Arabtec still in talks with Egyptian government over $40bn homes project

Arabtec is still in talks with the Egyptian government to implement the first phase of a US$40 billion project to build one million homes, it said in a statement to the Dubai Financial Market.

The Dubai-based builder has been involved in months of negotiations to start construction of phase one, which includes building 100,000 low-cost homes in the cities of Obour and Badr to the east of the capital Cairo.

Plans spread across 13 sites were first announced a year ago by the Egyptian president Abdel Fattah El Sisi, with construction originally scheduled to start in the final quarter of 2014, taking just five years.

The deal was widely regarded as part of a funding package from the UAE aimed at maintaining stability in the region following the Arab Spring protests. But talks stalled over the number of units to be provided in lieu of land payments.

Arabtec announced in April that it was in discussion with a number of local and international banks for the financing of the first phase of the project.

Arabtec reported a Dh279.8 million loss for the first quarter of the year, compared with a profit of Dh137.9m a year ago.

The company blamed the loss on spiralling costs, with several clients implementing contract clauses, downscaling and re-prioritising projects.

Arabtec, which has been dogged with restructuring issues and a management reshuffle, said last month that several senior staff were leaving the firm as part of a new round of restructuring.

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