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Egypts Housing Crisis…Challenges and Opportunities
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Monday, May 12, 2014
H.E. Dr.
Mostafa Madbouly

The Canada Egypt Business Council (CEBC) and the Egyptian Council for Sustainable Development (ECSD) hosted a special event and panel discussion featuring H.E. Dr. Mostafa Madbouly, Minister of Housing and Urban Development (MHUD) which focused on the challenges and opportunities facing the housing sector, from the current government’s point view. Moderating the discussion was Eng. Motaz Raslan, CEBC’s and ECSD’s Chairman and Eng. Ashraf Sadek, CEO of Ashraf Sadek Associates. The new social housing legislation, the Ministry’s development plans of existing cities and facilities were also discussed during the event.

 Over 250 notable attendees were present at the event. The attendees were CEBC’s and ECSD’s esteemed members, guests, businessmen, and politicians, among whom were former ministers Dr. Ali Meselhi, Dr. Mustafa Al Saeed, Dr. Hani Hilal, Eng. Alaa Fahmy, Mr. Osama Heikal, Dr. Ahmed Zaki Badr, Dr. Amr Ezzat Salama, Counsellor Hatem Begato, Counsellor Adly Hussein, in addition to their Excellencies Ambassadors of Australia, Albania, Finland, Georgia, Kenya, Kuwait, Malta, Mexico and Switzerland.

Chairman Raslan gave the opening remarks to the event. He commenced highlighting that the housing crisis threatens communal peace and hinders development plans. Conceding that no country is free from housing problems, he criticized that Egypt is behind in terms of overcoming these problems, which other countries have tackled successfully. Due to internal immigration, the emergence of slums, among other factors, Egypt continued to suffer from housing problems since the seventies, Raslan said. “The world is discussing smart cities, while in Egypt we are still struggling to provide simple accommodation to the middle and lower classes”, Raslan lamented. He pinpointed that the Egyptian annual housing needs are 500,000 housing unit, considering the population growth. Exacerbating the complexity of such demands is that Egypt still strives to provide a large sector of the population with proper sewage and safe drinking water, Raslan continued. He explained that there was never adequate funding available for the government to lift the tension off the crowded cities, and create housing centers away from them. He went on to say that despite this ongoing crisis, the construction field in Egypt remains one of the most attractive. The Chairman further noted that it is among few sectors,Nwhich were able to achieve remarkable progress, despite the continued turbulent political environment over the past three years. “Egyptians have been historically great builders, yet their descendants are now suffering a housing problem, one which we hope to overcome,” said Raslan in conclusion to his introduction.

Minister Madbouly addressed the attendees next and gave an overview of the Ministry’s vision for the coming period, its priorities and its strategy in tackling some of the more pressing challenges in the housing sector. Minister Madbouly was formerly the Chairman of the Urban Planning Authority and the Regional Director of the Regional Office for Arab States of the UN Habitat Program.The Minister started by reassuring the attendees that the Ministry is looking to work on a sustainable plan; one that is not attached to a specific minister that ends with his tenure.

He added that even though the current cabinet is but two and half months old, it has already succeeded in ratifying the Social Housing Law. The law legalizes the state’s mandate to provide adequate housing to citizens. It lays the foundation for institutionalizing social housing, which is for citizens of low to middle incomes. He explained that in the past, the government would initiate only short-term projects for social housing. When these projects conclude, there would be no vision or plan in place for the coming step towards creating more housing, the Minister said. He explained that the new legislation creates a fund for social housing; one that is managed by the MHUD, along with the aid of the ministers of planning, local development, international cooperation and representatives of minister of defense, as well as experts in the field. The fund's sources would be the state budget, in addition to the excess profit of the New Cities Authority, 1% of the state revenues from the sale of lands for any purpose nationwide and all fines imposed on construction companies for violating the construction law. The Minister also emphasized that developing legislation is progressing on the mortgage front, as well. He said that legislation regulating mortgage has been amended to be more flexible and able to accommodate for the needs of citizens, who would still find difficulty affording housing, even with the social housing schemes underway
Minister Madbouly revealed that soon available PPP would be announced for housing projects for middle-income citizens. Reactivating cooperative housing is another track the Ministry is on, the Minister added, announcing that 1,200 acres of land will be made available in the near future for cooperative housing. He said that he hoped that new policies adopted would make cooperative housing more effective than it used to be in the past.

The Minister also stated that resolving disputes with investors in the field is simultaneously underway. He said that the government is seeking amicable resolutions, while preserving the rights of the Egyptian people. He asserted that the Ministry’s vision is to resolve disputes without hesitation and to send a reassuring message to local and foreign investors alike.

Regarding facilities, the Minister described the sewage system to be the true challenge facing the Ministry. He added that the Ministry would be adopting new technologies in delivering sewage to areas, where it is not available yet. The Minister said that the new technologies would not only save the government money, it would also be reach more areas within a shorter time span. He added that the plan adopted currently, would allow for the service to be available to places in need in eight to ten years, as opposed to 15 years, with the traditional methods. In conclusion to his word, the Minister said that the strategies adopted by the Ministry are not nascent, but are plans, which were in the works by pervious ministries, that are being implemented now.

In a brief comment, Eng. AshrafSadek said that neglecting urban planning had reflected badly on the country, and on even people’s attitudes. He proposed re-planning the Suez governorate, to complement the promising plans for developing the Suez Canal’s surroundings. The floor was then opened to questions. Questions tackled an array of housing-related topics.

While housing is the ever rising star among business sectors in Egypt, its complex problems are unending, especially in light of an exponentially growing population. However, the Ministry’s determination to tackle these problems and to find lasting solutions to them, would hopefully alleviate the suffering of low to middle-income citizens and simultaneously satisfy investors, in a win-win situation, that is direly needed.

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