Egypt’s Desert Dreams: Development or Disaster? (New Edition)

Foreword to the Hardback Edition

Timothy Mitchell

For more than half a century, those governing Egypt have dreamed of solving the country’s economic and social challenges through the development of its deserts. With most of the country’s population of more than 85 million people living and working within the slim strip of land formed by the valley and delta of the Nile, the desert regions on either side of the river appear to offer the space and the opportunity for unlimited growth. Forming more than 95 per cent of the country’s land area, the desert is seen as a vast resource: it can be reclaimed for agriculture, built over with cities and suburbs, and marked out as an almost limitless tract for creating highways, factories, recreation, and tourism.

Desert development is not new: lands along the periphery of the valley have been reclaimed for agriculture during many periods in the country’s history. The state introduced large reclamation schemes in the nineteenth century and accelerated them in the mid-twentieth century. In the 1970s, the government launched an ill-fated program to build a network of industrial cities in the desert.

In more recent years, however, the dream of desert development became a source of extraordinary wealth. During the final decades of the twentieth century the Egyptian state embarked on a series of desert megaprojects: to build a second river valley running parallel to the Nile in the east, to irrigate and settle the northern Sinai peninsula, to double the size of Cairo with satellite developments in the desert, to create industrial parks and port facilities on an unprecedented scale, and to cover almost every meter of the country’s desert coastline with tourist resorts.

As David Sims shows in this important book, the wealth that was made from these schemes did not come from meeting the goals of development. The government promoted the megaprojects as a way of creating large increases in employment, food supply, cropland, housing, and industry. But the number of jobs, houses, fields, and factories that resulted was unimpressive and contributed very little to addressing these needs. The main economic benefits came not from improvements in productive life and collective well-being, but from the land deals, contracting opportunities, and speculative profits enjoyed by the small group of well-connected entrepreneurs and regime insiders who were the principal beneficiaries of desert development.

When the revolutionary movement of January 2011 removed the regime of Hosni Mubarak from power, a number of Egyptian activists, journalists, and planners were able to publicize the way desert development had operated. Many of the issues had been brought to light over the previous decade, but the political freedoms enjoyed in the months after the fall of the Mubarak regime allowed a fuller exposure of the regime’s mode of operation: the vast areas of public land allocated to private interests at low prices, the unauthorized taking of tens of thousands of acres of desert land, the waste of extraordinary quantities of public funds in building infrastructure for ill-conceived megaprojects that had failed to produce effective results, and the revenues lost in the disorganized and unregulated privatization of public assets.

Egypt’s Desert Dreams is the first book to provide a full-length account of this misappropriation and misuse of the country’s collective resources. But the real value of the book is in connecting recent events with the longer history of desert development. Prior to the Mubarak era, there was a period when the policies of the state were not governed by an overriding imperative of the enrichment of the ruling family and its well-connected entrepreneurs. But even when the government made serious efforts to address the problems of collective livelihoods, attempts to solve these issues through development of the desert met with little success.

As an urban planner who has lived and worked for more than half his life in Egypt, and the author of a companion volume on the development of Cairo,¹ David Sims brings decades of experience and observation to understanding this history, along with an extensive study of published and unpublished statistics and reports. In examining, chapter by chapter, the fate of development schemes in the areas of agriculture, housing, industrialization, natural resources, and tourism, Sims documents both the ambitions of desert development and the reasons for its repeated failures, unexpected consequences, and side effects.

His account has an overriding theme: the attempt to use the ‘new lands’ of the desert has been driven by the wrong reasons. It has been shaped not by a consideration of the appropriate use of arid regions, but by attempts to solve the problems of the ‘old lands.’ Whatever the problems of the valley—overcrowding, poverty, pollution, employment, housing, industrialization, and foreign investment—the answer was to be found in the desert.

Why has the government repeatedly tried to address the collective challenges of social improvement by turning to the desert? Let me highlight three important points that one learns from the wealth of evidence and analysis in the book.

First, the geography of Egypt offers what seems like a topographical imperative, which governments and planners employ to make desert-based solutions look natural and without need of justification or evaluation. Almost no account of Egyptian development avoids setting the scene by describing the country with the simple visual image of a map: a narrow river valley, crowded with people, with some of the highest population densities in the world, and surrounded by an almost limitless and undeveloped desert. The naturalness of this image and the solutions it suggests help bypass the requirement to justify the repeated and costly attempts to expand into the desert, or to look closely at the actual results of desert development initiatives or at the other options available.

There are alternative ways to think about this remarkable geography. After all, every country faces limits to the area of its productive land, even if elsewhere the limit is less visually dramatic. It is true that a lot of people live along the Nile. The population density of the Nile Valley and Delta in Egypt, as Sims points out, is similar to that of urban areas in the United States, and is double that of the cities of Dallas and Houston. But what makes this density a problem?

Another way to see the same picture is to consider that Egypt represents a notable success: unlike rural areas in the west, the compact geography of rural Egypt has enabled households to stay on the land. The small-scale farming that was wiped out in many parts of the world in the course of the twentieth century and that some countries are now attempting to revive has been far more resilient in Egypt. The country’s household farms are among the most efficient and productive in the world, and provide low-cost food and a viable livelihood to a larger population than perhaps any comparable region.

Some of this resilience reflects a political success: the successful struggle of Egyptian farmers over the last century and a half to enforce limits on the loss of land to large commercial operations (whose profitability to their owners or investors is often mistaken for productive efficiency, so that in recent decades small farmers have had to defend this victory against renewed attempts to move toward large-scale agriculture). But is the ability of small farmers to remain on the land also due to the very density of population that others see only as a problem?

Sims notes a remarkable feature of the Egyptian countryside: thanks in part to the viability of small-scale farming, Egypt has one of the lowest rates of rural–urban migration in the world, a rate that has fallen since the 1970s and 1980s. The country’s migration ratio of 8 percent (measured as the ratio of the migrant population to the total working-age population) is about half the world average, and compares with a rate of about 35 percent in Morocco and more than 60 percent in India.

The density means that everyone in rural Egypt lives close to a provincial town and administrative center. Transportation and marketing costs are low and households can support both those who farm and those who work in town. Due to this density and proximity, villages in turn can support doctors, lawyers, and schools. The simple images of an overcrowded valley and expansive, empty desert capture none of these dynamics.

As Sims shows, many of the setbacks of desert development were caused by the failure to take account of the value of these interconnections. This was the case both in agricultural land reclamation and in the attempt to locate housing and industry in the desert. Thanks to its schemes for the desert, Egypt led the world in the number of new cities it attempted to build in the second half of the twentieth century. But few people could afford to live in cities that offered no connectedness with the countryside or even among its own neighborhoods and apartment blocks, and few industries were attracted to sites that lacked affordable housing or linkages to other local producers and suppliers. One of the main problems of desert development, Sims shows, whether in agrarian projects or in the new cities and industrial sites, was that social and material interconnection, linkage, density, and proximity were ignored, resulting in isolated, sparse, unviable forms of living and producing.

The failed development reflects a view of the country’s problems in which simple geographical images replaced consideration of the actual advantages and disadvantages, strengths and weaknesses, of existing modes of living.

This leads to a second point we can learn from the book for understanding the strange attraction of desert development. Development is always a political project. Even when the goals are shaped by a concern for the collective good rather than the enrichment of an elite, it entails a struggle among competing forces. The density and social and spatial proximity that is a strength of rural Egypt (and equally of most of its urban areas) are a problem for the state and its planners. In the old lands, the development planner is in a position of weakness. It can be hard to find a site where the strengths and resources of the planner can gain much leverage over the arrangements and connections among existing populations, spaces, and resources.

In the desert, these positions of strength and weakness are reversed. The government planner has few existing forces with which to compete: for each project, sites can be demarcated, decisions made, space allocated, infrastructures laid out, and resources distributed amid far fewer present arrangements, forces, and interests. It is much easier for the governmental powers to gain the upper hand and embark upon the work of development. As a site of development, the desert has attractions that have more to do with the relative strengths of the agents than with the actual viability or suitability of schemes to improve the collective condition.

A third point one learns from this book is that the dynamics of desert development in Egypt are not necessarily true of desert development in general. In Egypt, the desert resource forms a major part of disposable public assets. Many countries have large areas of arid land. But what matters is often not the extent or availability of arid territories but the relationship between the different kinds of land. In Morocco, Algeria, and Tunisia, for example, there are large tracts of desert. But only in Egypt does the capital city and just about every other major urban area adjoin desert lands, as does most of the coastline and much of the country’s cultivated area. It is along this margin, where the city, the field, or the beach adjoin the desert, that most opportunities for development—and for private enrichment—are found. Typically, the state claims ownership and control of this margin. In Egypt, the desert margin is a major resource of the state. This is a very different arrangement from most countries, where public lands are often remote, or relatively small in area, or set aside mainly as a means of protecting certain natural regions against development. Egypt’s arid margin shapes the very dynamics of its politics.

These are just three themes among the many important lessons that David Sims has drawn from his study of desert development. The book is not an indictment of all such development. The author notes the success, for example, of the vast areas of unplanned and unsanctioned development carried out by small landholders who reclaim strips of desert at the border of existing cultivation along the length of the Nile Valley. This informally improved land may represent as much as one-third of all desert reclamation in Egypt, and an even higher percentage of agriculturally productive reclaimed land. Although seldom challenged by the government, this piecemeal improvement has received little official acknowledgment or systematic study and support.

The book offers an uncompromising assessment: with a few exceptions, desert development has been a failure, seldom coming anywhere close to realizing its target or ambitions. But Sims also attempts to understand why this has been the case, and what would be required to overcome these problems and embark on a more successful approach to the desert. He is admirably clear about the starting point for any future policy: desert land is not the property of those who control the state but a common resource, to be protected or put to use not for the benefit of a few but for the collective good.

Preface to the Paperback Edition

Introduction

This paperback edition is being put to press almost four years after the hardcover version of Egypt’s Desert Dreams was written. While only a short time in the saga of Egypt’s desert dreams, much has happened and even more has been said of the desert imperative, especially by government and its cheerleaders. Thus it is worth giving a quick summary of the continuing discourse on Egypt’s desert potential and also the reality of concrete achievements—as much as hard facts are available. Does what has been said in the first edition still stand? Are some of the innumerable desert schemes and grand projects launched by the state actually beginning to pay off? Are plans to shift tens of millions of people out of the crowded Nile Valley—Egypt’s new population map—actually coming to fruition? Are the government and its elites calming down their rhetoric and beginning to strike a more rational approach to populating the desert and managing public land? And finally, are at least some voices of reason beginning to emerge about reliance on a desert trajectory as the underpinning of Egypt’s development?

One decidedly new element to appear is the scheme for a gigantic new administrative capital on what had been blank desert east of Cairo. The plan immediately captured enormous interest when it was announced at an economic investment conference in Sharm al-Sheikh in March 2015. The first edition of Egypt’s Desert Dreams had just come out a couple months earlier, and we were inundated with calls from journalists desperate for comments about the new scheme, for which there was little information other than superlatives. Now, almost three years later, it is worth investigating just how this concept has developed, and what this says about government posturing and legitimacy.

It is not only the new administrative capital that has ramped up the preoccupation with mega schemes in the desert. As we proceed to review Egypt’s various desert components, it will be clear that exploiting state-controlled desert lands has become, more than ever, the fulcrum around which Egypt’s future promise is perceived. In chapter two of the first edition we concluded that such a fixation with conquering the desert is a recurring theme, even necessity, and it seems that there will be yet more and more of it to come (p. 63). Looking from today’s vantage point (December 2017), it seems this prediction has already proven to be very true.

The government has ratcheted up ever higher the imperative for desert development as part of national plans. In September 2017 the minister of planning extolled Egypt’s main Strategy for Sustainable Development, Vision 2030, talking about inclusive growth and economic development for future generations. Heading the list of concrete steps were various mega projects underway or planned—the Suez Canal Economic Zone (SCEZ), the new administrative capital, the Four Million Feddan Land Reclamation Project, the North Coast development zone, the Golden Triangle, New al-Alamein, the One Million Unit Social Housing Program, a furniture city in Damietta, new industrial zones across the nation, and New Galala City—all of which are being built on state desert land. The minister goes on to describe other pillars of Vision 2030—the energy, social inclusion, education, and health pillars—but the implication is clear: Egypt’s development strategy for the next fifteen years is led and symbolized by a simplistic spatial construct, one that sees the future of the economy and its citizens as being out there in the desert.¹ Such a fixation with desert development is constantly reinforced by regime stalwarts and pundits, and it is as if conquering the desert will perform any number of miracles for the ills facing the nation. For example, Abdel-Moniem Said, writing an opinion piece in December 2014, affirmed that spreading out and developing new cities is the future of Egypt and managed to equate this with achieving a definitive victory over terrorism and over the psychological and propaganda war that the Muslim Brotherhood and its supporters are waging at home and abroad.² Not to be outdone, in September 2017 Mohamed al-Fikki, editorialist and the recently appointed director of the Bibliotheca Alexandrina, focused on Egypt’s long-ignored population time bomb, concluding that this fundamental and even existential challenge will disappear once the national policy of shifting people out into the desert becomes a reality. Who needs family planning?³

In the following pages of this preface we take the reader through what has been happening in Egypt’s desert over the last four years. We first look at the new administrative capital, then take up the expansion efforts in the existing new towns, the launching of new new towns, the greening of the desert, industry and mining in the desert, coastal tourism, and the issue of management of state lands. To the extent that data is available from the results of the 2017 Census, we also measure the degree to which the government’s overriding policy to move people out into the desert has been successful over the last decade. Finally, we present a conclusion that tries to summarize the main recent trends in the eternal quest to make desert dreams come true.

The New Administrative Capital

Forget the numbers. They’re not important, and not fixed. We have a dream, and we’re building our dreams now.

—Khalid al-Husseini, spokesman for the Administrative Capital Company for Urban Development, 24 October 2017⁴

In March 2015 a much-promoted economic development conference got underway in Sharm al-Sheikh, aimed at promoting Egypt’s many investment possibilities to foreign investors, particularly those from the Gulf. Along with the SCEZ and other mega projects, the concept of a new administrative and financial capital was slickly presented with superlatives galore. The city, to be located approximately halfway between Cairo and Suez, is set to be a 700-square-kilometer urban hub, with twenty-one residential districts to accommodate 6.5 million people. It is said to feature 1,250 mosques and churches, nearly 2,000 schools and colleges, over 600 medical facilities, 40,000 hotel rooms, an amusement/theme park four times the size of Disneyland, a public park over twice the size of New York’s Central Park, an airport as large as Heathrow, and a business/finance center with the tallest building in Africa. Other superlatives: artificial lakes and a green river over an area of 6,000 feddans, solar energy farms stretching over 91 square kilometers, and at least six foreign universities.⁵ As the new center of government, it will also include a Government District (al-hayy al-hukumi) which will accommodate over thirty ministries, the cabinet, Parliament, a Justice City, a huge conference center, and the presidency (itself on no less than 17 square kilometers or 4,000 feddans). Next to it will be a diplomatic quarter capable of housing over 110 embassies as well as two exclusive villa areas.

At the Sharm al-Sheikh conference the international media certainly took notice, both because of the bold, brave-new-world design concept and graphics produced by Skidmore, Owings and Merrill,⁶ and especially because the concept had been a well-kept secret until the launch.⁷ There had been earlier plans for the relocation of administrative buildings outside Cairo under Sadat in the late 1970s and again in 2007 as part of the Cairo Vision 2050, but the project displayed in Sharm al-Sheikh was, in its scale and intent, completely unprecedented.⁸

At the conference the idea was that the development of the new capital would be led by Capital City Partners, a privately owned property vehicle founded by Mohamed Alabbar, chairman of Emaar Properties of Dubai and the man behind Burj Khalifa, the tallest building in the world. Even though an MOU to that effect was signed, the deal fell through some six months later. At this point reports began to circulate that the China State Construction Engineering Corporation and the China Fortune Land Development Company were to develop parts of the new city in partnership with the Egyptian government, but by the end of 2016 this formula also collapsed. Finally it was decided that Egypt was to go it alone, at least for the initial phase. Thus in May 2016 the Administrative Capital Company for Urban Development (Sharikat al-‘Asima al-Idariya li-l-Tanmiya al-‘Umraniya) was set up, a joint share company with 51 percent ownership by the armed forces and 49 percent by the New Urban Communities Authority (NUCA).⁹

Groundbreaking for the main highways of the first phase started in early 2016 and since then the pace of construction has been very impressive. Scores of Egyptian public and private contractors are doing all the work, supervised by the Armed Forces Engineering Authority and NUCA. By the end of 2017 the first residential quarter (Number 3, with 25,000 units) was more than half finished; the 900-room al-Masah Hotel had been built, complete with conference hall, mall, lake area, and a strange black megalithic sculpture;¹⁰ and foundation work had been started for some of the new ministry sites. A raised VIP viewing platform overlooking the new city, replete with helipads, had been quickly finished by early 2017.

Outside investors have been reported to be creeping back in a big way. From mid-2016 to mid-2017 several reports, somewhat confusing, mention that the China Fortune Land Development Company is still looking to invest some $4 billion over five years in various projects in the new capital and a total of $13.5 billion over the next ten years, undertaking the development of 14,000 feddans of Phase One mainly to create the business and finance center, replete with lots of glass and steel skyscrapers. Other investments are said to include a smart city, a residential project, infrastructure projects and educational-cum-entertainment services, and a rapid rail link.¹¹ At the same time the UAE businessman Mohamed Alabbar has resurfaced, mentioning in September 2017 that he plans to implement projects in the new administrative capital, though as usual details are scarce.¹²

When talking about the new administrative capital, even almost three years after it was announced, it remains difficult to distinguish fact from fiction, and pronouncements are often vague, even contradictory. Yet it is certain that the commitment and perseverance of the Egyptian government in moving ahead is impressive, and the backing and even goading by the president for more rapid progress is ever-present. However, such a commitment cannot mask several problems that loom, and we analyze some of these in the following paragraphs.

Access to the new capital

Media reports about the new capital usually start off by mentioning that it is located some 30 or 45 kilometers from Cairo. Actually, measured from Tahrir Square along major road corridors, the distance is 62 kilometers to the new capital’s Government District (al-hayy al-hukumi) via Road 90 in New Cairo, or 71 kilometers via the Suez Desert Highway. And from there one will still have to traverse as much as 20 kilometers to reach other parts of the city. Such access will be by surface road transport, either by bus, private car, or taxi. As anyone who works at the AUC campus in New Cairo can attest, getting there from downtown Cairo already takes well over an hour, and the traffic will only get worse. It is then another 30 kilometers to reach the new capital’s government city. The alternative, along the Suez Road, is no quicker, and with the burgeoning developments along this axis (Shorouk, al-Badr New Town, Madinaty, etc.), traffic can only become heavier. Of course, were one to live in nearby New Cairo or Madinaty, commuting by car would be much simpler, but how many of those who work in the new capital will be living in these enclaves?¹³

Although none of the available plans of the new capital indicate any land reserves for rail transport lines, several statements made by government officials show that planning for a rapid-rail passenger link from Madinat al-Salam (east of Cairo at the start of the Ismailiya desert road) to the new capital is well advanced. In fact, ground-breaking for the project is supposed to start at the end of 2017, costing $1.2 billion, and to be built by the Chinese firm AVIC backed by a loan from the Chinese Import Export Bank.¹⁴ However, it seems that the Ministry of Transport is having difficulties raising its financing share, and proclamations of the imminent realization of this and other rail projects have proven either premature or downright wrong in the past.¹⁵

The scheme intends to use the right-of-way of the old Cairo–Suez single-track railway for most of its length, plus some 25 kilometers of new track, to arrive at the new capital. This scheme will have 11 stations, including stops at al-Shorouk and al-Badr New Town. Its terminus at Madinat al-Salam is to connect to the still-to-be-built Phase 4 of the third metro line. The eastern section of this third line will have 16 stations starting from Ataba in downtown Cairo. Thus, when and if the rapid transit connector is built, anyone coming from central Cairo to the New Capital will face at least 28 stops plus at least one transfer. Hardly a ‘rapid’ transit solution. And, as has been the case with other rail connectors planned for the new towns around Cairo, there is the troublesome fare issue. To recover the huge investment plus operating costs, any private operator will need to charge fares that will be unaffordable to the majority of potential commuters, and those who can easily pay will probably prefer their private cars. Thus, for the scheme to work, massive state construction subsidies will be required as well as continuing subsidies for operating costs.

To further confuse the transport issue, in July 2017 an MOU was signed between NUCA and Canadian Bombardier for a monorail line from Madinat Nasr through the Mushir Tantawi Corridor and New Cairo’s Road 90 to the new capital, with a projected ridership of 1.5 million passengers.¹⁶ This project would be in direct competition with the proposed Chinese light rail, and in any event achieving even a fraction of the estimated ridership will be extremely difficult. At least a feasibility study is being conducted first.

It is interesting that most plans and images of the new capital show it to be a stand-alone agglomeration surrounded by clean desert on all sides. However, this is far from reality, and already virtually every bit of land abutting its western edges is reserved for yet more upscale residential and grandiose mixed developments, and even remaining desert on its northern edge is rapidly being planned. Many such projects have already started, with ground having been broken for Arab Contractors’ huge Future City directly to the north (7,500 feddans, madinat al-mustaqbal) and with work well underway in a super-compound on 10,000 feddans for the Ministry of Defense directly to the south.¹⁷ And every last feddan of the desert on the eastern extreme of New Cairo is already being subdivided for gated communities and villas. In other words, one can soon expect a continuous landscape of sparse and sprawling development bounded by the Suez and Ain Sukhna highways and stretching 56 kilometers from the old Ring Road through New Cairo and the new capital to the east. All together, within this mega quadrant one is talking about 1,300 square kilometers of low-density, car-oriented cityscape and suburbs, most of it to be perpetually underutilized. Talk about urban sprawl! For comparison, the size of this quadrant exceeds that of the whole of the City of Los Angles (1,215 km2) and is much bigger than the five boroughs of New York City (790 km2).¹⁸ Also, to this area should be added desert lands across the Suez Highway directly to the north, rapidly filling up with the sprawling new towns of al-Badr New Town, Shorouk, and New Heliopolis and with other sundry projects such as the expanding Robiki Leather City.¹⁹

Design of the new capital

The layout of the new city is structured around a serpentine central green spine covering 40 square kilometers, bound by two huge east–west motorways (Mohamed Bin Zeid Avenue South and Mohamed Bin Zeid North, each of which is 125 meters wide, not counting slip roads).²⁰ Off of this spine are to be twenty residential districts, each with its own service center and green space, plus the main government city (said to be a mixture of pharaonic and Islamic architectural styles), the diplomatic quarter, and various specialized zones for higher education, business, banking, and offices, a ‘justice city’ with courthouses, a culture and arts center, a huge presidential palace and grounds, and so on. The plan calls for abundant open spaces, greenery, a segregation of uses, and vast distances between everything that will require a near-total reliance on private cars. Somehow this reliance on the automobile has been dissimulated away with passing references to an electric train from Cairo, bus and bike lanes, and ample, wide pedestrian walkways. In fact, the CEO of the new capital company, during an interview on the project’s sustainable development, was quoted as saying that the system of transport is so well conceived that inhabitants will in principle be able to avoid using cars.²¹

It should be added that, in the design of the urban form for the new capital, architects have made a ‘courageous’ break with the past. For decades the many new towns in Egypt have been subject to the same out-of-the-drawer rectilinear patterns, with lots of 30-degree angles thrown in for relief. In contrast, in the new capital urban arterials and neighborhoods are to be entirely curvilinear, and it seems that straight streets and highways have been studiously avoided (except in the Government District).

One prominent design feature—some would say impediment—of the new capital is the north–south regional ring road that bisects Phase One of the new town just west of the central government city. Considered an anathema in traditional town planning, this artery is designated to have a whopping 800-meter reserve that will represent a cordon sanitaire between the western and eastern sections of Phase One. Evidently this has not bothered planners.

Nearly all of the layout is to be located on flat, featureless desert.²² The master plan designers, Skidmore, Owings and Merrill, made much of the scheme fitting into the landscape and expressing natural features to advantage, but only at the far eastern end of the site is there anything like true wadis and ridges. In effect, almost every landscape feature will need to be artificially created, including water bodies.

Phase One is to be constructed on an area of 40,000 feddans or 168 square kilometers, representing about 25 percent of the total new city. (See Map 0.) According to plans made available in the media, this first phase will include all the main government buildings, the presidential palace, the diplomatic quarter, and most of the central spine. It will also include eight residential zones and numerous blocks designated high-density commerce and offices, or office and residential, or tourism and amusement, which are found along the green spine and are intended to be the location of most high-rise development. There are areas labeled as medical, convention, and amusement zones, and there are also many areas sprinkled all over Phase One that are only designated as investment zones—in other words, awaiting some mega investor who has a real estate concept. In fact, the layout of all of Phase One looks more like an investment map than a master plan, and it seems this was intentional. School sites in residential areas are being heavily marketed for private language and international schools to set up branches.²³ Even foreign missions in Cairo are being pressured to buy up plots in the diplomatic quarter, although few embassies seem to want to move.²⁴ In fact, according to the chairman of the Administrative Capital Company, Ahmed Zaki Abdin, plans for Phase One are being reworked to cope with the massive turnout of eager investors, converting certain areas from residential to investment districts.²⁵

Map 0 : Indicative land use for Phase One of the administrative capital

Much hyped in descriptions of the new capital is its intention to be smart and digital, in tune with nature, and ecological and sustainable, with high-tech renewable sources of energy and the recycling of sewage water for its ‘green valleys’ and landscaping.²⁶ If this is the case, then why has Siemens just completed the largest thermal power plant in the Middle East in the new capital? And why, with the site being devoid of any source of water, are extensive green areas, artificial rivers, and water parks such prominent features? Arab Contractors is known to be working on emergency water lines leading from neighboring new towns, even though the closest and most prominent of these, New Cairo, itself experiences chronic water shortages. In October 2017 the Administrative Capital Company claimed that two new lines are being planned to convey 1.25 million m3/day to the capital directly from the Nile, but there is no information on these.²⁷ In the longer term it is probable that a grand new system will need to convey desalinated seawater from Suez or Ain Sukhna.²⁸ But this will be incredibly challenging, and a cubic meter of water delivered to the new capital will have a price that will be either be unaffordable to any but the rich or, more probably, will need to be heavily subsidized.

Population, housing, and employment in the new capital

The new administrative capital is set to have an ultimate population of 6.5 million inhabitants, and thus Phase One should have some 1.5 million inhabitants spread over its eight residential districts in a mix of apartment blocks and villas. So far only about half of Residential Zone 3 is under construction, set to be finished by the end of 2018, and apartment units (said to amount to 17,000 or 25,000 units, depending on the source) will all be between 110 and 180m2, with the average some 150m2 in size and containing three bedrooms, salon, and kitchen, plus two bathrooms, and parking underneath, with finishing super lux.²⁹ Such housing can be considered affordable for the upper middle classes, although their sales prices have yet to be announced.

As far as can be determined, there are no plans to include any of the highly subsidized 90-m2 units of the national Social Housing Program in Phase One. Even so, the chairman of the Administrative Capital Company claims there will be a range of housing units to suit all social classes, and that only some 35 percent of housing will be high-end compound units.³⁰ He mentioned that someone with a salary of EGP 8,000 per month should be able to afford a modest unit, as if such family income levels were common in Egypt and not something that only the top 10 percent of families enjoy.³¹ The pronounced bias toward the upper classes also became apparent in an attempt by the minister of housing to convince representatives of expensive international and private schools to set up branches in the first residential phase.³²

It is not at all clear how many government employees will be working in the various ministries and agencies of the new government quarter, nor where they will live. According to Hala al-Said, the minister of planning, only bureaucrats working directly for their respective ministers or those in the second rank (al-saf al-thani) will face reassignment in the new capital, and the armies of lower-level functionaries will continue to work out of the old ministries and state authorities in Cairo proper.³³ In fact, it was mentioned that only two or three high-level employees from each government unit or office would be transferred to the new ministry buildings.³⁴ If this is the case, then the government need not worry about how to house large numbers of state employees and compensate them for moving. However, this approach seems to underscore that the new capital aims to be the preserve of the well-off and well-behaved.

Such a bias is also true in terms of residential properties in the new capital. There are multiple indications that almost all of this housing will be created by private developers, aiming for the types of middle and high-end compounds that already characterize New Cairo and other satellite cities around Cairo. The first of these compounds was Palm Hills’ Capital Gardens, units of which were being marketed as early as mid-2016, long before ground was broken. Another is called Midtown, offering villas, town houses, and duplex units in a low-density gated community located near the planned Exposition City. Reservations for units were being accepted as of September 2017 for those who seek a unique and extravagant lifestyle, providing a safe and ideal environment to raise a family in a community of similarly aspiring neighbors. Units start at about EGP 2.5 million.³⁵ Even larger in scale, the Talaat Mustafa Group was reported by Reuters in April 2017 to have secured 500 feddans for an integrated residential development in the new capital.³⁶ In the same tendering some thirteen other companies were said to have presented bids, and it seems the rush is on for other prominent developers to secure large tracts of land. For example, it is understood that Emaar Properties of the UAE is in discussions to acquire an enormous 1,500 feddans of Phase One, at least according to Ahmed Zaki Abdin, chairman of the Administrative Capital Company.³⁷

Financing the new capital

Wild figures for the total cost of the new capital have been mentioned, usually in the range of USD 45 billion and up. Soon after the new capital was announced and even after both Alabbar and the Chinese bowed out, the message that the new administrative capital would somehow not cost the government any money appeared. In October 2015 the minister of housing (and chairman of the board of NUCA) declared that NUCA, which has its own finances independent of the government, would provide initial investments in the new capital and that there would be no pressure on the general budget.³⁸ This financing model was reiterated in several statements. For example, in March 2017 the same minister declared that the project is an economic-investment project, is thus outside the state budget, and will in fact contribute to state finances.³⁹

Nothing remotely resembling a financing plan has appeared, but it seems that hope is pinned on land sales in the new capital to cover infrastructure and public building costs, and also that through service charges and partnerships with developers there will be recurrent revenues to cover running costs. It is also not clear where the EGP 60 billion being spent on first-phase infrastructure is coming from, although it might be tapping NUCA’s piggy bank.

Early land sales will begin to bring in significant revenues. At a price of LE 1,500 per square meter, the Talaat Mustafa purchase amounts to LE 4.4 million, although payments are spread over eight to ten years at below-market interest rates. This land price is quite high, considering that on average only 30 percent of a large concession is buildable land. But, ever optimistic, the chairman of the Administrative Capital Company claimed in October 2017 that the going price is over double this, at LE 3,500 per square meter, and that some 1,600 feddans had already been sold.⁴⁰

During a press junket of the new capital in October 2017, it was revealed that the Administrative Capital Company for Urban Development would enjoy another potentially significant source of revenue. The company will finance the construction of the new government buildings, but in exchange it will take possession of the property of ministries’ buildings (sic) in Cairo and then either sell or rent them.⁴¹ Besides the fact that this may not be constitutional, the sale or lease of such assets will require them to be empty, which would contradict other statements that most government employees will remain at their current locations.

In any event, it is very apparent that the main financial model for the new capital (as well as, increasingly, that for NUCA itself) depends upon a continued scramble for land on the part of private developers. It is of course imperative then that the news coming out remains upbeat and that any hint that there might be a certain market reticence—let alone a whiff that there could be a speculative bubble—is carefully denied. And the issue does not just relate to the new administrative capital; plans for the continued expansion of the new towns around Cairo also rely on an inexhaustible demand from private investors who, in turn, depend on continued purchases—mostly upfront—by Egyptian families seeking attractive investment opportunities. It is thus understandable that the government will make all efforts to maintain the optimism, since otherwise financing for the new capital will need to call on significant allocations from the very strained state budget. Any hint of an impending real estate collapse or even market stagnation is to be avoided. A March 2016 statement by Nassef Sawiris (construction magnate and member of the richest family in Egypt) suggested that such a trend was in the offing: The growth in the real estate sector will continue until next year, and maybe the year after. After that, the sector is expected to enter a bubble, due to the ‘crazy profit margins’ and large number of developers that are operating in the sector. . . . He pointed out that all of these are indicators of an imminent crisis in the sector.⁴² Such warnings were repeated in early 2017 in an article entitled Egypt’s Real Estate Boom Has Turned from Economic Safe Haven to Rubble, in which it was pointed out that before the devaluation in November 2016 real estate prices were increasing by 30 to 35 percent per year, mainly due to family investors hedging against the inevitable collapse of the Egyptian pound’s value. But a few months on, construction costs have exploded, high-interest bank deposits have become an attractive alternative, and the market has weakened seriously.⁴³ The weakness in Cairo’s developer-driven real estate market was also underlined in a September 2017 Financial Times article that interviewed some major property developers and pointed out that high-interest deposit accounts that offer annual returns of 20 per cent are competing with property as a haven for wealth and savings, and that prices demanded by developers below the very top end of the market have breached levels of affordability and have entered into ‘bubble territory.’⁴⁴ Shouldn’t private developers and especially government officials be worried?

Evidently not, since there is eternal hope that the real estate market will continue without a hiccup, and that, as so often in Egypt, large foreign investors will come to the rescue. Many pronouncements are made and MOUs are being signed with Chinese, Emirati, and other Gulf investors, for projects in both the new administrative capital and the other new towns. But even should some of these materialize, they will in many cases involve large loans that will need to be guaranteed by the state, and, again, the ultimate exposure will be carried by the ever-strained state budget.⁴⁵

Justifications for the new capital

News reporting of the new capital almost invariably starts with images of downtown Cairo, with streets jammed with pedestrians, vehicles, and everything else. The sea of humans found in the street markets of Ataba, taken from the al-Azhar flyover, takes pride of place.⁴⁶ The main justification, oft repeated, is that Greater Cairo, with some twenty-two million inhabitants, is already over-packed with people and that the country’s population growth can only be met with alternatives in the desert. For example, commenting on the priority given by the government to the new administrative capital, the minister of housing claimed that the government has no other way to meet the demands of the growing population and to eliminate ashwa’iyat (informal housing areas). He was quoted as saying: We are 10 years late in launching the New Administrative Capital.⁴⁷

Time and again the congestion in Cairo is seen as something that development of the new capital will miraculously solve. None other than Prime Minister Sherif Ismail was quoted as saying that the new administrative capital will help reduce Cairo’s overcrowding and traffic congestion which are the kind of problems that would not go away without the government applying non-traditional solutions.⁴⁸ Whatever that means. The head of al-Azhar University’s Urban Planning Department also focused on congestion. Ali al-Biali said: As a result of a lack of proper planning, the new urban communities east of Cairo [New Cairo] and west of Cairo [6 October and Sheikh Zayed] have not played a proper role in solving the problems of congestion. Instead, they have almost become a burden. This had happened, he said, because the new districts were located too close to Cairo and thus had put additional pressure on roads and services. The idea of establishing a New Capital a suitable distance from the old one will alleviate the pressure on the old capital and redistribute the population. What? As we have already pointed out, the new capital will be anything but isolated and will instead form part of unrelieved, world-class urban sprawl. But Professor al-Biali is correct in saying that the current satellite cities around Cairo have already contributed greatly to general traffic congestion, vastly increasing both the number of motorized trips and the average distances that need to be covered.

In the same vein, it is somehow assumed that the new capital will present an opportunity to revive and rehabilitate existing Cairo. The oft-repeated refrain is that it will be possible to free up Cairo, ridding it of both government and the surplus population, so that it can be re-planned to accommodate future growth. Such a logic is predicated on first decanting much of the existing population, something that the new capital simply cannot achieve any more than the seven new towns around Cairo have been able to ‘empty out’ Cairo over the last thirty-five years, let alone absorb its population growth.

Another justification for the new capital is that it will be a center for innovation, for alternative energy, for state-of-the-art industries, for digital solutions, for world-class entertainment, and for sustainable development. And it will, of course, become a place for Egyptian youth to pursue their dreams. Such tropes relating to shining new city projects are common, whether in Zimbabwe, Indonesia, or with NEOM, a recently announced robot megacity in Saudi Arabia. One has only to look at Abu Dhabi’s example of carbon-neutral Masdar City, dubbed the world’s first green ghost town, to entertain serious reservations about such futuristic hyperbole.⁴⁹

In a wild use of logic, Ahmed Zaki Abdin, chairman of the Administrative Capital Company, managed to perceive the new capital as a way to make a break with Egypt’s longstanding over-centralization, even though grouping all government and financial headquarters in one single locale would seem to produce yet more concentration of power and further distance the government from its citizens.⁵⁰

Finally, security against terrorist acts is used as a rationale for the new capital, both for