Fresh reports coming out of Egypt that the memorandum of understanding (MoU) between the government and Mohamed Alabbars Capital City Partnerships has been cancelled raises further concerns regarding Egypts ability to press ahead with projects announced during the investment conference in March this year.
The dispute between the two parties is understood to be about the funding of the first phase. The authorities are looking for full foreign funding rather than dependence on cash-strapped local banks.
While the reports are unconfirmed, earlier this month a source close to the project told MEED the scheme is set to face delays following several issues between the two parties.
The problem for the Egyptians is this sends out yet another warning sign about its inability to implement some of the grand projects it has promised.
A similar dispute came up earlier this year with the UAEs Arabtec Holding regarding the implementation of the 1 million home project. The same issue keeps coming up for the Egyptians. Foreign investors are reluctant to fully fund projects through foreign capital, while the authorities do not want local institutions involved.
The governments strong stance with Arabtec has so far not proved detrimental to the project, but a continued battle with foreign investors will set a precedent that may not work in the countrys favour.
Sources close to the Housing, Utilities & Urban Development Ministry have told MEED the Capital City project is set to go ahead, even if the government must look for a new investor. But if Egypt is unable to press ahead in partnership with the regions most-established realtor in Mohamed Alabbar, it is difficult to imagine where they will find the foreign support it is looking for.
For now it remains unclear, but as news of funding disputes continue to cloud Egypts real estate projects, it raises questions over the countrys ability to implement its ambitious plans.