Can the government promote medium to small investment? The bulldozing of six factories in Qattamiya, reports Yasmine Fathi, makes the question all the more controversial Can the government promote medium to small investment? The bulldozing of six factories in Qattamiya, reports Yasmine Fathi, makes the question all the more controversial The story transpired overnight: one day the factories were there, the next they had been bulldozed to the ground. "They went in with their bulldozers and destroyed my factory just like Sharon in Ramallah," George Iskandar, owner of the Investment Company for Refractories and Ceramic Industries, told Al-Ahram Weekly. "Every piastre I have made since I was born is gone. But can you complain to the government about the government?" Iskandar's factory was one of six bulldozed to the ground overnight by the area's land-distribution authority, the New Communities Organisation -- NCO -- of the New Cairo City Authority. The reason, it announced, was the investors' inability to prove their commitment to developing the land. The issue began in the mid-1990s, when the government -- through the designated authority -- offered subsidised land through the allocation system ( takhsees) in the Bdael Al- Toub area of Qattamiya on the road to Ain Al-Sukhna. "Through this system the government provides land to investors at low prices," explained a lawyer at the Land Centre for Human Rights -- LCHR -- asking that his name be withheld. "In return they are expected to make use of the land by reclaiming it or building a project on it," he said. With land going for as little as LE7 to LE12 per metre, control mechanisms are high, with regulations stipulating that investors be given a grace period of three years, during which they are required to prove that they are using the land adequately and diligently for their projects (ithbat geddiya). Failure to properly utilise the land results in its revocation. The investment is literally that of a lifetime, and in collaboration with the governing authority, the investors usually see through a heavy bureaucratic process in order to obtain the necessary legal documents and begin the building process straightaway. The investors were meticulous in making sure that every necessary paper was signed, filed and put in place. "We were putting all our life savings into these projects," Iskandar told the Weekly. "This was our life. We didn't want to make any mistakes. I paid my taxes and got my license, my taxation card, the trade register and the industrial register." The foundations were laid, and construction began to take place, with full-fledged factories up and running in impressive time by local standards. In 2001, however, a trickle of warning letters was sent to the factories. If investors did not start working on their land within the coming three months, the authorities said that their allocation permits would be withdrawn. "But how can we start something we never stopped?" Mohamed Mady, chairman of the Qattamiya Active Pentomite Company, told the Weekly. "Our factories have been running and producing for the past eight years." According to Mady, the letters came after sporadic assessments by the NCO of the facilities conducted at strategic times -- generally, when production was slow, or at a halt. "They always sent their officers to carry out assessments on holidays like Bairam, Easter or Christmas, and then they would write in their reports that we are lazy slackers who are not using the land," Mady said. Armed with their legal documents, the investors headed to the minister's Council, headed by Youssef Wali, minister of agriculture and land reclamation, Mady told the Weekly. Wali promptly initiated the formation of a committee to investigate the matter. On 13 December 2003, however, the investors received a letter from the minister's Council approving the organisation's decision to remove the factories. Less than three weeks later, on 31 December, the investors received a follow- up letter from the organisation in the form of a one-week notice to remove all their equipment before the factories were demolished (qarar ezala). "First they bulldozed the 520-metre wall around the factory," said Iskandar. "I rebuilt it only to have it bulldozed again by those savages. Then they bulldozed the storerooms, then my factory," he said, with the pain of lifetime loss clear in his expression. The other factories, he explained, followed suit. Bewildered, and unable to grasp the committee's approval of the NCO's request, the investors requested the recommendation report that had been produced by the committee. Access was repeatedly denied. When they made the request at the administrative court, they received a ruling in their favour. "When we got our hands on the report, we understood why they [the organisation] had initially refused to give it to us," explained Mohamed Khalil, Chairman of the EL-SONNY Co. for granite and marble. "It stated clearly that after visiting and assessing every factory, they found them to be productive, and therefore the organisation's decision to remove the factories demands consideration." The committee also asked the organisation to give the investors a reasonable period to rebuild their factories and resume their activities, on condition that the factory owners drop all their legal suits against the organisation. "How can the minister's Council produce a report in which they affirm that we have proven our productivity and ask the organization to let us rebuild and resume be followed by a letter also from the Council stating that they approve of the organisation's decision to remove the factories?" Iskandar asked. "Where did this contradiction come from?" Al-Ahram Weekly repeatedly approached the office of the minister's Council but they refused to comment. According to the lawyer from LCHR, the minister's Council needed no more than the official papers of the investors to prove their commitment. "The fact that they pay their taxes and have insurance papers and documents to show for business deals and exports should confirm that they have been active," he said. Further, according to the lawyer, Article 16 of the private real estate regulation law for the NOC stated that the investors are required to prove their commitment only if they are provided with infrastructure and utilities -- which in this case they were not, given that they had to face the obstacle of creating the foundations for a successful industrial conglomeration on deserted terrain. "We bought the land without water, electricity, sewage or roads. We had to provide this infrastructure ourselves, and this proved to be very costly. For example, an electric supplier cost approximately LE60,000 to LE70,000," Khalil told the Weekly. "And of course due to the deserted nature of the land it was difficult to hire workers. You tell them go 40 kilometres into the desert where there is no electricity or water, where they would have to sleep with the scorpions and where there is no police to provide protection from the bedouins who might steal their money. Who on earth would agree to such conditions?" Khalil reasoned. The LCHR lawyer said that the investors gave more than their fair share: "The fact of the matter is that these businessmen gave more than they were required. They bought their utilities with their own money, meaning that they saved money for the government and the country. It is the organisation that didn't honour its side of the bargain." The battle constitutes not just a lifetime loss for the likes of Iskandar and Khalil but it also raises many questions in their minds. As a university student, Iskandar was sent to study for eight years in Germany. There he studied the development of industrial furnaces for melting metals and refractory materials. "The government sent me on a scholarship and spent money on me so that I could learn and then use my knowledge for the good of the country," he told the Weekly. "So what is this fight about?" The issue is also puzzling given the industrial value of the now demolished factories. "George [Iskandar] spent years in Germany in order to obtain the expertise to manufacture those refractories -- a specialisation that a few have," Mady explained. "Similarly, my factory creates active pentomite which is rarely manufactured in Egypt," he said, elaborating that the investment came solely from their own money, without the hefty bank loans which numerous business magnates are infamous for taking out. The question, of course, is why the sudden bulldozing. "We obviously don't have a clear answer," Saleh told the Weekly. "The land in the area has become very expensive," he said, explaining that it now costs LE350 per metre, and its price is rising as a result of the building of the Ain Al-Sukhna port. Given Qattamiya's blossoming as a jet-setter residential locale, he offered, perhaps the government circled the area as a potential gold mine. The LCHR lawyer emphasised that this was more than just a case of dreams turned to dust. "The government gave these people the land as a way to encourage investment. A growth in investment would mean the manufacturing of national products, a decrease in import activities, the increase of national income and the creation of jobs that would help reduce unemployment. When the investors tried to do just that, why did the government bulldoze their efforts to the ground? This is a massacre of the Egyptian economy," he said. With their savings now gone and with the prospects of rebuilding becoming so costly, the investors' hopes for an industrial rebirth seem unattainable. They are collectively taking legal measures in order to try and reclaim their rights.
