: A project by Chinese state companies to help build a new capital for Egypt is back on track after running aground earlier in a dispute over contract terms.
The Egyptian investment and housing ministries have begun talks to finalize an
agreement with Shanghai-listed developer China Fortune Land Development under which the company is to invest up to $20 billion to build an upmarket residential district, an industrial zone, schools, a university and recreational centers in the new capital, along with supporting infrastructure, according to a statement issued by the investment ministry on May 15.
The agreements with China Fortune and China State Construction stalled in December and February respectively as the Chinese and Egyptian sides disagreed over deal terms. The Egyptian Housing Ministry also disagreed with China State Construction’s plans to sub-contract work to local companies.
In a ceremony in Beijing overseen by Chinese President Xi Jinping and Egyptian counterpart Abdel Fattah el-Sisi, the project’s lead advocate, China State Construction pledged to invest $2.7 billion to build the government offices for the new capital during the first three-year phase of the project. China Fortune’s portion was designated to be the second of the three phases.
Officials estimate the final agreement could be reached by year-end, with construction beginning the following month.
China Fortune and fellow state company China State Construction Engineering signed preliminary agreements with Egyptian authorities in early 2016 to develop parts of the as-yet unnamed city about 60km east of Cairo. Egypt had previously sought to develop the project with Dubai real estate company Emaar Properties.