UAE's Arabtec agrees $40 billion housing project with Egypt army

CAIRO Sun Mar 9, 2014 4:09pm GMT

Arabtec logos are seen on buildings under construction in the Marina area of Dubai in this picture taken November 28, 2009. REUTERS/Steve Crisp

Arabtec logos are seen on buildings under construction in the Marina area of Dubai in this picture taken November 28, 2009.

Credit: Reuters/Steve Crisp

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CAIRO (Reuters) - Arabtec Holding ARTC.DU, Dubai's largest listed construction firm, has agreed with the Egyptian army to build one million houses in a project worth 280 billion Egyptian pounds (24.06 billion pounds), it said in a statement on Sunday.

The project, one of the biggest in the region, is seen as a boost to the country of 85 million which has been struggling to attract tourists and foreign investors, amid political turmoil, and saw its foreign reserves drop to a critical low last year.

It will cover 160 million square meters across 13 sites in Egypt for lower income individuals. The company said it expected that work on the project would start in the third quarter of this year and be completed before 2020.

The firm did not say how the project will be financed but Hasan Ismaik, Arabtec's chief executive told Reuters on the sidelines of a press conference in Cairo said that the land will be given for free.

Ismaik added that there will be an agreement with around 40 banks in Egypt to provide financial facilities for limited income individuals.

Egypt's economy has been struggling since a mass uprising toppled autocrat Hosni Mubarak in 2011 when millions of Egyptians took to the streets calling for social justice and better distribution of wealth as well as an end to corruption.

One year later, the same demands emerged bringing an end to Islamist President Mohamed Mursi who was toppled after only one year in office when the army, prompted by mass protests, ousted him on July 3.

The United Arab Emirates, Saudi Arabia and Kuwait have pledged more than $12 billion (7 billion pounds) to help boost Egypt's economy.

(Reporting by Asma Alsharif, additional reporting by Ehab Farouk, editing by Louise Heavens)

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