Egypt will not change terms for a new contract for Talaat Moustafa’s flagship Madinaty project and will take 7 percent of the project’s completed housing units, as in the original deal, a newspaper reported.
"There will be no change in the contract terms, the state will get a 7 percent compensation for (areas) built-up on," Egyptian Housing Minister Ahmed El-Maghrabi was quoted as saying by Al-Ahram published on Tuesday.
"The financial compensation for the Madinaty land is more than fair. The land was priced in accordance with prices in 2004, 2005, and 2006 at LE 297 a meter," Maghrabi said.
The firm also published a note in Al-Ahram saying the project had incurred additional costs from connecting the development to the electricity and water grids.
It said this meant that although 7 percent of the built-up area would be offered to the government, the extra infrastructure costs associated with the development, meant the government was receiving a bigger percentage of the project’s value, equivalent to about 16 percent of the built-up area.
Egypt’s cabinet said on Sunday it would scrap the original contract for TMG’s estimated $3 billion Madinaty project after a court ruled the deal was illegal, but would reallocate the same land to the firm in a new contract.
The cabinet said any new contract must not value the land at less than LE 9.98 billion ($1.75 billion), but had not specified whether it would keep the 7 percent rate.