Mushael Al-Malek: the Egyptian- Kuwaiti company file is displayed to the political leadership to build a comprehensive sophisticated city.
The new city includes residential, investment, tourist, commercial and industrial sectors keeping up with the latest global systems.
The company project will provide a quarter of a million permanent job opportunities for young people and accommodate two million inhabitants in next February as a deadline to the international arbitration for resolving the issue, and the indemnifications are estimated at $15 billion.
All lands of the project are desert not planted so they are turned by the decision of the government to a real estate project.
Interviewed by- Ahmed Al-Mamlouk:
A huge investment project for a Kuwaiti-Egyptian company that was disabled for 12 years because of the inability to make a decision and ending the binding problems with investors for transferring the negative image about investment in Egypt to a positive, stimulating and supportive image for the Kuwaiti and GCC investors. And after the visit of President of the Arab Republic of Egypt, Abdel Fattah Al-Sisi, the signs of hope and optimism started to appear on the faces of Kuwaiti businessmen and investors hoping to end their suffering related to investments in Egypt with a decisive and rapid resolution realizing the implications and effects of disabling the investment in any country whether near or far.
“Al-Seyassah” journal addresses one of the most important projects which witnessed a case of ups and downs from the public speakers towards the company being run by foreign investments, and it is found that the project ensures the establishment of (a comprehensive urban gathering) over an area of 26, 000 acres covering various integrated aspects, services, and sectors including distinguished residential; investment and commercial sectors as well as a financial center, international airport, tourist and recreational projects, commercial markets and malls, schools, institutes, universities and therapeutic services through the establishment of global health centers alongside with the establishment of a free-style tower similar to Burj Khalifa and the Kingdom Tower. The construction of the city also aims to relieve the traffic pressure in Great Cairo into the south direction not exceeding 60 km in a proactive bold and vital investment step in the expansion creating an image of an integrated city.
It is amazing that the project is reflected positively on the labor market there as this urban gathering accommodates 2 million persons and offers a quarter of a million permanent job opportunities for young people and about one million job opportunities during its construction stages, and its total investments are nearly 400 billion Egyptian pounds. In addition, the design of the concerned project city has the world modern style to be a haven and destination for those wishing to enter the Egyptian market, and despite all of aforementioned, the project remained a controversial subject in Egypt.
Since 2008 and until today, no decision has been issued to initiate the implementation of the project that is planned to be completed in an area near the city of Al-Ayat located in South Giza with Egyptian -Gulf and global investments and partnership that can cause damages to more than 20 companies with stocks in the Egyptian Kuwaiti Company if the file is not resolved quickly.
To shed light and highlight more details, we met (Sheik Musheal Malek Abdul Aziz Al-Sabbah) who is one of the senior owners of the International Holding projects Group that is one of the largest stockholders of the Egyptian Kuwaiti Development and Investment Co. and the project owner looking for a light in a convoy of offered construction and reconstruction projects in Egypt, and the following is the last updates about the project:
Sheikh Mushael Malek Abdul Aziz Al Sabbah, as a start- what are the last updates about the company project that was disabled in Egypt years ago?
The company project has been disabled for more than 12 years due to speculations and murmurs by those who don’t want the good and prosperity to Egypt, and if this project is approved according to the strategies planned to it, it would be a role model for the investment that is befitting Egypt’s history and civilization, but unfortunately the project remained subject to the public speakers and those who don’t want to serve the nation and have tendentious objectives that we do not know their dimensions and effect on the company and project by one hand and on Egypt by the other aiming to disable the creation of projects that help to build the Egyptian economy and provide job opportunities to thousands of young people.
There is no doubt that such forms of standard projects which keep pace with the global development will transform the destination of foreign investors to Egypt, while those who stood against this investor, stood against the growth of investment and against the attraction of capitals flowing into the Egyptian economy.
Describe the components of the project and the challenges encountered in its implementation?
The project is based on an area of 26, 000 acres that are contracted for in 2002 to set up an agricultural project and stopped as a result of the failure of the state to provide water duty according to the contract made with the state, and then the decision of the Cabinet in 2008 was issued to develop urban gathering in the North of Upper Egypt at the desire of Egyptian Government , and since that time the bidders; public speakers and haters to their countries began to stand against implementing the project, so the controversy on the project implementation remained a challenge to it until the revolution of 25 January 2011.
And what is the added value achieved to the Egyptian economy after the completion of the project, and what the actual investment benefit for investors?
The project is based on the investment of about 400 billion Egyptian pounds during its time stages to create a residential, commercial, financial, tourist, recreational, educational and health city accommodating 2 million inhabitants, and it is a pivotal social monument for three near governorates adjacent to Cairo that are Giza; Beni suef and Fayoum. That will be done by creating a quarter of a million permanent job opportunities with accommodation of one million job opportunities during the stage of project accomplishment as well as it contributes to solving the problem of immigration to Cairo, and the problem of traffic in Cairo due to the concentration of services there.
A city like Dubai.
Do you mean that the project will provide services that limit the centralization of Great Cairo?
Of course, the project was designed to create a city like Dubai in terms of facilities, services and entertainment; and the study has been developed so that the city will be classified to sectors: “residential, investment, tourist; commercial; industrial and recreational, health, educational, services” that are sectors contributing to attract the investors to Great Cairo for the presence of a distinguished international airport, the largest financial center and huge commercial malls that provide together trade and investment services and services for businessmen.
The project also includes a group of schools, institutes and universities that are all connected to a sophisticated and modern traffic network through a sophisticated and modern road network linked by railway lines the thing that reflects the actual investment feasibility which is added to development of the State’s financial resources through the achievements of these projects including proceeds and operational feasibility for diverse sectors such as health, education, tourism, transport, trade and investment that all represent an added value aiming to open prospects of foreign investment in Egypt, as the Egyptian-Kuwaiti company subsumes 20 other companies with stocks in the project that are all affected because the execution was disabled by the Egyptian Government, however and after all its patience it is going to be at the forefront of companies investing in Egypt, but that requires the trust and support of the current political leadership in Egypt to end the problems and challenges faced by companies investing in Egypt.
Are you optimistic about completing the project which witnessed a state of ups and downs and controversies in all Egyptian popular, executive and legislative communities?
We are optimistic to complete the project because those in charge of Egypt at the present time are working for Egypt and not for special interests and purposes that hinder the economic growth of the state and seek to sabotage its efforts to attract Gulf and Arab investors to Egypt, so I expect that President Abdel Fattah Al- Sisi and his government have begun to put their energies to resolve dilemmas outstanding for Kuwaiti investments in Egypt and accelerate the achievement to move the economy of the state in such large – scale projects that benefit the Egyptian people before the investors themselves. From this point of view, we applaud the efforts of the current president and the government for promoting the economic file of the state and we hope that the company dilemma will be resolved to begin its steps towards implementing the giant project, which will reflect positively on establishing confidence bases for the Kuwaiti and Gulf investor as well as all Arab and foreign investors desiring to invest in Egypt by ending all disputes with companies.
Do you put all your files and problems to the responsibility of the Arab Republic of Egypt president, and do you see that the government will be unable to take a decisive decision in this regard?
President Abdel Fattah Al- Sisi raised the slogan of “attracting investors”, a decision that the government should work hard to implement it , and the hopes pinned on the president’s decisions to resolve the outstanding dilemmas and pay investment wheel forward by moving the stagnant water and removing those who hinder investment wheel from the state progress in the implementation of its developmental plans and programs especially since the old and the new Egyptian constitution and law recognize the guarantees and legislations protecting the foreign investments in Egypt.
But it is said that the project is in its start involved investing 26 thousand acres for agriculture and agricultural production, and then turned into a residential project which has aroused much fanfare at the time, what is the truth of the matter? Initially, the company contracted with the government in 2001 that the project is an agricultural development project, and the state sold the acre to the company at that time with the highest price in a value of 200 pounds per an acre, and with the company’s claim to obtain the water share for irrigation and agriculture, the government failed to provide the water duty for the project until the National Center for Planning State Land Use subordinated to the Council of Ministers in Egypt suggested to transform the land from farming to an urban project, and accordingly; a decision of the Prime Minister in 2008 was issued to develop urban community in North of Upper Egypt in 40 thousand acres including the company lands and neighboring lands according to the economic survey presented by the company at that time, and the company agreed to pay the difference of activity transformation according to the prices prevailing at the time. The company has prepared a complete design for the project as a vital sophisticated area including an international airport as I’ve mentioned.
Since 2008 until today, the company failed to reach a solution with the government to set a price of the land or to start implementing the project because of the ambitions that tried to hinder the company project as a greed in it and exposed the government to embarrassment with foreign investors. The company remained waiting for a republic decision with launching the development wheel in this huge project but did not reach a positive outcome.
It’s reported that the company entered new negotiations over the past few years, what are their results?
The company resumed negotiations with successive governments after the revolution but with the presence of shaky hands and the issuance of rules against ministers, prime ministers and senior leaders in Egypt following the revolution resulted in the fear of everyone to take decisions, the project stopped up to date with the implications of disabling investment in Egypt. If there were penalties for disrupting investment just as those applied to who overcome and violate the state right, the case of investment projects in Egypt would not be in this painful situation.
The prevailing view is that the person who disables is the person far from punishment and that the person who decides and implements projects is the one who exposes himself to accountability, so the disruption and avoiding making decisions is the way to escape from punishment in the eyes of decision makers, and the result is the destruction and disruption of the Egyptian economy during the past few years that has not happened since the 1952 revolution , but there are still hopes to solve the problem in a positive way.
You talked about converting the project from an agrarian to an urban project under an Egyptian government resolution, do you mean that the 26.000 acres are desert land not planted before?
Yes. The whole area has not been planted and is a barren desert where neither transplant nor water is there. The ousted president had talked about the project that it was fallowed meaning agriculturally damaged and it is to be transformed into a real estate project the thing that is untrue as the concept of land fallowing is meant by the planted lands, but these lands are desert, so the ousted president, Mohamed Morsi added to the fallacies a lot of faults the thing that any president or governor should not speak about unreasonably as this damages the Egyptian economy and investments directed to this honest country.
We heard that there were attempts by the company to resort to international arbitration and claim damages, what is the truth of that?
There are a trend and consensus of the joint stock companies in the project to resort to the international arbitration after they despaired of having a solution, and for preventing embarrassment for decision makers in Egypt, they put estimates for claiming damages up to $15 billion on their dividends and damages it occurred as a result of the project interruption and failure of implementation. It is known that resorting to the international arbitration gives the country a term of 6 months (ending in February 2015) naming the amicable settlement period, and in case where the company did not reach a terminal and accepted resolution for the project, it will proceed its way in the international arbitration for compensating the company for its losses according to the fair format coinciding with the economic development of the country and its attempts to attract the Kuwaiti, Gulf and Arab investors.
Where is the company file now in Egypt, and who are the leaders that can take a decision regarding this project that faced a wide- scale controversy in the Egyptian communities in the past?
The file is now displayed -as far we know- to the political leadership in the state, Abdel Fattah Al-Sisi, and we hope that his Highness will finish this file positively and issue a decision in favor of investors and the state particularly as when the company resorted to the arbitration, it revealed the intentions of Egyptian officials who don’t want the good for Egypt or its peoples, so we believe that arbitration is not the solution to the conflict as far as we see that project implementation will positively benefit all sides first of which is the Egyptian society, and also for demonstrating to the political leadership that Egypt is a state of institutions, law, and constitution and no right of any person will waste as well as there is no field of bids to the national interest and that Egypt can attract investment with its promising opportunities.
14 years of suffering.
The International Holding Project Group and its subsidiaries primarily MENA Holding Co. seeks to implement many real estate, architectural, constructional and industrial projects in Egypt to take advantage of the many opportunities offered by the Egyptian economy to Arab investment in various sectors with the desire of its founders and shareholders to maximize foreign investments, chiefly the Egyptian market.
The International Holding Project Group has an influent share in the Egyptian Kuwaiti Development and Investment Co. intending to establish an urban city with a space of 151 million square meters (the project contains residential buildings, villas, and mansions in addition to business segments including markets, shops, media production city, commercial banks, schools, universities, medical centers and hospitals) and the project also is near the city of Cairo and there is a modern road network for the project that is up to six main roads and four subsidiary roads in addition to the possibility of using the rail near the site.
Moreover, some subsidiaries of the International Holding Project Group own spaces in the project such as the International Real Estate Project Group and International Storage Group which gripped a part of these companies’ shares.
The responsible in Egyptian Kuwaiti Company resort to the international arbitration occurred after investors found that there was unjustified and disruptive “lack of seriousness” of the successive governments to resolve the fate of their investments in Al-Ayat land project.
This comes in light of the company request from the Egyptian government to provide it with water as has been agreed upon in order to cultivate the land or agree to convert it to the urban use with the company obligation to pay the fair value equaling the fees of transfer from agricultural to real estate. The facts of the case go back to 2002 when the Egyptian government approved the decision of the former President Hosni Mubarak on titling this land to the Egyptian-Kuwaiti Development and Investment Co. for the agricultural use at a price of 200 pounds per acre. Kuwaiti investors own 90% of the Egyptian-Kuwaiti Development and Investment Co.
The company says that the price it paid for the land at that time was the highest price compared to similar contracts and that it possessed the land by a presidential decision and the Cabinet approval after paying the full price. According to the Kuwaiti narration, the company was unable to cultivate the land because the Egyptian government has not provided it with water as it was also agreed that the National Center for State land Use in Egypt recommended in 2007 to transfer the land to urban uses the thing that was approved by the government before the 2011 revolution, but no presidential decision for that was issued. In March of that year, it is decided to terminate the land contract in addition to the refusal of company request of transferring its activity from agricultural to urban.
It is certainly that after passing “14 years of suffering” from committee to another, and from minister to minister; the corporate leaders aimed to establish a project at any point desired by Egyptian government, and despite the flexibility of the company owners to determine a unified command to start the project, the company did not lose hope that there are loyal persons to their Egyptian homeland who will put all their attention in solving all the problems of the Gulf and Arab investors and to enhance investment in a large market like the Egyptian one.