Plans to construct a new capital in Egypt has assumed a new dimension after the Housing Minister Mustafa Madbouly announced the government will be taking charge of its construction.
Egypt says is now set to take over the long troubled project of the construction of the new Capital at Cairo, after failing to close a deal with the UAE investor meant to lead a project that some have compared 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’ Eiffel Tower.
The mega-project was unveiled in March at the Sharm el-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.
But Egyptian officials said Mohamed Alabbar, the United Arab Emirates 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.
According to Housing Minister Mustafa Madbouly 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
“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.
“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 Mohammad Morsi from the presidency in mid-2013 following mass protests.