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ACUD keen to partner with developers on fixed partnership rate - Daily News Egypt

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ACUD keen to partner with developers on fixed partnership rate

Company denies withdrawing plots of land from any developer

The Administrative Capital for Urban Development (ACUD) company has stressed its keenness to collaborate with serious investors in the New Administrative Capital (NAC) project, said General Manager of ACUD Mohamed Abd El-Latief.

Abd El-Latief added that the company has entered into negotiations with three or four companies in the last period to collaborate in the development of projects with multiple activities. This will take place in the first phase of the NAC project, although no agreement has been reached for different reasons.

Daily News Egypt sat down with Abd El-Latief to learn more about the updates at the NAC, and the company’s strategy in the future.

When will the ACUD completes sales of remaining lands in the NAC’s first phase?

The ACUD intends to complete the sale of the remaining 8,000 feddan in the first phase of the NAC project within a year or a year and a half. After the end of this period, the total area of the first phase, estimated at 40,000 feddan, will be under construction and development.

When will the first phase be fully operational?

Work is underway to complete infrastructure, landscape, roads and transportation works in the city. Consequently, the first phase will be fully operational within three years.

Around 50-60% of the first phase’s utilities of the NAC have been developed, as the size of the infrastructure in the project is large. This will ensure that the project is built as a smart technology city that has been equipped to suit the highest requirements of communications and fifth generation technologies.

When will the ACUD announce the launch of the NAC’s second phase?

The company is currently coordinating with the General Organization for Physical Planning (GOPP) at the Ministry of Housing, Utilities and Urban Communities to agree on the second phase’s master plan before starting infrastructure works for the phase.

Once the masterplan for the phase has been agreed upon, it will be submitted to the ACUD’s board. They will then set the estimated budget for implementation and timeframe for the start and completion of the phase.

However, the ACUD will not rush to adopt the phase’s masterplan, or rush to start the implementation to take into account the good and proper planning of infrastructure in the phase. This will help avoid any obstacles in infrastructure and utilities works.

Accordingly, we will take our time in the planning process, because the size of ​​the second phase is large, about 47,000 feddan, which is equal to the area of ​​four new cities in Egypt, so we must carefully plan and prepare for it.

The priorities of the company in the current period are to complete all utilities for the government district for the transfer of the presidency and ministries, including landscaping and planting in the district.

Three consulting firms, namely Dar Al-Handasah, AAW Consulting Engineers, and the Engineering Consulting Group (ECG) presented their proposals to the ACUD on masterplans for the second and third phases.

Despite partnership attempts between the ACUD and developers from inside Egypt and abroad, no agreement has been reached. Why?

We are ready to partner with serious investors. Indeed, the company has entered into negotiations with three or four companies in the last period to collaborate in the development of projects with multiple activities in the first phase of the NAC project. However, agreement has not been reached for different reasons.

The company made a detailed memorandum to study previous partnership attempts to find out reasons for disagreement, with studying each partnership request separately in case of future partnership requests.

Besides this, the ACUD will provide all facilities to serious developers with regard to partnership in developing lands, provided that the partnership percentage is not less than 50%.

Does the company intend to be listed on the Egyptian Exchange (EGX)?

The ACUD has submitted its papers to the EGX during the past few months to be listed, after a long study period that lasted about four years. The company is awaiting the approval of the EGX board to take advantage of the huge assets owned by our company.

It is not currently proposed to conduct securitization or factoring, meanwhile, initial public offering on the EGX is the closest scenario to take advantage of capabilities and resources of the company.

Some say that the ACUD puts strict restrictions on investment in the NAC. Is this true?

This did not happen, on the contrary, the company provides all facilities to developers, and there is no need to wait for the second phase to provide more facilities and advantages.

Our company has not, and will not, abuse any company developing projects in the New Capital, however, the company requires seriousness and credibility from any party seeking to obtain plots of land in the project, whether through sale or partnership.

Nevertheless, we are not concerned about new companies or entities applying to obtain lands in the project, but we require commitment to pay instalments and seriousness in implementation.

Has the company withdrawn lands from late-stage developers?

Since the beginning of the NAC project, no land has been withdrawn from any developer, and not one company has failed to implement. If this happens, the ACUD takes gradual measures before withdrawing any land from any company that is late in implementation.

The first of these measures is to direct more than one warning to the company after the delay in constructing their projects. The second measure taken by the company is to impose a fine for each week of delay, amounting to EGP 10,000.

If a developer has not fulfilled all these procedures, and there is still a delay in implementation, the final action that our company takes is to withdraw the plot of land from the investor, and put it back up again for serious investors.

Is there random construction or building violations in the NAC?

There is no random building in the city because it is a green, smart, technological city built on the latest technological systems available in the world. So it is self-evident that there are no violations in construction process or in building permits, and if any, there will be no reconciliation in any way.

It is worth mentioning, that there was one company which violated conditions of the building licence in terms of the type of residential units. Accordingly, the ACUD did not accept reconciliation in this event, and ordered the violated company to modify the units again to comply with the conditions of building permits.

What is the price per metre of land for embassies?

The ACUD offers prices of $500 per square metre to embassies and diplomatic bodies in the diplomatic district of the NAC, compared to $400 at the beginning of the offering.

Moreover, there is continuous coordination between the company and the Ministry of Foreign Affairs to achieve the goal of establishing the neighbourhood. It also looks to grant lands to states that seek to allocate a headquarters for their embassies in Egypt within the new administrative capital, through diplomatic meetings to promote the diplomatic district.

The Ministry of Foreign Affairs is participating in studying and receiving contracting requests on lands because it is the body responsible for international relations.

We have received more than 60 official requests to obtain plots of land in preparation for the transfer of all embassies and diplomatic missions from their current headquarters to their new headquarters in the NAC.

How will the company get its dues with the government in exchange for developing and completing the government district?

The ACUD has agreed with the Ministry of Finance to collect the company’s dues in exchange for developing the government neighbourhood. This will be in the form of leasing government buildings to the ministries, provided that our dues are collected from their annual financial allocations that are provided by the Ministry of Finance.

According to this agreement, the Ministry of Finance will be the body responsible for paying the annual rental value for every ministry and government agency in the government district until all dues are paid to the ACUD.

The value of what was spent by our company in the government story is estimated at EGP 50bn, which is the total value of dues that will be collected in the form of annual rent values.

What is the cost of gas utilities in the NAC?

The cost of initiating gas services in the first phase of the NAC recorded EGP 3bn, meanwhile, the cost of the NAC’s central cooling plant valued at EGP 1.5bn.

What is the value of infrastructure works in the communications and information technology sector in the NAC city?

The value of communications and information technology infrastructure in the NAC is approximately EGP 30bn, including internet networks, installing cameras, smart lighting poles, fibre cables and other technological infrastructure works.

When will the company’s headquarters be moved to the NAC?

The ACUD moves its headquarters to the NAC in April, two months before the government’s move.

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