One million home project in doubt amid claims of a breakdown between the two parties
- Arabtecs Egypt housing deal could breakdown
- Armed Forces looking to renegotiate some of the terms of the deal
The UAEs Arabtec Holding and the Egyptian Armed Forces are reported to be locked in dispute over the terms of the one million homes project in Egypt.
Local media has reported that the contract between the two parties has been terminated despite Egypts Minister of Housing saying that the project is not under threat at a construction conference in Cairo on 25 May.
Sources close to the project have also told MEED that a breakdown in the relationship has been caused by the Armed Forces looking to renegotiate some of the terms of the deal.
It is understood that the military may want Arabtec to use only local materials for the entire project as well as use an external auditor to monitor compliance with a new profit cap.
MEED contacted Arabtec on 25 May but the firm did not offer a comment on these latest developments.
In March 2015 MEED reported a disagreement between Egypt and Arabtec over the financing with the military requesting Arabtec to finance the project through foreign investments rather than funds raised through local banks.
This also comes at a time when the UAE firm recorded a decline in profits from the first quarter of 2015 for a second quarter running.
The company confirmed first quarter losses of AED278.9m ($76m), compared to a net profit of AED137.9m in the same period last year.
The housing project, which was announced in 2014, would see Arabtec subsidiaries developing and constructing 1 million housing units in 13 locations across Egypt. The overall development value is expected to be £E280bn ($40bn).
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