Arabtec-Egypt deal likely to go ahead with the Egyptians imposing new conditions
- Dispute around terms of the deal
- Arabtec expected to compromise its position
The UAEs Arabtec Holding and the Egyptian Armed Forces are likely to go ahead with the 1 million homes project, despite on-going disputes between the two parties.
A number of 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 that the UAE firm will accept the renewed conditions put forward by Egypt.
On 25 May, MEED reported 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.
In March 2015, 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.
The dispute has coincided with Arabtec recording a decline in first quarter profits, its second quarterly decline in a row. The company confirmed first quarter losses of AED278.9m ($76m), compared to a net profit of AED137.9m in the same period last year.
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