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Wed 9 Sep 2015 01:46 PM

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Egypt said to scale back Arabtec's mega housing deal

Housing Ministry reportedly cuts size of UAE firm's contract to 100,000 homes from original one million

Egypt said to scale back Arabtec's mega housing deal

Egypt's Housing Ministry has scaled back the size of a housebuilding project with United Arab Emirates-based Arabtec to 100,000 homes from the originally agreed one million, a local newspaper has reported.

Arabtec, Dubai's largest listed construction firm, announced more than a year ago that it had agreed in principle with the Egyptian government to build one million homes in the country, but has denied a report that it would only develop the first phase of 100,000 units. The UAE company declined to comment on Tuesday's report.

"Negotiations with the company are currently taking place over the building of 100,000 units within five years," Al Masry Al Youm newspaper quoted Egyptian Housing Minister Moustafa Madbouly as saying in an interview.

"There is no place for talks about assigning the million unit project that was announced 18 months ago." Madbouly did not give a reason for downsizing the project.

In 2013, then army chief Abdel Fattah Al Sisi toppled Egypt's first freely-elected President, Islamist Mohamed Mursi, after mass protests against his rule.

Sisi went on to become elected president and has announced a series of mega projects, from housing to an expanded Suez Canal to roadworks, in an effort to rebuild an economy battered by political turmoil since a 2011 uprising.

Companies still face paralysing bureaucracy despite government promises to start a new chapter for investors. Some top businessmen have complained about the slow pace of reforms in the Arab world's most populous nation.

The Egyptian housing project, said to be worth $40 billion, was part of vital economic and political support from oil-producing Gulf Arab states including the United Arab Emirates, which has provided billions of dollars of aid to Cairo since Mursi was ousted in mid-2013.

Egypt and its Gulf Arab allies see Mursi's Muslim Brotherhood movement as an existential threat to the region and the West, allegations it denies.

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