- The $20 billion project intended to develop over 15,000 acres over a 25-year period in a new capital, located east of Cairo.
- The project’s first phase was scheduled to reach completion by the middle of 2019.
Discussions between the Government of Egypt and Chinese real estate developer, China Fortune Land Development Co., Ltd. (CFLD) for the development of Egypt’s new administrative capital have reportedly fallen through.
Reports cite, the $20 billion project, whose first phase was scheduled to reach completion by the middle of 2019, fell apart after there were disagreements over how the revenue assigned to the project would be shared.
According to a report by The Business Times, the two years’ worth of exhaustive negotiations came to a grinding halt after authorities from the Egyptian government responded to the final offer proposed by the real estate developer.
Ahmed Zaki Abdeen, head of the company that was created to oversee the project’s construction activities, stated that the firm did not get a response from the Egyptian authorities. Abdeen further exclusively stated that the discussions have stopped altogether.
The failure to reach a common agreement would reportedly be raising numerous questions over the Egyptian government’s ability to draw in critical FDI (Foreign Direct Investment) to drive the nation’s economic growth. However, this setback may not affect state-owned Chinese firms from investing in opportunities inside the country, primarily because of a strong relationship between the two governments.
Reportedly, CFLD international, as well as CFLD Egypt, have not made an official announcement pertaining to the matter.
The Deputy Minister of Housing & Urban Communities, Khaled Abbas stated that the government could work alongside CFLD on other developments, but not the new administrative capital.
According to reports, the reason for the failure of the discussion is that Egypt wanted approximately 40% of the $20 billion project’s revenue while the real estate company offered only 33%.