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Automation of commercial registries, notary offices to be hindered by dollar crisis - Daily News Egypt

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Automation of commercial registries, notary offices to be hindered by dollar crisis

Companies will face difficulties in opening letters of credit in dollars, says Sayed Ismail


By Daily News Egypt

The government has to create pricing plans for the two recent tenders offered for partnership with the private sector to automate commercial registries and notary offices, as well as future projects, due to the dollar crisis, said Hamdy El-Leithy, CEO and Managing Director of Linatel and head of the Communications Division of the Chamber of the IT Industries.

According to El-Leithy, the two projects will be affected by the current dollar crisis, especially since the majority of their required components are imported, particularly hardware. El-Leithy wondered how the companies that entered into tenders for the project would be able to present their financial offers in light of instability in the dollar exchange rate, taking into account the huge cost of implementing the two projects, which is estimated at EGP 2bn.

He also said that projects should not have been put forward except until the dollar rate stabilises in order to avoid the negative effects of the situation. A delay in the execution of the projects is expected as companies will suffer to provide the required components, and the required standards may be reduced. The companies executing the projects might also raise their prices for citizens if they suffer financial losses due to the current dollar crisis.

On his part, head of the work group of banks at the Chamber of the IT Industries, Sayed Ismail, confirmed the crisis and criticised the monetary policy of the Central Bank of Egypt (CBE), describing it as short-sighted.

Regarding the possibility that banks might participate in financing the implementation process of the projects, Ismail asserted that banks have a desire to invest their accumulated money. However, executing companies  will probably face difficulties in opening letters of credit in dollars, even if the foreign companies supplying the components of the project agree to provide credit facilitation to executing companies.

For several months, Egypt has been suffering a crisis in providing dollars, which led to the increase in the dollar price against the Egyptian pound. CBE also issued a decision during the first quarter of this year, setting a ceiling for dollar deposits for companies at $10,000 a day, and no more than $50,000 a month.

 

Topics: dollar crisis

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https://ww.dailynewssegypt.com/2015/10/27/automation-of-commercial-registries-notary-offices-to-be-hindered-by-dollar-crisis/
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