By Mohamed Alaa El-Din
The information and communications technology (ICT) market reacted positively to the Ministry of Communications’ announcement of launching new projects; however potential negative impacts were noted.
Managing Director and CEO of Integrated Systems and Cairman of the Integrated Solutions Group in Eitesal Association, Mokbel Fayyad, said launching huge projects in telecommunications sector during the current period is a positive step.
However, putting forward the current EGP 2bn projects has negative impacts, he pointed out.
Fayyad believes the projects should have been launched over several stages, especially since the market is still suffering from a five-year lack of demand. The Ministry of Communications had stopped launching projects in light of the recent circumstances, while the government used to be the largest buyer in the market.
He said it is illogical to launch three EGP 5bn projects at once within six months, after a five-year period of no projects. He noted that such a step will lead to confusion within the market, and may lead to stopping the projects.
Fayyad also expressed concern over local companies having to face fierce competition with their foreign counterparts, especially as foreign companies have experience and are in a better financial situation. This would negatively affect the growth of demand for local companies, he noted.
He further highlighted law 67/2010, which organises PPP projects, as it does not guarantee a preference for partnership with local companies if foreign companies win tenders.
He added the current law must be amended to guarantee the participation of local companies, in order to provide them with experience and support them in facing the difficult economic conditions.
Meanwhile, Sayed Ismail, member of the Chamber of Information Technology & Communication Industry (CIT), said there are a number of points that should be considered when preparing tenders for the development of notary offices and commercial registry offices.
He noted that specifying a business size for companies applying for those tenders is unfair to local companies, whereby the ministry stipulated that a business must be worth EGP 100m to apply. This is a very large number for local companies that have been suffering for over four years, he said.
He said projects should have also been geographically distributed according to governorates, giving local companies a chance to participate in the implementation of the projects. He noted that another alternative was to divide projects according to components such as maintenance, supply, and so on.
Ismail further noted that main contractors implementing the project should be conditioned to work with subcontractors and oblige them to announce their names to ensure that local companies benefit from such projects.