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Addressing the Effects of Increasin

Addressing the Effects of Increasing Fuel Prices
In an attempt to address the effects of increasing fuel prices on ongoing projects between contractors and State organs including ministries, authorities, agencies, municipalities, and public bodies (hereinafter referred to as "Administrative Bodies"), the Prime Minister issued Decree No. 539 of 2015 on 11 March 2015 (the "Decree").[1]
Background
The Prime Minister had previously issued Decree No 1160/2014 on July 3, 2014, determining the prices of fuel for consumers, which resulted in the increase in fuel prices during the summer of 2014. Said decree entered into force on 5 July 2014. Naturally, the increase in fuel prices has had a deep impact on all aspects of life in Egypt, including affecting contractors and contracting parties' obligations in contracts concluded with Administrative Bodies.
Compensation
The Decree stipulates that it will be mandatory for all Administrative Bodies to pay compensation to the contractors with which they have entered into contracts regarding the implementation of construction works. According to the decree, compensation is payable for (1) works, tenders, and contracts of which the technical offers were considered before the effective date of Prime Minister's Decree No. 1160 of 2014 (referred to above), and (2) contracts concluded before Decree No. 1160 of 2014 entered into force, and in which the contractor has not yet communicated with the Administrative Body for purposes of the initial delivery of the works, and (3) similar contracts of which the term has been extended beyond 5 July 2014, for reasons outside of the contractors’ control. The new Decree includes a schedule showing the effects of the increase in fuel prices on the implementation of construction projects. The schedule sets out the different works and difference in fuel prices payable to contractors, including the result of the increase in fuel prices on materials such as cement, steel, reinforced concrete, and bricks.
Conclusion
The Decree aims to reduce the negative effects of the increase in fuel prices on contracts with Administrative Bodies in order to ensure the continuity of the projects that are the subject of such contracts, as well as balancing the different interests and obligations of the parties. This will undoubtedly reduce claims and lawsuits that the Administrative Bodies would inevitably face.   [1] Prime Minister's Decree No. 539/2015 addressing the Effects of Increasing Fuel Prices, Official Gazette, Issue No. 10 (bis) (d), 11 March 2015.
In an attempt to address the effects of increasing fuel prices on ongoing projects between contractors and State organs including ministries, authorities, agencies, municipalities, and public bodies (hereinafter referred to as "Administrative Bodies"), the Prime Minister issued Decree No. 539 of 2015 on 11 March 2015 (the "Decree").[1]
Background
The Prime Minister had previously issued Decree No 1160/2014 on July 3, 2014, determining the prices of fuel for consumers, which resulted in the increase in fuel prices during the summer of 2014. Said decree entered into force on 5 July 2014. Naturally, the increase in fuel prices has had a deep impact on all aspects of life in Egypt, including affecting contractors and contracting parties' obligations in contracts concluded with Administrative Bodies.
Compensation
The Decree stipulates that it will be mandatory for all Administrative Bodies to pay compensation to the contractors with which they have entered into contracts regarding the implementation of construction works. According to the decree, compensation is payable for (1) works, tenders, and contracts of which the technical offers were considered before the effective date of Prime Minister's Decree No. 1160 of 2014 (referred to above), and (2) contracts concluded before Decree No. 1160 of 2014 entered into force, and in which the contractor has not yet communicated with the Administrative Body for purposes of the initial delivery of the works, and (3) similar contracts of which the term has been extended beyond 5 July 2014, for reasons outside of the contractors’ control. The new Decree includes a schedule showing the effects of the increase in fuel prices on the implementation of construction projects. The schedule sets out the different works and difference in fuel prices payable to contractors, including the result of the increase in fuel prices on materials such as cement, steel, reinforced concrete, and bricks.
Conclusion
The Decree aims to reduce the negative effects of the increase in fuel prices on contracts with Administrative Bodies in order to ensure the continuity of the projects that are the subject of such contracts, as well as balancing the different interests and obligations of the parties. This will undoubtedly reduce claims and lawsuits that the Administrative Bodies would inevitably face.   [1] Prime Minister's Decree No. 539/2015 addressing the Effects of Increasing Fuel Prices, Official Gazette, Issue No. 10 (bis) (d), 11 March 2015.