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Thu 27 Nov 2014 01:36 PM

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Arabtec board changes slow $40bn Egyptian housing deal

Egypt's housing minister says negotiations to implement massive building project has been impacted by shake-up

Arabtec board changes slow $40bn Egyptian housing deal

Negotiations to implement a $40 billion scheme for one million new homes inEgypt have been slowed by board changes at the Dubai-based contractor Arabtec Holding, Egypt's housing minister said on Thursday.

But Mostafa Madbouly said he believed that would only have a minor impact on the project's delivery, seen as vital in easing the country's housing shortage in a state that has experienced major political and economic upheaval in recent years.

"The process slowed down a bit with the changes in the board but now we have a new board and are starting active negotiations with Arabtec," the minister told an investment event in Abu Dhabi.

"I think what happened with Arabtec will only delay things one month or two but it won't be a big delay," he told reporters at the event, noting the original timetable had been to conclude talks by the end of November.

In October, Arabtec said it planned to launch the first phase of the huge housing project by the end of the year.

Arabtec had previously said the first homes in the project backed by both the Egyptian and UAE governments would be delivered in early 2017, with the whole project to be completed by 2020.

Arabtec endured a period of turmoil in mid-2014 as the sudden resignation of Hasan Ismaik in June undermined the growth prospects of the company.

This came amid talk of a fall-out between the former chief executive and state-owned Aabar Investments, which had been using its influence to secure the contractor a number of major projects.

Madbouly said his housing ministry had started to discuss the price of the units in the scheme and the final feasibility study would be presented to it in the next couple of weeks.

"As soon as we reach an agreement with Arabtec and have the approval of cabinet, we will make this a model for future public private partnerships," Madbouly added.

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