CEO of the National Company for Construction and Development Mahmoud Hegazy said that his company will reconsider its investments in joint venture companies in light of weak incomes in fiscal year (FY) 2013/2014.
On the sidelines of a conference to launch a committee to manage investment assets, Hegazy said: “Our investments in joint venture companies amounted to EGP 1bn with revenues of only EGP 40m.”
He revealed an agreement with the minister of investment to suspend sales for land owned by affiliated companies like the Misr El-Gedida Housing and Reconstruction Company in order to reconstruct and develop them in partnership with the private sector.
“The Arab Consulting Office will be an exclusive consultant for all government companies,” said Hegazy, who considered the move a step toward increasing the office’s diminished resources. The office will be supplied with engineers and experts from the private sector and has the right to employ help from other consulting offices within the private sector.
Hegazy explained that an agreement has been made with the investment ministry to transfer the liquidation process of 12 companies that have been liquidated for 15 years to the new assets management company.
Hegazy added that his company decided to restore the United Poultry Company from liquidation, enabling it to produce eggs for households. He said that his company is also willing to invest its real estate portfolio through partnerships for residential projects, explaining that employment will be equally distributed across the companies under liquidation.
Hegazy revealed that South Valley, a subsidiary of the National Company for Construction and Development, has finished reclaiming 30,000 acres in Toshka at a cost of EGP 900m. Negotiations are currently under way with the Ministry of Agriculture to market a large part of these lands out of a total of 120,000 acres belonging to the company in Toshka.
Wabour Al-Talg is a subsidiary of the Alexandria Cooling company which was liquidated and transferred to the Governorate of Cairo and turned into a street vendors market, and Hegazy said that an agreement has been made with the Governor of Cairo to obtain alternative land plots at the same value as Wabour Al-Talg’s land.
“I received the final evaluation of Wabour Al-Talg land and the alternative land suggested by the Cairo governorate on Monday. A meeting will be held within days and will be attended by representatives of the investment ministry, the Cairo Governorate, and evaluation committees in order to implement the process of receiving the alternative land plots,” said the Minister of Investment Ashraf Salman.
Hegazy said that his company is considering a partnership with subsidiary contracting companies like Hassan Allam and Mukhtar Ibrahim in Gaza reconstruction efforts with government approval.
He continued saying that in the future both companies will work as developers in fields of industry and real estate. But Mukhtar Ibrahim’s company’s debts have exceeded EGP 500m and reached their maximum under the pressure of employment inflation and slow business. He added that his company is considering paying those debts.
Hassan Allam’s debts are estimated at EGP 400m, but are not a cause for concern as Hegazy’s company’s has the capacity to take on more, he said.
Hegazy added that the Minister of Investment has promised to work toward changing the activity for some lands to residential instead of industrial based on characteristics of each area in order to manage and develop them easily. He asserted that municipalities will hinder the change of activity as they obtain 30% of the value of lands that change their activities for the purpose of investment and development.
