Egypt Is Spending Billions On A New Capital That Egyptians May Not Visit

Egypt is spending billions on a new capital that Egyptians may not even visit. The new metropolis is at the heart of the president’s effort to modernize the country.

Egypt Is Spending Billions On A New Capital That Egyptians May Not Visit

A sprawling new capital city, powered by billions of dollars in debt to help see it through, is starting to take shape in a desert plain 40 miles east of the center of Cairo. It will feature skyscrapers, opulent homes, and pedestrian malls that will reflect President Abdel Fattah Al Sisi’s vision of a modern Egypt.

The challenging aspect is now recruiting individuals to live and work there.

The 270-square-mile area designated as the new capital is intended to draw more than six million visitors. The government intends to begin relocating 40,000 civil servants into a finished government district in January, despite the fact that it is still years away from completion and that transportation lines are still incomplete and a dusty business tower is rising from the center of a construction site.

The New Administrative Capital, a new city that is expected to cost tens of billions of dollars, is the focal point of Mr. Sisi’s plan to modernize Egypt, along with other infrastructure initiatives like the Suez Canal expansion, a nationwide system of new highways, bridges, and tunnels, and a resort town on the Mediterranean coast. Despite Egypt’s ongoing economic crisis, Mr. Sisi is pushing through with these extravagant projects, which are expected to cost hundreds of billions of dollars. According to Oxford Economics, a U.K. research company, the nation will have more than $1 trillion in debt in the next several years, both domestically and internationally.

Shifting the government’s power nexus away from the historic neighborhoods around the Nile River, where historical structures are deteriorating, traffic is clogged, and residents are closely packed, is fundamental to Mr. Sisi’s plans for a new megacity on the outskirts of greater Cairo. The government district of the new capital is flanked with rows of buildings that resemble ancient Egyptian architecture, converging to a big gathering place known as People’s Square, a massive mosque, and a presidential palace.

“All of Egypt must be like the new capital and that’s what your dream should be,” Mr. Sisi said in October.

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A billboard featuring President Abdel Fattah Al Sisi at a construction site in the New Administrative Capital in Egypt. PHOTO: KHALED ELFIQI/SHUTTERSTOCK
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The Egyptian government’s current base in central Cairo suffers from traffic congestion and densely packed residential areas. PHOTO: KHALED DESOUKI/AGENCE FRANCE-PRESSE/GETTY IMAGES

The initiative got underway in stride in 2015, when Egyptian authorities sought guidance from officials in the United Arab Emirates on how to create and finance a new city. Mr. Sisi and Mohamed Alabbar, the developer of Dubai’s Burj Khalifa tower, revealed the first model for the future capital. According to Ayman Ismail, the founding chairman of the firm developing the new capital, who has since stepped aside but still acts as an adviser, that collaboration fell apart quickly due to disagreements over the financial parameters of a joint venture.

The Egyptian military subsequently took over the project, and local developers created a new layout that was significantly less pedestrian-friendly and divided government, business, and residential districts.

The new capital is also expected to have its own airport, universities, and a park with a length of more than 20 miles. There will be multiple skyscrapers in the major business district, including the highest building in Africa at 78 stories.

The tower is visible in the distance from the city’s Arabesque-arched entrance. Buildings for Egypt’s central bank and other state-run banking institutions still stand on unpaved premises in a distinct financial area.

There were hardly many people on the streets during a government-led tour of the government district in September. Even though some bushes and palm trees had already been planted, the area surrounding the People’s Square was largely without shade.

“The government built the new capital to say that we have a modern state and that we look like Dubai,” said Sameh El Alayli, a professor of urban planning at Cairo University. “In reality, it’s a project to show off skyscrapers, rather than address the real needs of the country.”

How quickly the city can draw in business, according to Mr. Ismail, will determine how populated it will be. He thinks that the city’s proximity to the Suez Canal and the government district’s well-organized layout will both increase productivity.

“This project is critical for the country,” he said.

Personnel at banks and asset managers indicated it would take years to relocate a large number of employees to the new capital. Some companies say they are waiting for the finance regulator and the Egyptian stock exchange to move first. The majority of investment banks are concentrated in west Cairo, where the Egyptian Exchange and Financial Regulatory Authority is currently headquartered.

Authorities are attempting to persuade foreign embassies to purchase land in a new diplomatic zone. Several foreign diplomats stated that their embassies would have to wait until Egyptian government ministries relocated there first. They also want to examine how the new capital performs before deciding whether it is economically and logistically feasible to establish an office there.

Vehicles nearing the new capital are welcomed by colorful banners advertising high-end condos, some with multiyear payment installments.

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An apartment complex in the residential area of Egypt’s new capital city. PHOTO: ISLAM SAFWAT/BLOOMBERG NEWS

David Sims, a Cairo-based urban planner, is doubtful of the city’s appeal to ordinary Egyptians.

“What this involves is having a huge and growing middle class with lots of disposable income,” said Mr. Sims. “It’s just not happening, period.”

The new city’s hospitals, restaurants, and schools are not yet finished, and most Egyptians who live in poverty will probably not be able to afford it.

“I’m being thrown into the unknown,” said Ahmed Salah, 36, a youth and sports department employee who has visited the new capital several times but whose office has yet to relocate permanently. He traveled 2½ hours from his house in central Cairo to the new city. Mr. Salah and his wife, who works for the government, do not anticipate being able to buy an apartment in the new city.

Food and commodity costs have increased due to the Covid outbreak and the conflict in Ukraine, making it more expensive for the Egyptian government to acquire wheat and subsidize bread supplies. The withdrawal of billions of dollars in foreign investment from Egypt has left the nation short of American dollars for imports and seen the value of the Egyptian pound plummeting.

Due to the unrest, the government was compelled to turn to the IMF, the United Arab Emirates, Saudi Arabia, Kuwait, and Qatar for financial support. Even though a few loans and deposits have been made, analysts claim that the government still needs to raise additional funds because a lot more debt is due in the near future.

The cost of the new capital, according to Egyptian state media in 2015, is estimated to be $45 billion. Khaled Abbas, the head of the military-run organization in charge of the new capital, stated in an interview that he anticipated the final sum to exceed that estimate, but he added that it was impossible to determine by how much more. According to Mr. Abbas, Egypt has already spent more than $20 billion developing the new capital, with construction costs rising by 10% to 15% as a result of the conflict in Ukraine.

Egypt is a country with a rich history. Previously, researchers had drilled five cores into the Giza floodplain in May 2019 to try and reconstruct the history of the Nile. It was discovered that a vanished arm of Nile helped ancient Egyptians transport pyramid materials.

According to Mr. Abbas, nobody can forecast the final cost of the new capital. “I’m sure it will exceed 45 billion [U.S. dollars]…it changes every day.”

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