grow by 8% in 2016 says report

Construction industry in Egypt  has been projected to grow by eight per cent in 2016 after an estimated 9.8 per cent in 2015, the Egyptian Ministry of Finance has reported.

The report reveals that the growth due to the steady support of the sector by public private partnerships (PPPs) and the growing infrastructure project pipeline in the country reinforce our positive outlook for Egypt’s construction industry in 2016, said a report by Business Monitor.

Rising foreign investor interest in this market and a growing and increasingly diversified project pipeline bode well for infrastructure development in Egypt.

The strong government support for infrastructure development has gathered momentum with the announcement that Egypt will tender 12 PPPs in the next 15 months.

According to the Egyptian Ministry of Finance, the new PPP projects will be worth around $4 billion and will cover projects across all sectors.

The energy sector will see five projects besides the work to improve the transmission network. A power station near the port of Ataqa, in the south of the Suez Canal, is one of the projects to benefit from this investmentm, stated the report.

Besides this, six projects will be set aside for the transport sector, including an urban railway in Cairo and the expansion of the port of Alexandria. The Export-Import Bank of China will reportedly be providing the financing for these projects.

The industrial sector will boast four construction projects, including factories to produce leather, fibre glass, and tyres.

However, the report warned that the recent deterioration in the security situation will have a direct impact on investment in the tourism industry and as such commercial construction projects are at risk of being delayed and cancelled.

The plane crash in Egypt’s Sinai Peninsula in November 2015 too may have a negative impact on investor sentiment in the tourism sector and therefore the non-residential building segment, it stated.

According to the report, China will become an increasingly prominent player in the development of Egypt’s infrastructure sector over the next decade.

Attractive financing deals and significant expertise in the development of large-scale infrastructure projects – particularly in the transport sector – will allow China to gain market share, considerably altering Egypt’s competitive landscape, it stated.

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