New cities’ facilities may be offered to investors in B.O.T.

CAIRO - 2 October 2019: The New Urban Areas Authority revealed considerations of offering power stations, water treatment and water recycling plants in new cities for private investors in B.O.T. system set to last for 25 years.

Deputy Chairman of the authority Abdel Moteleb Emara said in a meeting with real estate developers on Tuesday that the reason behind such considerations is the large size of utilities needed.

However, the official affirmed that all utility projects in new cities are are not behind schedule and that the upgrading of water plants in existing cities will conclude in three months at a cost of LE1.5 billion.

In the meeting, the developers presented the difficulties they face while working in new cities, including the state’s delay in delivering utilities. Such delay constitutes a burden that is added to the high prices of land and building materials causing a hike in residential units’ prices. As a result of not introducing facilities, customers abstain from paying the installments on time.

Developers urged setting a mechanism for land offerings so that their prices match the demand highlighting that residential units whose prices vary between LE1.5 million and LE2 million increased without being driven by any market need. That is why real estate sales slowed in the second quarter of 2018 as the units offered target a saturated market segment and do not match the financial status of the majority of citizens.

The developers pointed out that the price of the land constitutes around 50 percent of each unit’s price urging that the land pricing mechanism takes into consideration other capital costs so that the units’ prices match consumers’ purchasing power.

The other problems include the delay in land registration for up to one year, the phenomenon of turning residential units in ground floors into commercial units, the delay in finishing utilities on time, and the vague plan of water networks renovation. The developers also demanded the establishment of water recycling projects that can serve in watering the gardens and cleaning.

They finally underlined the necessity to build units that fulfill the housing needs of all social categories. Hence, the official affirmed that the authority studies not designating specific residential densities and just designate the percentage of built areas.