Egypt after rapid results takes charge of building new capital
By Lin Noueihed and Michael Georgy
Reuters reported on 10 December 2015 that Egypt’s cash-strapped government says it has taken charge of plans to build a new capital after failing to close a deal with the UAE investor meant to lead a project some have compared in its ambition to the ancient pyramids.
Built to escape Cairo’s overcrowding and pollution, the new administrative capital was expected to cost a total $300 billion and feature an airport larger than London’s Heathrow and a building taller than Paris’s Eiffel Tower.
The mega-project was unveiled in March at the Sharm al-Sheikh economic summit, where President Abdel Fattah al-Sisi urged foreign investors to help Egypt recover from turmoil unleashed after the 2011 uprising against Hosni Mubarak.
Phase one alone was expected to cost $45 billion.
But Egyptian officials said Mohamed Alabbar, the United Arab Emirates (UAE) property tycoon who helped develop Dubai’s Burj Khalifa skyscraper, would not be the lead partner in the venture due to disagreements on the finances.
Alabbar did not respond to requests for comment.
Instead, the government will set up a wholly-owned company to lead the venture and allocate specific projects to private developers from the Gulf and elsewhere, which may include Alabbar’s Capital City Partners, Housing Minister Mustafa Madbouly told Reuters .
“Any memorandum of understanding is just an initial demonstration of interest but when you start to negotiate the details you definitely have the possibility of not reaching the expectation of any one of the partners and this is what has happened,” Madbouly said.
The timeline was a key sticking point, with the government keen to progress at an accelerated speed, Madbouly said.
Another point of contention involved how much money the UAE partner would invest.
“This was part of the discussion, of course, that based on the proposed share of each of the partners we requested an upfront investment to be offered from the developer,” he said without giving the numbers involved.
Located east of the ancient city of Cairo, the new capital is the grandest in a series of mega projects launched under Sisi, who has pushed for rapid results in a country where bureaucracy is known to slow business.
Gulf states have showered Egypt with billions of dollars in aid since Sisi removed the Muslim Brotherhood’s Mohamed Mursi from the presidency in mid-2013 following mass protests.
Further reading is in Reuters bulletin.