The Supreme Compensation Committee of the Ministry of Housing, Utilities and Urban Communities approved new tables for the percentages of compensation owed to contracting, supply and public services companies for government contracts, for the period from January 1 to June 30, 2025, by calculating the price differences for the month of May 2024.
The tables showed a recorded discrepancy in compensation rates between sectors. The committee increased compensation for operation and maintenance work without spare parts by 12%, guarding and security services by 6%, and cleaning and solid waste landfill management services by 5%.
The increases also included the supply of maintenance spare parts for the first and second lines of the metro and escalators by 4%, train bearings by 3%, and civil aviation workshop equipment by 2%.
At the supply sector level, the committee reduced compensation for UPVC pipes by 11% and rebar by 3.5%, while raising compensation for flexible cast pipes by 6%, GRP pipes by 8%, and prestressed reinforced concrete pipes by 5%.
Irrigation and canal rehabilitation projects achieved increases ranging from 5% for dredging and weeding works, and 18% for tamping and concrete rehabilitation works, while the percentages were stabilized for the information technology sector, computers and networks, and contracts for tractors and railway beams.
Applies to: The table covers between 75 and 80% of the price differences in government contracts
Hisham Yousry, Secretary General of the Egyptian Federation of Construction and Building Contractors, said that the new amendments cover between 75% and 80% of the price differences borne by the companies, stressing that the state shares with contractors in bearing part of the burdens.
He explained that the impact of reducing compensation for raw materials such as iron and UPVC pipes varies according to the terms of each contract, and whether it includes price change equations since the award or depends entirely on government compensation.
Lokma: The percentages were lower than expectations by about 10%, and liquidity depends on accelerating the exchange rate
For his part, Mohamed Lokma, Chairman of the Board of Directors of “Details Contracting and Construction” Company, indicated that the approved schedules represent a positive step, but they were less than companies’ expectations by about 10% on average, especially with the rapid fluctuations in the prices of imported raw materials and the exchange rate compared to the mechanism for calculating compensation.
He expected the start of disbursement procedures with the start of the new fiscal year in August, calling for an increase in financial allocations to pay late dues by 30% to ease the cash pressures on small and medium-sized companies.
Youssef: Delaying disbursement increases the financing burdens on companies
In the same context, Shams El-Din Youssef, Chairman of the Board of Directors of Al-Shams Contracting Company, confirmed that the current rates cover, on average, about 70% of the amount of damage to contracts.
He explained that the real crisis lies in the slow procedures and delayed disbursement approval, which imposes additional financing burdens on companies as a result of the current high cost of borrowing, and reduces the expected financial impact of compensation upon receipt.
