Explained: Construction Contractors

The Contractors’ Syndicate was established in the 1950s under the name of the General Syndicate of Syrian Contractors. Its operations were regulated per the provisions of the Construction Contractors’ Profession Regulation Law No. 237 of 1956, which was amended by Law No. 2 of 2006. The latest, and currently in force, Contractors’ Syndicate Law No. 9 of 2014 stipulated that all contractors should be members of the syndicate and changed its name to the Construction Contractors’ Syndicate.

According to Law No. 9 of 2014, a contractor is a natural or legal person registered at one of the syndicate’s branches, and a member thereof who executes contracting works such as building maintenance, roads, bridges, railways, land reclamation, dams, water networks, well drilling, electrical or mechanical works, marine constructions, and others. An individual contractor is referred to as a natural contractor, a contracting company as a legal contractor, while an engineering contractor is termed a de-facto contractor.

A contractor obtains a classification from the syndicate based on their financial situation and technical competence. According to the Ministry of Public Works and Housing Decision No. 2828 of 2021, based on Ministerial Decision No. 1296 of 2003, there are seven categories of contractors: an “excellent” category and six other categories ranked from one to six.

According to the annexes of Decision 2828, the engineering experience and positions previously held by the contractor and the projects executed are used to calculate the financial situation. For example, the general manager position is equivalent to SYP 300 million annually, while the experience of an overseeing execution engineer is equivalent to SYP 45 million. The equipment owned by the contractor is also included in the calculation of the financial situation.

According to Law No. 9 of 2014, a contractor must be Syrian, at least 20 years of age, not convicted of a disgraceful felony, not prohibited from practising the profession, have a suitable office that meets the standards set in the internal regulations of the syndicate, not employed in the public sector or joint sector, i.e., mixed private-public sector, and possess the required financial solvency and technical competence.

Contractors’ Syndicate and Construction Permits

Directive No. 11203/1 issued by the Prime Minister’s Office in August 2023 mandates that all construction permit holders must exclusively execute the construction by contracting contractors registered in the syndicate. The direct reason for this exclusivity is not clear. However, official entities justify it by the need to define roles and responsibilities distributed among administrative units, the Engineers’ Syndicate, and the Contractors’ Syndicate, especially after the disastrous outcomes of the earthquake on February 6, 2023.

Directive 11203/1 followed a series of meetings held by the Services and Infrastructure Committee of the Ministry of Local Administration and Environment, with representatives from both the Construction Contractors’ Syndicate and the Engineers’ Syndicate, to review the mechanisms followed for constructing buildings in Syria and define the roles and responsibilities of all parties in disaster situations. This led to a government task force composed of deputies from the Ministries of Local Administration and Environment, Public Works and Housing, and Water Resources, along with the heads of the Engineers’ and Construction Contractors’ Syndicates. The outcomes of the government task force were issued within Directive No. 11203/1, which included three main points: firstly, the necessity of adhering to the legal regulations and controls. Secondly, no construction permit should be executed except through a contractor accredited by the syndicate. And thirdly, the appointment of a resident engineer to oversee the project on the construction site.

In October 2023, the Ministry of Local Administration issued a circular, without a number, mandating administrative units not to grant building permits without a certified contract between the building owner and a classified contractor. This means that a construction contract has become an additional requirement for licensing. A construction contract is an agreement signed between the building owner and the classified contractor, acting as the builder. The contract includes the obligations of both parties, the duration of execution, specifications of the work, costs and fees, and payment schedules, as well as terms and penalties in case of breach of the agreement and its clauses.

According to the official press, ministerial directive 11203/1 and the Ministry of Local Administration circular impacted construction activity, resulting in a decrease in building permit applications and imposing high fees and costs on them. In addition to the contractor’s fees for the construction, the construction contract incurs fixed fees and other costs calculated as a percentage of the construction costs, which are collected by the Ministry of Finance and the Contractors’ Syndicate.

Therefore, anyone wishing to construct a permitted building in a zoned area is now required to pay engineering costs to the planning engineer and fees to the Engineers’ Syndicate, costs to the classified contractor performing the work and fees to the Contractors’ Syndicate, licensing costs and fees to the administrative units, and building materials costs and prices.