The Mirage Of Egypt’s New Capital City
A sort of Leviathan exposing its entrails and arteries, the unfinished city 40 miles east of Cairo, will become Egypt's new geographical and symbolic center of power. Hyper-modern and conceived in the wake of other smart cities that are revolutionizing territories, it will house the Parliament, the ministries and the main government agencies, near a huge presidential palace and an international airport. There will also be a business center, universities and schools, cultural complexes, a plethora of malls backed by residential parks (for 25,000 housing units upon arrival) and 1,200 places of worship.
A giant — and costly — project
The largest church in the Middle East is already in operation: the Cathedral of the Nativity. Inaugurated in 2019, it was the city's first public building. The landmark has not failed to feed the narrative of the regime as a defender of the Christian minority against the peril of the Muslim Brotherhood.
The ambitions of the new capital are disproportionate to the political reality but in line with the imagination that carries the country of the pharaohs and pyramids. When the worksite was launched six years ago, the total cost of the project was estimated at $58 billion, or more than 45% of Egypt's external debt of $138 billion, according to the latest figures from the Central Bank in June 2021, the end of the budget year. In comparison, the new Suez Canal, inaugurated in 2021, and already emblematic of President Abdel Fattah al-Sisi's ambitions, totaled $8 billion.
The first of the three construction phases is nearing completion, with more than $20 billion committed for 16,800 hectares of buildings. It is still difficult to see the larger vision, with just districts distributed in clusters around large symmetrical axes. The urban structure is similar to Dubai, which explicitly served as a reference for Anglo-Saxon architectural firms during the preparatory consultations.
The first residential lots will be delivered in the coming months, the German International University has been welcoming students since last year, and the transfer of a few dozen ministries has already begun. Since the end of December, employees have been walking by entire areas that are still in the structural stage to reach their offices, where the paint has not yet finished drying.
200,000 workers, 24 hours a day
Construction site of the Central Business District (CBD) in 2020
Sisi gets the credit
It's a mirage city, which does not even have a name yet, nor a location on Google Maps. The government's planning will is to clearly set the pace. More than 200,000 workers take turns on the construction sites.
Marwa M. is employed by one of the countless real estate agencies that have become involved in the city. "It runs seven days a week, 24 hours a day, it's non-stop," she says. "The workers, who come from all over the country, sleep on site in improvised dormitories.”
This morning, she is conducting a drive-by tour for the intermediary of a potential buyer based in Dubai.
The new capital is a stroke of genius to be credited to Sisi.
The fast growth and urgency are commensurate with the major challenges that President Sisi’s regime must face. At the top of the list is the demographic pressure. In 2020, the third most populous country in Africa passed the symbolic threshold of 100 million inhabitants. It’s a very rapid increase, with one million more people every six months, according to figures relayed by the French Treasury in 2021. 95% of growth is concentrated in the regions bordering the Nile, which accounts for 7% of the territory. With a third of Egyptians living below the poverty line and 800,000 young people entering the job market each year, it is not only necessary to find where to house them but also to create jobs for them.
Historian Tewfik Aclimandos says that "For some, the new capital is a stroke of genius to be credited to Sisi.”
Aclimandos is the director of research at the Egyptian Center for Strategic Studies, "a think tank reputed to be close to the government," he insists on specifying, for the sake of transparency. Aclimandos says the project reduces unemployment and boosts the economy without costing the state apparatus a penny since public land is sold to support construction. This is an unverifiable claim, held to be true, but never sourced. In general, financing is an informational black hole.
A city built on tech innovations
Egypt is consistently rated as a country where transparency in public finance and accounting is problematic, according to the analyst network International Budget Partnership. One can only assume from the brand new highway named after Abu Dhabi Crown Prince Mohammed bin Zayed that the United Arab Emirates is a major donor.
Expanding to the desert was the only possible strategy to deal with all these issues of urban living.
It remains true that real estate, along with energy, has been one of the main drivers of the recovery of an economy severely impacted since the 2011 revolution. These two sectors have allowed Egypt to post the highest GDP growth rate in the Middle East: 5% per year in the two years preceding the pandemic, according to the World Bank. And in the absence of opinion polls, the new capital seems to have the support of the population, with everyone agreeing that Cairo needs to be relieved of its congestion.
A charming but unlivable city of 23 million people, Cairo has developed in an anarchic manner from its center, with 48% of its surface area occupied by informal housing. It is also one of the most polluted cities in the world. The level of fine particles in the air is regularly measured at more than eight times the value set by the World Health Organization. Expanding to the desert was the only possible strategy to deal with all these issues of urban living.
It’s a strategy that has become realistic with technological advancements that make it possible to manage climatic conditions and topography. This is the promise of the "smart city," a concept that came into popularity about 10 years ago and combines the digital revolution with the ecological transition.
“Optimize and anticipate to make the city attractive, efficient, inclusive, sustainable and resilient,” says Marwa M., the real estate agent.
Behind the jargon recited like a new high-tech catechism lies a new approach to urban planning, almost a philosophy, based on data. It's about achieving environmental resilience, based on the habits of users, whose data is collected, aggregated and put through the mill of algorithms in real time. Orange Business Cloud has been awarded the contract to build a Cloud Center, from which operations for civilian services will be controlled.
On the sustainability front, the host of this morning's tour points out that all the buildings will only use the energy they can produce, with photovoltaic windows and roofs, wind devices and electricity regulators. The approach is applied in all departments, from waste disposal to water management. The latter is a critical issue in a country that is 70% dependent on the Nile and has an average annual deficit of 71 billion cubic feet of water resources. While talking up a group of villas that still only have their bearing walls, Marwa M. points out the security cameras that make the location "ideal for a family to live in. The environment is really reassuring."
Moreover, one does not circulate freely in the new capital; you scan a badge at the main entrance, which is framed by a gigantic gate. It looks like a toll booth, except that it has a security function equipped with facial recognition technology. At this stage, no one knows if this screening of visitors is supposed to last after the construction is finished or if it is temporary.
Chinese influence in the project
Prime Minister Mostafa Madbouly and Chinese representatives visit the construction site of the Central Business District
Army influence
One thing is sure: Everything related to the city of sands is ultra-sensitive. This is due to the omnipresence of the military in the project — a controversial subject in Egypt — and one of the main sources of repression against journalists. Administrative Capital for Urban Development (ACUD) is a public company, owned by the army, in charge of the future metropolis. It already has a governor, a general retired from active service obviously appointed by the presidency. But for Sisi's supporters, and large sections of public opinion in which he has good press, this is also a guarantee of efficiency.
"They don't know how, but things will be done," says one of the reporters who investigated the project and who must now remain anonymous after receiving threats and pressure.
“It would be wrong to believe that the army does everything, but it decides who it subcontracts to," historian Tewfik Aclimandos says. “Real estate is thus an opportunity to redraw the landscape of economic power, which has not been entirely purged of the structures of the former regime.” In fact, it’s that military dictatorship that gets the benefit of awarding contracts.
In the eyes of foreign investors, the army's growing stranglehold on this sector of the economy is a deterrent that distorts competition and does not guarantee the veracity of profit and loss accounts. Egypt is the largest recipient of foreign direct investment in Africa, but it has fallen from $9 billion in 2019 to $5.9 billion in 2020, according to the United Nations Conference on Trade and Development's 2021 report. Funds are mostly injected into energy and little in real estate, which rarely appears in the lists of opportunities for international banks.
A two-room apartment is being sold at an average price of $62,000
Many times asked by Les Echos, Khaled el-Husseiny Soliman, a retired brigadier general and spokesman for ACUD, has never responded to requests for an interview on this subject. One exception: China. China is very present through its state-owned company, China State Construction, and has announced funding of $17 billion, a third of the total budget. It’s a rare example of publicity by Soliman and it testifies to the recent geopolitical shift from the Middle East to Asian power, in parallel with American disengagement. It is the Chinese who brought to life the 80 floors of the Iconic Tower.
The fact remains that with an unclear schedule that feeds rumors of delays and prices that are not in line with the reality of the purchasing power of Egyptians, the risk of a ghost city with empty buildings is real. A two-room apartment is being sold at an average price of $62,000, while the GDP per capita is around $3,000. The sudden inflation of the offer pushes the agencies to propose sometimes fanciful financing plans to sell the lots and attract the middle class.
A potential ghost city
On the day of the visit, Marwa M. concluded the discussion by proposing a 59-foot studio for $80,000, with an initial contribution of 3%, the rest spread over 17 years. In a country where social safety nets are almost non-existent, some people remember with bitterness the subprime crisis in the United States in 2008.
“For the moment, Sisi believes he is achieving his short-term goals," the anonymous investigative journalist says. “With this Dantesque city, he is writing his national narrative and deploying the machinery of a dictatorship that he intends to install in the long term."
For his part, Tewfik Aclimandos considers that the raïs (Egyptian for leader) "relies on the legitimacy of achievements to compensate for the discontent caused by the shock of structural reforms.”
These were to satisfy the requests of the international financial authorities, in particular by the end of large parts of the subsidized economy.
"But it is especially the strong symbol of a state that recovers, after what Sisi believes to have been a disintegration, facing a civil society that has taken too much space,” Aclimandos says. “It’s a wrong whose origin he traces to Hosni Mubarak [the former Egyptian president] who would have been too permissive toward his opponents, especially in terms of freedom of expression."
Administered by data and subject to military governance in a context of widespread surveillance, the future capital will also be, if it really comes out of the ground, the flashy symbol of the authoritarian restoration in Egypt.
