The UAE’s Arabtec Holding has released a statement on the Dubai Financial Market saying negotiations with Egypt’s Ministry of Housing for the 1 million homes project have not broken down.

The statement said: “The company reaffirms that it’s still discussing some related details with concerned Egyptian parties.”

A spokesperson from Arabtec has told MEED that negotiations are ongoing with no deadline set.

In March, MEED reported a disagreement between Egypt and Arabtec over financing, with the military requesting Arabtec to finance the project through foreign investments rather than funds raised through local banks.

Several sources close to the project have told MEED that while the deal is likely to go ahead, Arabtec will be expected to compromise. It is anticipated the UAE firm will accept the renewed conditions put forward by Egypt.

On 25 May, MEED reported that a breakdown in the relationship was caused by Egypt looking to renegotiate some of the terms of the deal.

It is understood the military and housing ministry 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.

The Ministry of Housing refused to comment on the status of the project.

Arabtec and Egypt have been negotiating the terms of this project since 2014, when the initial memorandum of understanding was signed. The housing project would see Arabtec subsidiaries developing and constructing 1 million housing units in 13 locations across the country. The overall development value is expected to be £E280bn ($40bn).