ARAB ACADEMY FOR SCIENCE, TECHNOLOGY & MARITIME TRANSPORT

MASTER OF BUSINESS ADMINISTRATION PROGRAM (MBA)

MANAGERIAL ECONOMICS

Effect of Covid -19 on Construction Field

PRESENTED TO :
Professor. Dr. Mohamed Abed

Prepared By : Mahmoud Ahmed Samy Elsaid Mohamed – 1PP

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 ARAB ACADEMY FOR SCIENCE, TECHNOLOGY & MARITIME
TRANSPORT

MASTER OF BUSINESS ADMINISTRATION PROGRAM (MBA)

Index
A. Introduction
B. Before COVID-19
C. After COVID-19
D. Conclusion & Recommendations

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 A- General Introduction
The coronavirus (COVID-19) was explored in December 2019, in Wuhan, China. The coronavirus (COVID-19) is
becoming a pandemic as announced by (WHO) on March 11 2019. As a result, the COVID-19 has created a wide
range of reactions from Egyptian government. like bans on public gatherings, travel restrictions, school closings, new
forms of social welfare of these actions. Therefore, this paper aims to evaluate the impact of Covid-19 on construction
projects in Egypt and managing the economic consequences.

B- Before Covid-19
Before Covid-19 Construction field in Egypt was stable and attractive for foreign investment as the demand for
Construction was ascending which reflects elastic behavior for revenue, For Example My current Company
“Kharafinational” had operated work done with total revenue 1.8 billion $ in 2019

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 C- After Covid-19
After Covid-19 Construction field in Egypt has been hit hard and challenged by many obstacles regarding
contractual obligations, availability of resources, deliverables, health and safety measures, and project delays or
cancellations. the demand for Construction projects is descending , For Example My current Company
“Kharafinational” had operated work done with total revenue 1.3 billion $ in 2020. this observed decrease in
revenue comes from many reasons like but not limited to :-
TC
1. Delay in delivering imported material due to stoppage of worldwide trade
$
shipment as result of pandemic.
VC(Q)
2. Delay in construction activities resulted from low productivity due to curfew
restrictions implemented at the second quarter of 2020.
3. Performed work is less than normal compared to total cost as result for
quarantine for staff and workmanship. FC

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Q
 C- After Covid-19
4. Lack of response form majority of construction entities “suppliers,
subcontractors, supervision” some of them put their business on hold as
one of pandemic consequences.
5. Liquidity shortages threaten the stability of construction, especially in
projects with external fund “Foreign investment”. For example one of
Kharafinational clients has delayed payments more than 6 months.
6. The demand for construction projects decreased as normal result of
the decrease in housing demand.

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 D- Conclusion & Recommendations
1. Covid 19 has negative impact on construction field.
2. Companies need to understand their contractual rights and responsibilities for each project in order to
minimize disputes pursuant to particular clauses that refer to force majeure, government intervention or
legislative changes need to be considered carefully.
3. Companies shall develop cost reduction techniques for Running costs & Fixed cost through managing staff
requirements and maintain skilled / multitask workmanship.
4. Companies should review, in detail cash flow in next number of months and identify what mitigating actions
can be taken to preserve cash in the short/medium term or to identify new sources of funding.
5. Construction Companies shall adopt new vision and focus on industrial projects instead of residential.
6. Construction Companies shall fiend appropriate alternatives for raw materials in local market or minimize
risk resulted form worldwide trade shipment.
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