Dubai contractor battles against disbelief both in the media and the markets by confirming concrete progress on one million house project
Dubai construction firm Arabtec has revealed that it is close to completing the planning and design stage of a $40bn deal to build one million homes in Egypt, after analysts questioned whether it is feasible for the contractor to recruit the manpower to execute the project.
Arabtec agreed to carry out the housing scheme with the Egyptian army in March, with a plan to target 13 locations around the country on land provided free by the armed forces. Construction was expected this quarter, with delivery running from early 2017 until 2020. The project will commence immediately after the finalisation of the nearly complete planning and design stages.
However, few details of the scheme have been disclosed, and given the sheer scale of the project compared with the contractor’s existing operations in Egypt and the review of the firm’s operations following the resignation of CEO Hasan Ismaik in June, doubts had been raised over the deal.
In particular, analysts had questioned how the firm could possibly implement the Egyptian project without large-scale subcontracting or the hiring of thousands of additional staff.
Nonetheless, the most recent statement from Arabtec said that the company “will commence the project immediately after the finalisation of the planning and design stages which have been nearly completed after achieving significant progress in this regard.” Related article Enormous gas field discovered off Egyptian coast
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It added that the Dubai contractor had made “positive progress” in its discussions with the concerned authorities in Egypt, and would “commence the project as soon as possible”.
The project is also expected to reflect positively on the value of the company’s shares, which have recently suffered asa a result of uncertainty in the Russian market, where Arabtec had been lining up deals including a $1bn contract for the construction of a tower in Moscow.
Arabtec is currently 18.94% owned by Abu Dhabi’s Aabar Investments, and its Egyptian activities are seen as part of economic and political support of Egypt by the UAE, which has provided billions of dollars in aid since Islamist president Morsi was ousted last year.
The project will commence immediately after the finalisation of the nearly complete planning and design stages.