CAIRO: An Egyptian court on Tuesday postponed till next month hearing a legal row over a Talaat Moustafa (TMG) land contract, a case analysts say could slow property investment as long as it remains unresolved.
TMG, Egypt’s biggest listed developer, has been mired in the row over its Madinaty project, in the suburbs of Cairo, since a court ruled that the contract was illegal because the land was allocated by direct sale not by public auction.
The government has said it will uphold the ruling and cancel that deal but said it had the right to draw up a new contract selling the land back to the firm because it was in the public interest. The latest suit challenges that government decision.
Analysts say investment in property development could fall and the pace of construction slow in similar out of town projects, which contributed to solid economic growth of 5.1 percent in the financial year that ended in June.
The court set Nov. 9 for hearing the TMG suit.
The case has prompted more than one copycat suit, including one challenging a state land deal with Palm Hills Development, Egypt’s second biggest listed developer. The court also postponed till Nov. 9 the hearing in the Palm Hills case.
The cases hinge on conflicting laws governing state land deals. The original court ruling said a Housing Ministry body sold land to TMG in violation of a 1998 law. The government said it was following legislation that preceded the 1998 law.
The cabinet’s response to the TMG case has calmed some jitters but investors still want a long-term solution unifying laws governing land allocation, which will require a new law.
But pushing through legislation has been delayed by parliamentary elections looming on Nov. 28.
The cabinet has already drafted a new legal framework for state land deals that aims to ease investment, oversee sale and use of state land, and remove disputes between state bodies over land deals, the spokesman said last week.
The new legislation is not expected to be challenged by the new parliament, which convenes for its first session on Dec. 13.
TMG shares were trading down 0.7 percent and Palm Hills had dipped 0.3 percent by 1126 GMT. The benchmark index .EGX30 was trading 0.5 percent down.