meed-logo

line1 line2 line3
SIGN IN / REGISTER

Egypt’s construction sector faces delays

22 February 2023

This package on Egypt’s construction and transport sectors also includes:

> Egypt’s El-Attal launches $229m development

> Qatari Diar selects New Cairo project contractor

> Japan inks a new Cairo metro loan

> NMDC to execute $272m Egypt dredging works

> Bidders prepare Egypt dry port proposals

> Egypt qualifies firms for schools PPP

 

After seven years of continuous growth, Egypt’s construction sector is showing signs of wobbling amid the country’s economic troubles.

The value of construction and transport contract awards in Egypt has grown every year since 2015 and rose to record highs in the past two years, according to regional projects tracker MEED Projects. It grew by 44 per cent to $19.3bn in 2021 – from $13.4bn in 2020 – before rising again by 31 per cent to $25.4bn in 2022.

In January, however, the value of construction and transport contract awards fell to less than $200m. This was the lowest monthly total since July 2016, and well below the $2.6bn of contract awards in January 2022.

Although the general outlook for the construction sector is strong, economic volatility presents downside risks, at least in the short term.

“Things are at a standstill for the moment,” says Salwa Elbakry, business development director for Egis in Egypt. 

“Several tenders were set to be issued in early January and February, but due to the current economic situation, including devaluation, there were some delays.”

This slowdown started in June, when the currency crises deepened. Companies remain optimistic, however, as “Egypt has proven to be a versatile economy”, says Elbakry.  “There are a lot of positive outlooks for 2023. By the end of the first quarter or the beginning of the second quarter, things will get better.”

As Egypt’s major projects are backed by sovereign funds, international investors and institutions, it is “business as usual”, she adds.

Cairo’s positioning as a destination for international investment has grown in recent years. In 2021, Egypt’s International Cooperation Ministry secured $10.2bn in development financing, of which $8.7bn was dedicated to public sector projects and $1.5bn to private sector development.

GCC investors continue to believe in the Egyptian market as well. “The ties between the GCC and Egypt go way back,” says Elbakry.

Focus on key projects

While the IMF suggested in January that Egypt should curb its project spending, the government has said its major projects are vital for the country’s development and a vehicle for GDP growth.

Recently, Egyptian president Abdul Fattah al-Sisi pledged that national projects would continue. Ongoing infrastructure schemes include a high-speed railway network; roads and bridges; hospitals; and several new cities, including the $20bn new capital, to the east of Cairo.

“Egypt continues to be driving ahead with a lot of big projects,” says Raouf Ghali, CEO of Hill International. “It is the first time I have seen Egypt working on projects and programmes that rival the GCC, and this is very unusual.”

Other sectors that are expected to initiate new developments are tourism, healthcare and education, as well as logistics.

“This year will witness several public-private partnership schemes related to tourism, ports and industrial zones,” says Elbakry. “There is also a lot of buzz around the hospitality sector.”

Rail versus real estate

Railway projects make up $10.5bn, or 90 per cent, of the $11.7bn-worth of construction and transport projects in the bidding phase in Egypt.

The two largest upcoming projects are for work on the Cairo Metro: a $5bn Line 6 package and an $800m package for phase one of Line 4. Both schemes are in the bid evaluation phase.

Schemes on the Alexandria Metro are the next biggest pending awards. The National Authority for Tunnels is receiving bids for two $750m packages for the line between Abu Qir and Misr Station.

With the ongoing currency and inflation crisis, Egypt is trying to use more local resources and further reduce its imports of construction materials. The demand for foreign expertise remains strong in sectors such as rail, however.

“While the Egyptian market is rich in engineering and architectural skills, some projects like aviation, rail, ports, smart cities or water require international know-how,” says Elbakry.

The World Bank Group approved a further $400m in financing in 2022 to support railway network development in Alexandria and Cairo.

Real estate has been another booming sector in recent years, driven largely by domestic demand. Yet the outlook might be shifting now, with projects in the sector appearing to be scaling down and foreign funding showing signs of drying up.

“Egyptians rely on real estate as an investment,” says Elbakry, adding that the market is currently at a standstill because “the only people able to invest in real estate at the moment are high-income individuals”.

For the moment, “everybody is watching what the Central Bank is going to do with the currency and the exchange rate”, says Ghali.

“For construction companies, it is great to get these big contracts, but devaluations after signing contracts do not help profitability. 

“It also creates a lot of insecurity because you have a lot of cash in the country that you cannot export, which makes it a very challenging environment,” he adds. 

“Overall, we are bullish, but also very cautious because of the currency situation.”

MEED's March 2023 special report on Egypt also includes:

> GOVERNMENT & ECONOMY: Egypt faces up to economic reality

> POWER: Crisis dampens Egypt’s energy diversification

> WATER: Egypt turns to private sector for water

> BANKING: Interesting times for Egypt’s lenders

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10585786/main.gif
Eva Levesque

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Egyptian contractor wins Abu Dhabi Ramhan Island deal

    4 September 2026

    Egypt-headquartered contractor Rowad Modern Engineering has been awarded the main works contract for the Marina Apartments project on Ramhan Island, Abu Dhabi.

    The contract was awarded by the local firm Eagle Hills, which is led by Mohamed Alabbar, the founder and chairman of Emaar Properties.

    Rowad’s scope includes structural and architectural works, finishing, and mechanical, electrical and plumbing systems.

    The company will also deliver infrastructure works, including utility connections to external networks, testing and commissioning.

    The development comprises two residential towers offering 187 residential units.

    The works will be carried out under the consultancy supervision of local engineering firm Mirage Leisure & Development.

    The latest contract award follows Eagle Hills awarding the local firm Arabian Construction Company (ACC) an estimated AED2.5bn ($680m) construction contract to build about 500 villas at the Ramhan Island development, as reported by MEED previously.

    Located off the coast of Abu Dhabi, the Ramhan Island development spans an area of over 4 million square metres.

    The overall development includes the construction of 1,800 villas, 900 residences, a hotel and retail facilities.

    Mohamed Alabbar launched the Ramhan Island development in May 2024.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19355437/main.jpg
    Yasir Iqbal
  • Dubai sets deadline for Jebel Ali waste-to-energy PPP

    4 September 2026

     

    Register for MEED’s 14-day trial access 

    Dubai Municipality has set a 27 September deadline for developers to submit expressions of interest (EOIs) for its planned Jebel Ali waste-to-energy (WTE) public-private partnership (PPP), according to a source.

    The greenfield facility is planned to treat up to 6,000 tonnes of municipal solid waste a day.

    The municipality is seeking international and local developers to develop, finance and operate the facility. It is planning to prequalify developers later this year before issuing a request for proposals (RFP) in the first quarter of next year, a source said.

    The Jebel Ali facility is intended to support Dubai’s waste-management strategy and its target of reducing reliance on landfill.

    Dubai Municipality is being advised by a team led by Abu Dhabi’s Tribe Infrastructure Group, with UK-headquartered Ashurst and Germany’s Fichtner also involved.

    It was confirmed to MEED that the project is separate from the planned second phase of the Warsan WTE facility, for which Dubai Municipality issued a consultancy tender in February.

    That facility will be located in Warsan 2, next to the Al-Aweer sewage treatment plant. The expansion is expected to increase waste-conversion capacity at the existing Warsan site with an estimated budget of $500m. The consultancy contract has a duration of six years.

    The original Warsan WTE plant, Dubai’s first major WTE public-private partnership (PPP) project, reached full commercial operations in 2024.

    Located in the Warsan area, the AED4bn ($1.1bn) facility treats 1.9 million tonnes of municipal solid waste annually, generating up to 220MW of thermal energy that is fed into the local grid.

    In February 2023, state utility Dubai Electricity & Water Authority (Dewa) and Dubai Waste Management Company signed the power-purchase agreement (PPA) for the project.

    Dubai Waste Management Company, the special-purpose vehicle implementing the scheme, reached financial close in June 2021 for the project.

    The Warsan project was developed under a 35-year PPP concession by a consortium comprising Dubai Holding, Dubai Aluminium, Tech Group and Itochu Corporation. 

    The main contractor was a joint venture of Belgium’s Besix Group and Hitachi Zosen Inova of Switzerland.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19354502/main.jpg
    Mark Dowdall
  • Egypt to invest $4.5bn in refinery upgrades

    4 September 2026

    Egypt is planning to invest $4.5bn in refinery upgrades, according to the country’s Minister of Petroleum and Mineral Resources, Karim Badawi.

    Egyptian refineries are operating at 80% of capacity compared with 66% two years ago, according to Badawi, who wants further increases in utilisation of existing facilities.

    “We aim to invest around $4.5bn to develop existing refineries and build new units to reduce imports and achieve self-sufficiency in refined products,” he said in a statement.

    In May, Egypt said that it had increased its fuel import budget by almost 40% for the 2026-27 fiscal year amid higher global prices driven by the Iran war, which started when the US and Israel launched an attack on Iran on 28 February.

    Brent crude prices are up about a third since the conflict started, trading at more than $90 a barrel for most of this month so far.

    Badawi said a decline in Egypt’s oil and gas production between 2021 and 2024 occurred because foreign companies were reluctant to invest in the country’s energy sector due to unpaid government debts.

    He said: “We have settled all the debt, which reached $6.1bn in June 2024. As a result, hydrocarbon exploration and production activity grew by nearly 20% this year.

    “We are now moving in the right direction to increase oil and gas output gradually.”

    Despite the ongoing push to develop projects in the country’s oil and gas sector, several key projects have seen significant delays in recent years.

    These include a $2bn hydrocracking complex package that forms part of the wider Assiut oil refinery upgrade project.

    Earlier this month, MEED revealed that mechanical completion of the hydrocracking package is now unlikely to be reached until early next year due to complications in the final stages of construction.

    The hydrocracking complex package has experienced extensive delays over several years.

    In April this year, Badawi called for work to accelerate on the Assiut oil refinery upgrade project, saying it is important for reducing the country’s spending on imported refined products.

    At the time, the oil ministry said the project was 88% complete, with trial operations planned by the end of the year.

    Assiut Oil Refining Company (ASORC), a subsidiary of state-owned Egyptian General Petroleum Corporation, is the project operator.

    France’s Technip Energies is the main contractor, performing engineering, procurement and construction work on the Assiut hydrocracking complex under a $2bn contract awarded by ASORC in February 2020.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19353521/main.jpg
    Wil Crisp
  • North Field West platform bidders get extra time

    4 September 2026

     

    QatarEnergy has granted contractors additional time to prepare bids for a key tender for the engineering, procurement, construction and installation (EPCI) of large platforms for the giant North Field gas field in Qatari waters.

    The tender, issued earlier this year, forms part of the wider North Field West (NFW) project, the third and last phase of the state enterprise’s North Field liquefied natural gas (LNG) expansion programme.

    The core scope comprises the EPCI of four production deck modules (PDMs) and associated structures. The new PDMs will increase gas production from North Field reservoirs and provide additional gas feedstock for the NFW LNG development.

    QatarEnergy has set 15 September as the deadline for technical bid submissions, while commercial bids are due on 10 November, according to sources.

    The previous deadlines for submission of technical and commercial bids were 30 August and 25 October, respectively, MEED previously reported.

    The following contractors, among others, are understood to be bidding:

    • China Offshore Oil Engineering Company (China)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • Saipem (Italy)

    Before issuing the PDM tender, QatarEnergy awarded McDermott a contract for the EPCI of four offshore jackets that will also support gas feedstock supply for the NFW LNG project. The contract is estimated to be worth about $200m, MEED reported in January.

    North Field LNG expansion

    QatarEnergy is advancing the three phases of its estimated $40bn North Field LNG expansion project. EPC works on all three giant projects are progressing.

    QatarEnergy is understood to have committed nearly $30bn to the first two phases – North Field East (NFE) and North Field South (NFS) – which will lift Qatar’s LNG production capacity from 77.5 million tonnes a year (t/y) to 126 million t/y by 2028.

    QatarEnergy awarded the main EPC contracts for NFE in 2021. The project was intended to raise LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the EPCI of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda and France’s Technip Energies.

    In May 2023, QatarEnergy awarded the $10bn main EPC contract for NFS to a consortium of Technip Energies and Consolidated Contractors Company (CCC). The contract includes two LNG trains, each with a capacity of 7.8 million t/y.

    Once fully operational, the first two phases are expected to add 48 million t/y of LNG supply to the global market.

    QatarEnergy took the final investment decision on NFW this year, awarding an EPC contract estimated at $8bn to a joint venture comprising Technip Energies, CCC and Gulf Asia Contracting (GAC) in February.

    Chiyoda carried out the front-end engineering and design (feed) work for the NFW LNG project.

    The NFW scope covers the EPC of two LNG trains with a combined capacity of 16 million t/y, as well as associated facilities for gas treatment, natural gas liquids recovery and helium extraction.

    In addition to LNG, NFW is expected to produce about 175,000 barrels of oil equivalent a day of condensate, ethane and LPG.

    With all three phases now under EPC execution – and NFE scheduled for commissioning later this year – QatarEnergy is positioning itself to remain one of the world’s largest LNG suppliers over the long term.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19352006/main.jpg
    Indrajit Sen
  • Contractors prepare Dubai Metro Gold Line prequalifications

    4 September 2026

     

    Register for MEED’s 14-day trial access 

    Contractors are preparing to submit their prequalification statements on 7 September for a contract to build the new Gold Line as part of the Dubai Metro network’s expansion.

    Dubai’s Roads & Transport Authority (RTA) issued the request for qualification notice for the project in June, with an initial submission deadline of 17 August, as MEED exclusively reported.

    This followed the RTA’s invitation to contractors to express interest in building the new Gold Line in May.

    Dubai officially announced the launch of the new Gold Line in April.

    In a post on social media site X, Sheikh Mohammed Bin Rashid Al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, said the project will cost about AED34bn ($9.2bn).

    The Gold Line will increase the Dubai Metro network’s total length by 35%.

    The project is scheduled for completion in September 2032.

    The Gold Line will be a fully underground network covering more than 42 kilometres, with 18 stations.

    It will pass through 15 areas in Dubai, benefiting 1.5 million residents.

    The project is expected to provide connectivity to over 55 under-construction real estate development projects.

    The Gold Line will start at Al-Ghubaiba in Bur Dubai and end at Jumeirah Golf Estates.

    It will connect to Dubai Metro’s existing Red and Green lines and integrate with the Etihad Rail passenger line.

    The contractor will be responsible for the design and build of all civil works, electromechanical equipment, rolling stock and rail systems.

    The selected contractor will also be required to assist in the systems maintenance and operations during an initial three-year period.

    In October last year, MEED exclusively reported that the RTA had selected US-based engineering firm Aecom to provide consultancy services for the Dubai Metro Gold Line project.

    Stage one covers concept design, stage two covers preliminary design, stage three covers the preparation of tender documents, stage four encompasses construction supervision, and stage five covers the defects and liability period.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19350865/main.png
    Yasir Iqbal