Housing investment is about more than just Arabtec

29 June 2015

The government is making progress with a scheme to build 1 million homes for low-income families

The scheme is entirely separate from a heavily promoted scheme involving the UAE’s Arabtec, the fate of which remains subject to speculation.

Handover in 2015

In the final quarter of 2015, the Urban Communities Authority plans to hand over 83,000 residences to low-income families in the culmination of the first and second phases of a project to build 1 million homes.

Meanwhile, the authority has invited 40 local companies to bid for a fresh phase in the scheme, involving the construction of 60,000 units at an estimated cost of £E9bn ($1.2bn), in residential zones around new industrial cities outside Cairo, as well as in Damietta, on the northeast coast, and Sohag in Middle Egypt.

This programme has attracted less publicity than another 1 million-home scheme announced in early 2014 by Arabtec and Abdul Fattah el-Sisi, in his capacity as defence minister before his election as president. It has also received an important financial boost in the form of a $500m loan approved by the World Bank on 5 May to support the government’s Social Housing Fund.

The 60,000-home tender is part of a programme launched at the start of 2014. The work is being offered to selected groups of contractors from a long list of more than 200 firms. The companies invited to bid for parts of the new phase include Arab Contractors, Mahmoudiya Contracting, Al-Madain, Shams Contracting, ASEC and Giza General Contracting.

Housing shortage

The World Bank estimates that Egypt needs 300,000 homes a year to accommodate newly formed households, as well as about 250,000 homes to meet a backlog built up over the past five years. The number of people living in informal housing as a result of inadequate supply and low incomes is estimated to have reached 12-20 million.

The Arabtec project was presented as being aimed at both low-income and middle-income families. In October 2014, Arabtec said that agreement was close on the terms for the first phase, entailing the construction of 100,000 units in the Badr City and Obour satellite towns outside Cairo.

At the start of April, Arabtec said it was pleased to confirm media reports that the Egyptian cabinet had approved the scheme, and later that month said it was talking with banks about financing. Yet the first-phase contract has yet to be signed.

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