Chinese company signs US$20 bn agreement to build new administrative capital
Courtesy: China Fortune Land Development Company's website
 

The Egyptian government has signed a US$20 billion agreement with the Beijing-based China Fortune Land Development Company (CFLD) to construct the second and third phases of the new administrative capital, work on which is due to commence after June 2018, when the first phase of the megaproject is scheduled to be finished.

Prime Minister Sherif Ismail presided over the signing of the agreement between the ministries of housing and investment and the CFLD, according to the state-owned Al-Ahram news portal. The ministers reportedly claimed that the agreement would attract $15 billion in direct foreign investment.

Housing Minister Mostafa Madbuly is cited in Al-Ahram as stating that his ministry would provide land for the project that is zoned for commercial, recreational, residential and industrial purposes. The Investment Ministry will reportedly facilitate the provision of all necessary state licensing to ensure that the CFLD can operate effectively.

However, there has been no direct comment on the mechanism by which land or licenses will be allocated. Al-Ahram claims to cite a Cabinet-issued document pertaining to the agreement, but none of the government bodies’ websites or that of the CFLD contains any information on the deal.

President Abdel Fattah al-Sisi’s government announced its plans for the construction of the Egyptian state’s new administrative center in early 2015, estimating that the three phases of the megaproject would cost a total of $45 billion.

In initial talks, the government planned to partner with the Abu Dhabi-based Capital Partners Company. However, the partnership fell apart, and the Egyptian state subsequently turned to the China State Construction Engineering Corporation (CSCEC), which has now been replaced by the CFLD.

The second phase of the new administrative center – situated just east of the Greater Cairo metropolis – has been projected to be completed by June 2020, with work on the third and final phase coming to a close in 2022. According to the project’s ambitious blueprints, the completed city will occupy 700 square kilometers.

Plans for the state’s megaproject will include accommodation for around 5 million employees and residents –highlighted by a city center population of 250,000 and 21 residential districts – along with 490 square kilometers available for residential and commercial development, 91 square kilometers for energy farms, 16 square kilometers for the construction of a new airport and 4 square kilometers for a theme park.

The state has also claimed that the new administrative capital will be furnished with 40,000 hotel rooms, 1250 religious buildings, 700 kindergartens and a central business district that will occupy a space of 5.6 square kilometers. On the project’s official website of the project, the planners describe it as both a “sustainable” urban center and a “smart city.”

A replica of the Eiffel Tower was also initially slated to be built, along with skyscrapers and a massive obelisk similar to the Washington Monument.

In late 2014, Sisi, who was the minister of defense and the deputy prime minister, trumpeted the beginning of an ambitious mass housing project, to be implemented with the partnership of the Dubai-based Arabtec firm. It was proclaimed that the project would facilitate the construction of 1 million housing units by 2020. However, work on the megaproject has largely been scaled back due to budgetary complications. To date, only a fraction of the proposed housing units are expected to be completed.

In a recent interview, Arabtec’s CEO Raja Ghanma states that the estimated number of housing unites has been scaled back to just 100,000 units.

In October 2015, Arabtec proposed to “start off with 13,000 units,” according to Ghanma. “We set certain criteria and requirements,” he said. “There has been no confirmation of support from Egypt’s Housing Ministry. We haven’t heard from them since.”

“Nobody is talking about a million unit project,” Ghanma concluded, addressing the project’s current state.

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