Egypt keeps building new capital despite difficulties
Cairo - Egypt has taken more steps to construct its new capital in the desert between Cairo and Suez despite economic difficulties and contractual setbacks.
Having built the infrastructure to most of the city, the government has invited real estate developers to buy plots for its housing communities over an area of 3.5 million sq. metres. The Housing Ministry said they would include 17,000 flats.
“These flats will be built by real estate developers with interest in investing in the new project,” said Khaled Abbas, the assistant Housing minister. “We are giving major discounts on the lands to developers who will apply.”
With discounts of up to 25% on the land, interest in investing in the capital is expected to be high.
Project plans have had a bumpy ride since Egyptian President Abdel Fattah al-Sisi announced them almost two years ago. The Emirati firm that designed it and planned to implement it quickly drew back after financial disagreements with the government.
A Chinese company sought to fill in but was recently declared out of the first phase of the project because it, the government said, exaggerated the price of its works.
Now, local construction companies are working on the project and foreigners are totally out, Sisi said.
Together with the digging of a parallel channel to the Suez Canal, one of the world’s most important maritime passages, the new capital is the economic pride of Sisi’s presidency.
About the size of Singapore and two-thirds the size of Paris, the 700 million-sq.-metre project is to be Egypt’s first smart city. It is to be the centre of government, a new meeting point for bankers, the business and trade hotspot and would contain a quarter designed with the super-affluent in mind.
Many foreign universities will have branches in the new capital as will banks and multinational companies. With a large amount of green space, state-of-the-art entertainment facilities and a modern transport network, the $45 billion project is predicted to be like nothing Egypt has ever seen.
Approximately 35,000 construction workers, engineers and urban planning specialists work day and night on the project, which not that long ago was empty desert.
Since then, buildings have popped up, roads were paved and infrastructure work in some areas is nearly complete.
Almost 70% of the basic infrastructure for the project is done, said Ayman Ismail, board chairman of the Administrative Capital for Urban Development (ACUB), the company founded by the government to oversee implementation of the project.
“Investors showing interest in the project can start their work as of today,” Ismail said.
Sisi’s government has spent close to $1 billion on infrastructure works, an amount of money, he recently said that came from the budget of the military.
Nonetheless, the government said it expected to receive tens of billions of dollars from land sales in the project. Sisi said income generated from the project is expected to more than cover construction costs.
The new city project is strongly connected with Egypt’s plans for the Suez Canal region. After digging a parallel channel to the canal, Sisi said he wanted the banks of the canal to become the Middle East’s largest industrial, logistics and services hub, attracting hundreds of billions of dollars in investments.
Russian and Chinese businesses are constructing their own industrial zones in Suez. They are expected to be followed by other countries and major firms.
The construction of the new capital comes during an unprecedented economic crunch in Egypt. The country had to approach the International Monetary Fund for a $12 billion loan, open multiple lines of credit at African and European banks and donor institutions and significantly slash subsidies given its people.
Economist Ali Lutfi, a former prime minister, said that the project’s moving ahead, despite the financial strains, should give insights into the nature of Egypt’s leaders.
“This is a resourceful leadership that cannot be easily defeated by tough economic conditions,” Lutfi said. “This is why I expect it to move ahead with completing the project to its end, regardless of what might happen.”