Interview: Hassan Allam
What role have large-scale infrastructure projects played in building knowledge and capacity in the construction sector?
HASSAN ALLAM: The government has made efforts to ensure that local firms benefit from government expenditure, and improve their capabilities through participation in large-scale projects. In addition, when foreign technology providers, engineering firms or partners are involved, it has been ensured that they transfer technology and know-how to local players. These projects have included roads and ports, power generation plants, water treatment plants and utilities networks, as well as the ongoing development of new cities. Some of these undertakings are very technical, and the scale and speed at which they have been carried out have required local construction and engineering firms to develop new capacities.
Given the level of investment, there have been a number of opportunities for companies to expand and for market entrants to get a strong start. This expenditure has given rise to significant numbers in terms of company growth and the ability to take on this kind of work. I think over time you will see some of these companies, some of which were only launched four or five years ago, begin to export their services in these new areas.
In which areas has technology affected the industry and the skill sets needed to be competitive?
ALLAM: Technology is changing the construction and engineering sector in several ways. The evolution of materials is allowing for developments in the structures and designs that can be carried out, as well as the speed and the flow of work. New machinery is having a similarly significant impact.
This underlines the importance of human capital. Egypt’s talent pool is strong, but in my opinion significant change needs to take place. We do not make enough use of technology because we have always relied on employing more people. It was more important to employ extra people and harness their skills than it was to make use of new technology. Yet we are now in a world where efficiency and speed have reached a stage where reliance on human capabilities alone is no longer an option. You need to bring in new technology to save energy, to save time, to reduce costs and to enhance quality, as well as to increase human and structural safety.
This evolution is a common one within the sector, and companies will have to develop and adapt, or face the usual consequence of not being able to compete in the face of clients’ changing demands. We can already see that these demands are shifting, and they will continue to develop as concerns about environmental sustainability increase. In short, you need the new technology and you also need the people who know how to use it effectively.
How well positioned is Egypt to export construction and engineering services to Africa?
ALLAM: In Africa, you see sizeable, expanding populations and a growing need for basic infrastructure like power, water, sewage treatment, roads and so forth. Egypt has the resources, in terms of population size, engineering talent pool and equipment, to carry out the types of projects that we will see developed across Africa over the next decade. South Africa is a significant competitor, but because its own market is of a significant size and it is focused on the neighbouring countries in the area, Egypt has a golden opportunity to expand in North Africa and in the eastern and western regions of sub-Saharan Africa.
The African market is a dynamic one, and Egyptian companies can compete with the Chinese and Indian firms that are already investing in the continent. The main challenges for Egyptian construction and engineering firms will be financing and developing the project finance capabilities of individual companies.
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