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Government hopes to acquire EGP 3bn in direct foreign investment - Daily News Egypt

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Government hopes to acquire EGP 3bn in direct foreign investment

Settles dispute with United Arab Emirates real estate developer DAMAC and levies large fines

Yahya Hamid Minister of Investment
Yahya Hamid
Minister of Investment

By Muhammad Ayad

Investment Minister Yahya Hamed said that the government is seeking $3bn in direct foreign investments during the 2013-2014 fiscal year.

Hamed added that he had recently secured promises from Ahmed Heikal, president of the board of directors for the investment group Citadel Capital, that the company would pump large amounts of investment into Egypt over the coming months. Hamed further stated that he was currently in negotiations with Nassef Sawirris, President of Orascom Construction Industries, to secure further investment for the country.

Hamed said that he also recently signed an agreement with Saudi investor Fuwaz Al-Hakir to provide funding for a mall in 6th of October City for a price of EGP 840m.

Egypt’s government recently settled its dispute with the United Arab Emirates real estate developer DAMAC over a number of properties throughout the country, after nearly two years of negotiations. New contracts signed between the two parties stipulated that DAMAC pay an additional EGP 145m to reclaim the right to construct its “Park Avenue” real estate project on the Cairo-Alexandria desert road, in addition to forfeiting its ownership share of the Hyde Park real estate development company and passing it to Egypt’s New Urban Communities Authority (NUCA).

Tariq Wafiq, Egypt’s Minister of Housing and Urban Communities, said that during negotiations the government had met all of DAMAC’s demands while still maintaining the integrity of the state and not squandering public money.

President of the Tourism Development Authority Tariq Saad al-Din, who was present at the signing ceremony between DAMAC and the Egyptian government, said his authority would set about redrawing the boundaries for property recently forfeited by DAMAC in the Gulf of Gamsha, which totaled 30 million square meters. The land would once again be opened up for new investment, in the hopes they could secure rates from other companies higher than those paid by DAMAC.

Al-Din noted that DAMAC was set to reclaim $5m in previous payments made for land in the Gulf of Gamsha after administrative fees were deducted and commission fees paid for changes made to terms of purchase for the company’s Park Avenue territories. He added that in order to settle their dispute with Egypt’s government over territory owned in the Gulf of Gamsha, DAMAC paid a total of EGP 130m, in addition to EGP 32m in arrears.

Al-Din said that the company further paid EGP 113m in accrual fees for changes made to the contract terms of the company’s Park Avenue territory, bringing the total amount paid by the company for that particular property to EGP 275m, close to the EGP 300m demanded by the Nazif government in office before the outbreak of the 2011 revolution.

Al-Din further restated that DAMAC had forfeited 100% of its claims to the Hyde Park territory, totaling 4.7 million square meters and valued at EGP 290m, to NUCA.

DAMAC also further dropped two claims recently made to the International Center for the Settlement of Investment Disputes challenging attempts made by the International Criminal Court (ICC) to fine and imprison the company’s president, Hussein Sagwani.

The ICC had previously charged Sagwani with five years in prison and EGP 237.5m in fines for his involvement in the embezzlement of public funds by Soheir Garranah, a previous Egyptian minister of tourism, which occurred during DAMAC’s 2006 purchase of 30 million square meters of property in the Gulf of Gamsha, located in the Red Sea province.

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