Egypt Country Profile

Public Procurement and Contracting

Business Corruption

Public procurement in Egypt has been stained by corrupt practices. The Office of the United States Trade Representative 2007 reports that numerous concerns regarding a lack of transparency in public procurement procedures remain, such as the power of the Prime Minister to determine and authorise the terms, conditions and rules of the tendering method for specific entities. According to the CIPE & Ahram Center for Political and Strategic Studies Egypt SME Survey Report 2009, a great majority of SMEs experienced with public procurement report that bribery sometimes occurs in order to win government contracts. Companies are recommended to use a specialised public procurement due diligence tool in order to help mitigate corruption risks associated with public procurement in Egypt.

Bribery is common in the housing sector in relation to awarding contracts and granting demolition and building licences, as reported by Al-Ahram Weekly. Several corruption scandals have been revealed within this sector, including international cases where Egyptian contractors have been charged with committing corrupt acts abroad. For example, in October 2008, the British company Balfour Beatty agreed to pay GBP 2.25 million to settle bribery allegations concerning the company's involvement in the rebuilding of the Alexandria Library. When agreeing on the settlement, Balfour Beatty accepted that payment irregularities had occurred within a subsidiary entity.

Political Corruption

According to a June 2009 article in the online newspaper Egypt News, officials from the Egyptian Health Ministry have been charged with taking a LE 300.000 bribe to help a medical equipment company win a tender from the Ministry's Contract Office.

Read more on public procurement under 'Public Anti-Corruption Initiatives' in the Initiatives section.

Frequency

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the diversion of public funds to companies, individuals, or groups due to corruption a score of 3.1 on a 7-point scale (1 being 'very common' and 7 'never occurs').

- Business executives give the favouritism of government officials towards well-connected companies and individuals when deciding upon policies and contracts a score of 2.9 on a 7-point scale (1 being 'always show favouritism' and 7 'never show favouritism').

CIPE & Ahram Center for Political and Strategic Studies: Egypt SME Survey Report 2009:
- When asked how government tenders are implemented, 33% of SMEs surveyed stated that 'laws are interpreted to favour specific interests' while 26% indicated that there is 'poor oversight by those implementing the laws'.

- Of the SMEs experienced with public procurement, 39% stated that bribery occurs to a great extent to win government contracts, while 40% stated that it happens to a limited extent.

The World Bank & IFC: Enterprise Surveys 2008:
- 12.5% of companies surveyed expect to give gifts to win a government contract.

- The value of a gift expected to secure a government contract is 1.17% of the contract value.