Strategic Management
Assignment 2

Doing business in Egypt
Dealing with construction permits

Many accidents occurred in Egypt in the last few years due to difficulties imposed by authorities regarding dealing with construction permits. Reducing such occurrences will require both efficient regulation and proper enforcement.
Denmark, Georgia, New Zealand and Thailand are examples of countries that manage to regulate the construction permitting process with relatively few requirements, yet their regulations are considered buildings safe.
It is not easy to find the right balance between safety and efficiency in construction regulations. They need to be both clear and adaptable to economic and technological change.
Making it easier to deal with construction permits help the growth of the construction industry. Consequently, more construction workers are employed, construction-related materials and services are purchased from local suppliers, and local jobs are created. For every 10 jobs directly related to a construction project, 8 other jobs may be created in the local economy. Doing Business records the procedures, time and cost required for a small to medium-size business to obtain all the necessary approvals to build a simple commercial warehouse and connect it to water, sewerage and a fixed telephone line , it includes all types of inspections and certificates needed before, during and after construction of the warehouse.

HOW DOES CONSTRUCTION PERMITTING WORK IN EGYPT Across Egypt, dealing with construction permits requires on average 18 procedures that take 163.5 days at a cost of 109.4%of income per capita (EGP20,683). This is significantly cheaper than the average of the Middle East and North Africa (283.3% of income per capita), but slightly slower In Hong Kong SAR, China, the best-performing economy in the Doing Business 2014 global ranking, dealing with construction permits requires just 6 procedures that last 71 days and cost 15.4% of income per capita. It is easier to comply with the formalities to build a warehouse and connect it to utilities in Suez, Mansoura and Ismailia and more difficult in Alexandria and Aswan Suez, Egypt’s best performing city, requires 13 procedures, 144 days, and 58.9% of income per capita.

1-It takes 21 procedures in 179 days to deal with construction permits. It costs 108% of per capita income. Egypt ranks 149 out of 189 in the dealing with construction permits.
2-It takes 7 procedures in 54 days to get electricity in Egypt. It costs 337.4% of per capita income. Egypt ranks 105 out of 189 in getting electricity. Establish one-stop shops for building approvals In the medium term, preconstruction clearances together with the building permit approval can be consolidated into a one-stop shop. One-stop shops improve the organization of the review process— not by reducing the number of checks needed, but by better coordinating the efforts among different authorities. The Governorates, the municipal authorities and the Ministry of Housing and Urban Development can find inspiration from the existing one-stop shops for business start-ups. The single-window principle would be especially effective in Egypt for tackling complex systems of approvals. Some cities are already moving in this di- rection. For instance, a smart center was established in Alexandria in 2007 with the goal of providing an efficient one- stop shop for business-related licenses. To be effective, one-stop shops must have access under one roof to technical know-how and informational tools, such as master urban plans, zoning maps and ministerial guidelines. If it is difficult to have a permanent representative of each relevant agency in the one-stop shop, a part-time system where representatives from the different agencies come to the one-stop during certain hours or days of the week can be a viable alternative. Globally, 36 economies have some type of one-stop shop for construction permitting. Most recently, Mauritania and Tai- wan, China, introduced one-stop shops while Morocco made improvements to the one created in 2006. One telling example is Hong Kong SAR (China), where in 2009 the government merged 8 procedures involving 6 agencies and 2 private utilities into a one-stop shop. Today only 6 procedures are needed to obtain a construction permit. Make the permitting process more transparent Municipal administrations that make clear and complete information easily accessible online help professionals and entrepreneurs to avoid delays when dealing with construction permits. Offering developers municipal guides with procedural steps, documentation requirements, fee schedules, and relevant legislation would help improve the administration of permit applications. In addition, publicly displaying these guidelines and fee schedules within municipal premises or on the internet would make the process more transparent for the public.