Coronavirus outbreak in the New Administrative Capital

General Abdel Fattah al-Sisi has postponed the activities and inaugurations of major national projects that were scheduled during the current year until next year, including moving the government and ministries to the New Administrative Capital. This decision came during al-Sisi’s meeting with the Prime Minister Moustafa Madbouly, and the Minister of Housing, Utilities and Urban Communities Assem el-Gazzar, to discuss the implications of the coronavirus outbreak.

This decision is the latest evidence that coronavirus has harmed the Egyptian national projects that al-Sisi is seeking to implement, despite the government’s repeated denial that those projects have been affected by coronavirus. Fathallah Fawzy, the head of the Construction Committee of the Businessmen Association, said that Sisi’s decision is “more than wonderful,” in order to allow all companies to complete their projects in the administrative capital as best they possibly can. But he admitted at the same time that the governmental district, which was scheduled to open next June, needs a period of not less than 10 years to be completed, according to Al-Masry Al-Youm. He added that in light of the spread of the virus, it was difficult to open even a section of it, pointing out that work has stalled in the governmental district, which includes ministries, parliament buildings, and other financial and commercial institutions. Fawzi pointed out that “the period necessary to complete the ministry buildings that were scheduled to open after about a month and a half, may need a period of more than a year from now, so the decision to postpone the opening of the administrative capital project was correct in light of the crisis that the Egyptian state faces.”

But another problem facing the New Administrative Capital is that the Egyptian real estate market is experiencing a crisis not seen before, due to the outbreak of the coronavirus. Sales rates in some new cities have fallen to zero. The sharp decline in demand was more pronounced in units whose prices exceed EGP 1 million ($64,000). The new capital was hit hard since it is houses some of the most expensive real estate. Sales at the new administrative capital fell to almost zero, and sales also reached zero in El-Shorouk City, and one per cent in most areas of 6th of October city, and five per cent in the Fifth Settlement and Maadi.

Some Egyptian real estate companies offered a 10 per cent discount on the unit price sold in installments, while some properties allowed the unit to be reserved for a period of six months without any payments or installments during this period. The latest government report issued by the Ministry of Housing and Urban Communities revealed that the prices of building materials decreased in March 2020, compared to their prices in the same period in 2019. The price of rebar decreased 17.6 per cent, cement 8.2 per cent, aluminum 35.5 per cent, glass 5.3 per cent, iron water pipes 12 per cent, plastic paints 4.1 per cent, insulated copper wire 10.1 per cent and flexible plastic hoses 3.2 per cent.

On the other hand, the prices of gypsum, ready-mixed concrete and most electrical supplies were stable, while the price of sand increased 7.7 per cent, oil 12.5 per cent, clay bricks 5.6 per cent, cement bricks 3.8 per cent, beechwood 4.5 per cent, and propylene pipes 10.2 per cent. But despite this there is little return given the high costs of worker safety, falling sales and market paralysis.