By Mohamed Darweesh
The Ministry of Housing has agreed to grant UAE’s Arabtec Construction Company land to carry out a project to construct 1m housing units, in exchange for real estate housing units and public service buildings being granted to the New Urban Communities Authority (NUCA).
The company will establish a group of companies that will be responsible for signing the contracts until the start of phase one of the project, in which 120,000 units will be built in three new cities.
Housing Minister Mostafa Madbouly announced Monday that the project will encourage investment so that similar projects may be executed under the auspices of the Ministry of Housing and NUCA.
Assistant to the Minister of Housing for Technical Affairs Khaled Abbas said an agreement has been reached for the basics of implementing phase one of the project, which entails the construction of 120,000 units and associated services in three locations: El Obour City, Badr City, and New Minya City.
Abbas added that the company will only sell housing units and not undeveloped land, but NUCA must hand over public services buildings and transfer land property to the relevant parties. A permanent committee will be established by NUCA and the company to follow up on the project according to the time frame and propose any solutions to obstacles faced while the project is implemented.
Arabtec officials confirmed that the company is in the last phase of forming an agreement with the Ministry of Housing, as a final formulation for the contract must be agreed upon work on the project begins and final contracts are signed.
Arabtec Chairman Khadem al-Qubaisi stated that the company has undergone a series of negotiations and intense meetings recently and is putting forth great efforts to begin phase one of the project by the end of this year.
On Monday, Al-Borsa reportedthat the Ministry of Housing and Arabtec Construction Company signed a letter of intent to agree on the basic details of establishing the project and postponing points of disagreements to be discussed a further meeting that will be held within two weeks before the final agreement is signed.
Sources explained that the two parties agreed to delay setting real estate quotas for project units until the next meeting due to the company’s disagreement on initial estimations of 20-25% of the number of units for some cities. The contract will set the real estate quota according to the land price in each city. Sources also added that Arabtec is now working to found both the company that will carry out the project as well as the companies that will operate services like schools and hospitals, and the associated legal procedures have been commissioned to the Baker and McKenzie law firm.
The letter of intent stipulated that funding be completely foreign and that construction equipment be purchased as much as possible from the Egyptian market, which will allow the company to import a portion of its demands from abroad in order to guarantee continuity of implementation in the event that the Egyptian market fails to provide the necessary equipment.