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
  • Firms prepare Hudayriat East PPP tunnels advisory bids

    25 June 2026

     

    Abu Dhabi’s Modon Infrastructure, formerly Gridora, has tendered a contract for technical advisory services for the construction of two underwater tunnels connecting the eastern side of Hudayriat Island with mainland Abu Dhabi.

    Consultants have until 26 June to submit their proposals.

    The project includes the construction of a 4.8-kilometre (km) highway, with four lanes in each direction, connecting Hudayriat Island to Mussafah 8th Street.

    The project will be delivered on a public-private partnership (PPP) basis in coordination with the Abu Dhabi Department of Municipalities and Transport and the Abu Dhabi Investment Office.

    The contract term is expected to be 25 years.

    The latest infrastructure development in Abu Dhabi follows Modon Infrastructure’s invitation in May for firms to register for the next phase of Abu Dhabi’s Mid Island Parkway Project (MIPP), which will also be developed on a PPP basis.

    Modon Infrastructure will act as the lead developer, holding the majority equity stake in the project company. It will award the engineering, procurement and construction contract, as well as the operations and maintenance services and advisory appointments.

    The second phase of the MIPP involves the construction of about 11km of highways, including a mix of three-, four- and five-lane sections. The highways will connect the Um-Yifeenah, Al-Jubail, Al-Sammaliyyah and Sas Al-Nakhl islands to Khalifa City and the E10 road.

    The scope also covers the construction of three interchanges: the E20, E10 and Dumbbell interchanges on Al-Sammaliyyah Island.

    The project includes several major structures, such as the E20 interchange, which will feature cast-in-place box-girder and void-slab bridges, and the E10 interchange with cast-in-place box-girder bridges. It also includes I-girder bridges between Raha Beach West and Sas Al-Nakhl Island, as well as a causeway at Sas Al-Nakhl Island.

    Further key elements include a cast-in-place balanced cantilever bridge between Sas Al-Nakhl Island and Al-Sammaliyyah Island; a tunnel between Al-Sammaliyyah Island and Bilrimaid Island; and a cut-and-cover (open) tunnel on Bilrimaid Island. The project will be completed with another tunnel connecting Bilrimaid Island to Um-Yifeenah Island.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17410214/main.jpg
    Yasir Iqbal
  • Algeria tenders upstream oil project contract

    25 June 2026

    Algeria’s state-owned national oil and gas company, Sonatrach, has tendered a contract for the development and rehabilitation of the central processing facility (CPF) at the Bir Berkine oil and gas field.

    The scope of the contract includes the study, supply, construction and commissioning of a project to rehabilitate the CPF facilities at the field, which is located in the Hassi Mesaoud region.

    Sonatrach says in the tender documents that the objective of the project is to ensure the continuity of production activities “under stable and secure operating conditions”.

    It also says the project aims to improve production yields and quality.

    The contract includes both initial and detailed studies as well as the supply of all equipment and materials.

    It also includes the execution of works, the assembly of all equipment and materials, and the commissioning of all relevant facilities.

    The tender has a two-stage submission process, with the first stage requiring technical bids to be submitted by 23 August.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17423013/main3916.jpg
    Wil Crisp
  • Red Sea Global tenders King Salman Bay construction work

    25 June 2026

     

    Saudi gigaproject developer Red Sea Global (RSG) has tendered a contract inviting firms to undertake marine infrastructure works at King Salman Bay on the Red Sea coast, north of Jeddah.

    The scope includes dredging and earthworks, as well as quay wall and edge protection works spanning about 11 kilometres.

    The bid submission deadline is 31 July.

    King Salman Bay is expected to be a waterfront development aimed at reshaping the city’s northern Red Sea frontage into a mixed-use destination, anchored by public-realm improvements and leisure-led development.

    The update follows RSG’s award of an estimated SR100m ($27m) contract to construct a solid waste management centre at its Red Sea Project. The scope includes four buildings: a material recycling facility, a transfer station, an administration building and a vehicle maintenance building.

    In October last year, MEED reported that RSG had secured a SR6.5bn ($1.7bn) credit facility to further develop Amaala, its luxury tourism destination on Saudi Arabia’s northwestern Red Sea coast.

    According to an official statement, “The funding is led by Riyad Bank as the sole underwriter, along with Saudi Investment Bank and Bank Al-Bilad as mandated lead arrangers.

    “The loan arrangement comprises a mix of conventional and Islamic financing and adheres to RSG’s Green Loan Framework, which was first established when it secured private funding from a consortium of four banks for the Red Sea destination in 2021,” the statement added.

    The announcement followed RSG’s opening of its first properties for sale at Amaala, including branded residential communities and a five-bedroom villa on a private island.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17430045/main.jpg
    Yasir Iqbal
  • MECC submits lowest bid on three Kuwaiti oil and gas contracts

    25 June 2026

     

    Kuwait-based Mechanical Engineering & Contracting Company (MECC) has submitted the lowest bid across three separate contracts tendered by the state-owned upstream operator Kuwait Oil Company (KOC).

    The total value of the low bids is $427m, and all of the contracts are focused on developing substations to power industrial lift pumps and remote header manifolds

    Five companies submitted bids for a contract to develop several substations to power industrial lift pumps and remote header manifolds in areas 6, 10 and 12 in southern and eastern Kuwait.

    The bidders were:

    • MECC: KD65,760,000 ($212m)
    • Heavy Engineering Industries & Shipbuilding Company: KD70,630,000 ($228m)
    • Amco Engineering & Construction: KD73,446,100 ($237m)
    • Combined Group Contracting Company: KD76,186,000 ($246m)
    • Nasser Mohammed Al-Badah & Partner General Trading & Contracting: KD79,332,417 ($256m)

    Six companies submitted bids for a contract to develop several substations to power industrial lift pumps and remote header manifolds in areas 8 and 13 in southern and eastern Kuwait.

    The bidders were:

    • MECC: KD30,760,000 ($99m)
    • Badr Al-Mulla & Brothers: KD32,662,040 ($106m)
    • Heavy Engineering Industries & Shipbuilding Company: KD34,139,000 ($110m)
    • Industrial Company for Electrical Projects: KD36,375,520 ($118m)
    • Nasser Mohammed Al-Badah & Partner General Trading & Contracting: KD37,278,526 ($120m)
    • Combined Group Contracting Company: KD37,790,000 ($122m)

    Eight companies submitted bids for a contract focused on developing several substations to power industrial lift pumps and remote header manifolds in areas 7, 9, and 11 in southern and eastern Kuwait.

    The bidders were:

    • MECC: KD35,760,000 ($116m)
    • Badr Al-Mulla & Brothers: KD39,447,165 ($127m)
    • Amco Engineering & Construction: KD39,736,800 ($128m)
    • Heavy Engineering Industries & Shipbuilding Company: KD40,105,000 ($130m)
    • Industrial Company for Electrical Projects: KD43,238,265 ($140m)
    • Engineering Company for Petroleum & Chemical Industries (Enppi): KD43,514,805 ($141m)
    • Combined Group Contracting Company: KD43,650,000 ($141m)
    • Nasser Mohammed Al-Badah & Partner General Trading & Contracting: KD43,706,826 ($141m)

    Kuwait’s oil and gas sector has been in crisis in recent months due to disruption from the regional conflict that started after the US and Israel attacked Iran on 28 February 2026.

    A preliminary peace agreement between the US and Iran, which was announced on 14 June, has increased optimism that disruption to the sector will decrease in the coming weeks.

    Under the terms of the agreement, both sides have stated that the free flow of vessels will be permitted through the Strait of Hormuz, through which nearly all of Kuwait’s crude oil is normally exported.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17423009/main.jpg
    Wil Crisp
  • Chinese firm wins $265m Saudi hospital contract

    24 June 2026

    Zhejiang Construction International, the local subsidiary of Chinese contractor Zhejiang Construction Investment Group, has won a $265m contract to build the Prince Mohammed Bin Fahd University Speciality Hospital in Al-Khobar.

    Construction is expected to take three years from the start date.

    Prince Mohammed Bin Fahd University awarded the contract.

    Located in Al-Raja district, Al-Khobar, in Saudi Arabia’s Eastern Province, the hospital project will cover about 60,000 square metres.

    The contract covers the construction of a 10-storey hospital building, two five-storey auxiliary buildings connected by corridors and a basement.

    Work will include civil works, mechanical and electrical installation, curtain walling, landscaping, detailed design and the procurement of medical equipment.

    The award is the latest in a series of contracts secured by Chinese contractors from Saudi entities in recent months.

    Last week, MEED reported that Saudi Arabia’s Ministry of Municipalities & Housing awarded contracts worth more than SR1.9bn ($506m) to Chinese contractors for two residential developments in the kingdom.

    China Architectural Construction Corporation won the first contract, valued at SR875m ($233m), to build 2,010 housing units at the Al-Ruba residential project in Riyadh.

    China State Construction Engineering Corporation secured the other contract, valued at more than SR1bn ($266m), for the Al-Rasha Al-Faisaliah residential project in Dammam, comprising 2,426 housing units.

    GlobalData expects Saudi Arabia’s construction industry to record average annual growth of 5.2% in 2025-28, supported by investments in transport, electricity, housing and tourism infrastructure, as well as the $850bn-plus gigaprojects programme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17412846/main.jpg
    Yasir Iqbal