President Hosni Mubarak has called for the formation of a "neutral legal committee" mandated with resolving the case of the Madinaty real-estate project, a swanky new gated community on the capital's outskirts built by the Talaat Mustafa Group (TMG).
Last week, the High Administrative Court ruled to revoke the sale of state-owned land to the firm. The ruling upheld a lower court decision to cancel the sale of eight thousand feddans of land to TMG for the project.
The verdict has disconcerted both project investors and would-be purchasers of housing units.
TMG, for its part, has called for a "legal solution" that would guarantee the rights of all those involved in the project, including the Ministry of Housing, TMG and consumers.
In a press release issued Sunday, Prime Minister Ahmed Nazif said that the issue of Madinaty’s land contract "has been under consideration by the government since the ruling that deemed it illegal.”
He went on to say that Mubarak had held a meeting at the presidential palace attended by the ministers of finance, trade, housing, media, education and transport, along with presidential chief-of-staff Zakaria Azmi. During the meeting, Mubarak reportedly called for preserving the rights of all parties involved in the project.
Nazif said the government was currently studying all legal aspects of the case, noting that the real estate project "must be completed" so that the employment opportunities created by the ambitious housing development would remain intact. He also explained that the project was owned by a number of small shareholders rather than a single individual.
TMG head Hamdi Lasheen, for his part, said there would be no alteration to the contract–signed between the Ministry of Housing and TMG–that would affect the general plans for the project or that would impact either shareholders or buyers.
Nevertheless, banks that had been funding the luxury housing development have also expressed concerns. According to the head of one funding bank, the Central Bank of Egypt had failed to notify any of the funding banks about the court ruling. He added that a number of creditor banks were currently reconsidering the credit facilities offered to TMG.
Alexandria Real Estate Equities, Inc, which owns the Madinaty project, has reportedly had dealings with eight local banks, including the Bank of Alexandria, the Egyptian Gulf Bank, the Commercial International Bank, the Industrial Development Bank, the Arab African International Bank, Piraeus Bank, the Export Development Bank of Egypt and Faisal Islamic Bank.
TMG had received a total of LE580 million in loans for the project before last week's court ruling.
Translated from the Arabic Edition.