Egypt cabinet approves outlines of new land law

Reuters, Wednesday 5 Jan 2011

Cabinet to finanlize a new bill to organize the distribution of Egytp's land bank

Egypt's cabinet on Tuesday approved the outlines of draft law that would create a body to handle the distribution of all state land, the official news agency said.

The planned law is part of a push to end a bitter legal row that has shaken investor confidence in the country's buoyant real estate market.

The body, which would act as a land bank for all state land, would set different prices for land it sold depending on what it would be used for. It would have representatives from four separate planning organisations, the official news agency MENA reported.

Officials had said they planned to change land allocation laws to end ambiguity after an administrative court ruled that the 2005 sale of public land to Talaat Moustafa Group for its $3 billion Madinaty project was illegal.

The court ruled in June that the land should have been put up for public auction as mandated by a 1998 law, and a higher court upheld the decision in September. The state said it had been adhering to earlier legislation when it sold the land.

Egypt's independent media have followed the case closely, portraying it as a battle between a judiciary protecting the rights of ordinary citizens and a business elite pampered by the government.

Shares in Talaat Moustafa, the country's biggest listed property developer, tumbled after the September ruling, but recouped losses when the government said it would reallocate the land to the developer under the same terms.

The company's share price eased 0.1 percent on Tuesday to 8.53 Egyptian pounds.

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