Egypt's cabinet has approved Dubai-listed Arabtec's one million housing unit project on certain conditions, said Minister of Housing Mostafa Madbouli Saturday.
The price of the land will be equal to the price of the infrastructure built on it. Payment will be in the form of housing units given to the state's New Urban Communities Authority (NUCA), said the minister in a statement.
The housing project is part of an economic assistance package from the United Arab Emirates to Egypt, which has included billions in aid and investment since the ouster of Islamist president Mohamed Morsi in July 2013.
The same conditions will apply to any private company building affordable housing in new cities with the exception of New Cairo, 6 October City, Sheikh Zayed and El-Shorouk, added the statement.
The rules also limit the company’s profit margin to 7.5 percent of the project’s total cost, and the size of each unit is limited to 120 square metres.
Each developer of low-income housing must build a minimum of 10,000 residential units, spread out over one or more urban centres.
As approved by the government, the first phase of the Arabtec project will consist of 100,000 residential units in the cities of Badr and El-Obour, said the minister.
He added that $180 million will be transferred from UAE Arabtec to its Egypt subsidiary within six months of commencing the project.
In March 2014, Egypt's army and Arabtec agreed to build one million homes on 160 million square metres of land provided by the armed forces across 13 sites in Egypt for low income families. Negotiations eventually switched to the company and the housing ministry.
Arabtec initially announceed that it hoped to begin the project before the end of 2014, to deliver the first home in early 2017.
Negotiations between Egypt and the UAE-listed company slowed over disagreements on contract terms before they picked up in recent weeks.