The multi-billion dollar venture involves transforming a 700 square-kilometre swathe of desert into a gleaming capital and business hub
Talks between Egyptian officials and the Dubai-based Emaar Properties to develop a 1,500 acre (607 hectares) plot in the new administrative capital have stalled, underscoring the country’s struggle to involve top-tier foreign companies in the mega project.
“The negotiations have stopped,” Ahmed Zaki Abdeen, who heads the company created to oversee the construction of the city, said in a phone interview.
The Emirati company wanted to buy the land at a price below the 3,500-4,000 Egyptian pounds ($223) per square meter typically sought for the residential developments in the project, he said.
The participation by Emaar had promised to add a lustre to the multi-billion dollar venture overseen by President Abdel Fattah El-Sisi. Egypt’s plan involves transforming a 700 square-kilometre swathe of desert into a gleaming capital and business hub, replete with gardens, lakes and the kind of order that has eluded Cairo and its roughly 20 million residents.
Abdeen’s remarks come after Shanghai-listed China Fortune Land Development Co. pulled out from a $20 billion development in the new capital. Egyptian officials said the two sides had disagreed over how to share revenue.
Mohamed El Dahan, Emaar’s regional chief executive officer, declined to comment.
A spokesman for Emaar Misr, the company’s Egypt unit, said the “interest in the new administrative capital and other land offered by the government is ongoing. These are always subject to long-term negotiations and financial evaluation by all parties involved.”
It’s not the first time Emaar and Egypt have struggled to reach a deal over the new capital, which was launched with tremendous fanfare in 2015.
Emaar Chairman Mohamed Alabbar had initially been slated to lead the development of the project. Instead, the Administrative Capital for Urban Development, a joint venture between the military and the housing ministry, was created to oversee the construction of the city that sits on what’s presently desert land 45 kilometres east of Cairo.
The most populous Arab country has struggled to bring in foreign direct investments outside of the oil and gas industry. FDI dropped $200 million to $7.7 billion in the 2017-2018 fiscal year ended in June, according to the central bank.
With the exception of the business district, which is being developed by a Chinese company, work on the project has so far been undertaken by the housing ministry, the military and Egyptian contractors, who have bought smaller parcels of land.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.