Dubai construction company Arabtec ARTC.DU is close to completing the planning and design stage of its $40 billion deal to build one million homes in Egypt, the company said on Sunday.
Arabtec originally announced in March that it had agreed with the Egyptian army to build the homes at 13 locations around the country on land provided free by the armed forces. Construction was to start in the third quarter of this year, with the first homes to be delivered in early 2017 and the whole project to be completed before 2020.
The project would not only mark a huge expansion of Arabtec's business but also boost Egypt's struggling economy and help to resolve a housing shortage that has become a major source of political discontent.
Since the announcement, however, Arabtec has released few concrete details of the scheme, and said it was reviewing its business after the sudden resignation of chief executive Hasan Ismaik in June. Analysts have questioned how the firm can implement the Egyptian project without subcontracting out much of it or hiring thousands more staff, a potentially disruptive process.
In a brief statement to the Dubai stock exchange on Sunday, Arabtec denied a recent media report suggesting it was no longer as committed to the Egyptian project.
"The Company will commence the project immediately after the finalization of the planning and design stages which have been nearly completed after achieving significant progress in this regard," it said.
It added: "We would like to inform you that the Company has made positive progress and results in its discussions with the concerned authorities in Egypt in order to commence the project as soon as possible, which will reflect positively on the Company and its shareholders." It did not elaborate.
Arabtec is 18.94 percent owned by Abu Dhabi state fund Aabar Investments. Its Egyptian project is seen as part of economic and political support of Egypt by the United Arab Emirates, which has provided billions of dollars of aid to Cairo since Islamist president Mohamed Morsi was ousted last year.