Housing Minister Mostafa Madboly said that his ministry is committed to support the real estate sector through providing large and medium-sized areas of land with basic facilities.
He added that the ministry seeks to attract foreign investment, especially from Arab countries, to participate in the establishment of new real estate projects, including the New Administrative Capital, New El Alamein City, and East Port Said City.
Madboly pointed out that the New Administrative Capital is a development project that aims to create an integrated working environment with high-quality infrastructure. The project aims to attract foreign capital and global companies to invest in the new city, and ease the population density in Cairo caused by the movement of workers between ministries and government agencies. Hence, Cairo will become the cultural and historical capital of the country and a tourist destination.
The minister said that the New Administrative Capital will include various ministries and the cabinet headquarters, as well as a diplomatic district for embassies, companies, major international institutions, and centres for finance and business entities, exhibitions, a residential area, technology parks, universities, and major hotels.
The first phase of the New Administrative Capital will be built on an area of 12,000 acres, with estimated investments of about EGP 60bn. The management company of the project was established with paid up capital of EGP 6bn, equally provided by the armed forces and New Urban Communities Authority.
Madboly said that four construction companies are carrying out the facilities of the first phase on an area of 12,000 acres, including Arab Contractors, Mukhtar Ibrahim, Concord, and the Alliance of Hassan Allam Sons and Orascom.
The residential area is scheduled to be built on an area of 1,000 acres, including about 30,000 residential units, whose spaces range between 110 and 180 sqm. There are two areas for villas and townhouses; the first includes 190 villas and 71 townhouses, while the second includes 139 villas and 50 townhouses.
He announced that the ministry will launch the second phase of partnership projects between the New Urban Communities Authority and real estate developers which includes eight pieces of land in Sheikh Zayed, 6th of October City, New Damietta, and New Aswan, on a total area of 2,855 acres.
He pointed out that the ministry has succeeded in signing four final contracts with Egyptian and Arab companies to establish real estate projects on a total area of about 2,000 acres, with investments of EGP 131bn. He added that one of these projects has already begun, while the other three projects still wait for some ministerial procedures.
Madboly explained that the new real estate regulations of the New Urban Communities Authority imply clear measures of offering land and contracts, which preserve the state’s right in dealing with only serious investors.
He added that the Ministry of Housing began to pay the price differences for the contractors according to the contracts, noting that the draft compensation law for contractors is currently being discussed in the parliament.
He said that the government has approved the requests of construction companies which were affected by the shift in the exchange rate and the value-added tax, as the construction sector provides a large number of jobs.
The cabinet has approved the bill compensating construction companies following recent economic decisions, including the liberalisation of the local currency’s exchange rate and the increase in prices of petroleum products.
Madboly pointed out that the law would allow compensation for contractors through a committee, which will be led by the minister and have members of the ministries of defence, finance, planning, electricity, and transportation, the New Administrative Control Authority, chairperson of the Federation of Contractors, and head of the Central Agency for Public Mobilization and Statistics (CAPMAS).
He said that the committee would complete the necessary measures for compensation within the next month to achieve balance in the contracts that were affected by the recent decisions from early March until the end of December 2016.
The law stipulates that compensation will be limited to existing contracts since March 2016 and abolish any incompatible provisions or laws. A higher committee for compensation will be formed and its permanent headquarters would be at the Ministry of Housing. Each contract will be examined separately, according to the criteria specified by the committee. These controls will take into consideration the difference in the volume of business in each contract, in addition to the project’s accomplishments and the current volume of business. The committee will also be looking at the date in which the contracts were signed, whether it was before or after the flotation of the Egyptian pound.
The compensation committee would present a report to the cabinet for approval every three months. The committee would issue the executive regulations of the law within a month of its approval and issuance.