Incentives to both investors and residents will hopefully bring more life to Egypt's new cities, Sherine Nasr writes Two decades have already elapsed since the establishment of the first industrial zones, namely 6th of October and Al-Sadat cities. Other projects on this model were established later, and there are now at least six new industrial cities situated at various distances from Cairo, including 10th of Ramadan, 15th of May and Al-Obour. Originally, these cities were planned to function as comprehensive industrial centres that would later develop into fully urbanised cities with the most up-to-date utilities and services. "The ultimate goal was thus to develop new cities, mainly around Cairo, that would attract more citizens and work as a buffer zone to the already overpopulated capital," says Hani Mustafa, head of Al- Sherouq City Council. Unfortunately, only half of the equation has been fulfilled: Many of these zones have managed to emerge as well-established industrial centres, but none has so far attracted the population that would allow their development into fully-fledged cities. This is one of the main reasons why the government has lately taken a package of decisions that are intended to attract increased investment and urbanisation to these cities. "The most important of these decisions is to offer a 40 per cent discount on the price of the land allocated to small and medium- sized workshops which are not more than 300 square metres," says Mustafa, adding that the square metre now sells for LE50 instead of the LE110 it actually costs, including utilities. "Moreover, the buyers will be able to pay in long-term instalments," he specifies. Buyers who have been allocated land but have so far failed to build their workshops will now be able to return the land at a lower penalty rate. "They will pay 0.05 per cent of the value of the land, instead of the much higher one per cent," Mustafa explains. "The old rate was a real burden that only helped to keep many areas unutilised." Moving on to address the housing dilemma in these cities, many discouraging regulations have been overturned, particularly those regulating low-cost and youth housing projects. "Owners of low-cost apartments in these cities are now able to rent these units out. In the past, this was completely forbidden," says Mustafa, who adds that the aim is to provide more housing units to young couples and to make better use of the many housing units that were allocated but have never been utilised at their full capacity. But that is not all. Another vital decision has been made to reduce the price of land allocated for housing projects in these cities. "The decrease varies from 25 to 30 per cent of the actual price of the land, according to the city," explains Ashraf Mahmoud, head of the 10th of Ramadan City Council, who adds that this move will definitely encourage more people to buy land for housing purposes. "We would like to encourage the concept of the family home once again," says Mahmoud. "Providing public utilities and services such as schools, hospitals and shopping centres will surely help encourage more families to move to these new cities." Moreover, the exaggerated penalties that owners of subsidised apartments had to pay in the past if they had to give their apartment back have now been reduced to a minimum. "Moreover, the interest rate charged by banks on the loans provided to citizens to rent these apartments have also been lowered," says Mahmoud, who explains that the majority of these apartment blocks were fully subsidised by the government. "The housing project would be completed through bank loans. Buyers would then pay the instalment plus the bank interest to the city council, that acted as a guarantor between the bank and the owners." According to the old system, those who wanted to give back their apartment and get their money back had to pay seven per cent of the total cost of the apartment for every year it had been allocated them for. "That was one of the greatest impediments facing people living in these apartments before. Many wished to get rid of the units they had been allocated, but could not afford to," explains Mustafa. "As a result, people kept their apartments, even though they weren't living in them, while others were searching in vain for suitable housing at a reasonable price." Hoping to mainstream these decisions, the heads of the city councils concerned have been given unprecedented powers to facilitate instalment collection, loan re-scheduling and allocation of apartments, shops and workshops. "For example, we are now able to reschedule the debts of defaulters. The grace period has been extended to two years instead of just four months," says Mustafa. Other measures have been taken to facilitate the procedures necessary for issuing licences, allocating land and apartments and renting shops. "The City Council will be the main authority issuing these licences, as well as other permits," Mustafa explains. "Investors will no longer have to deal with a handful of bodies in order to get their papers in order."
