(AFP photo)
The committee of dispute resolution affiliated to the cabinet completed the settling of the dispute between the Saudi-Egyptian Red Sea Investment Co. and the Red Sea governorate regarding the Sheraton Hurghada hotel.
The agreement between the company and the governorate states that the company should pay the governorate EGP 30m in exchange for a waiver of all cases filed between the parties.
According to the agreement, the Saudi Egyptian Red Sea Investment Co. waived 16 lawsuits filed in court, in addition to one arbitration lawsuit in front of the Cairo Regional Centre for International Commercial Arbitration (CRCICA).
Abdel Aziz El-Shahil, Managing Director of both the Saudi-Egyptian Red Sea Investment Co. and the Saudi-Egyptian Company for Tourism Development, said that his company will commit to transferring the current road, which is close to the sea, behind the resort, at a cost of EGP 20-30m.
The Red Sea governorate is committed to approving the company’s licenses within two months.
Saudi Egyptian Red Sea Investment Co. bought the hotel in 1993 for $15m, with the price of the meter reaching $40.
He added that until 1998, $26m were spent on the hotel, while government entities refused to grant the licence needed for operating the hotel.
“We acquired the hotel through a public tender by one of the Kuwaiti companies, and another one by an Egyptian company, at $30 per metre, while the two companies bought the hotel for EGP 4 per metre,” said El Shahil.
The land area of the hotel is at 344,500 metres, almost 82 acres, according to El-Shahil, who added that the company plans to start developing the hotel with investments up to EGP 2bn.
Work at the hotels has been halted since 1998, and this hampered 1,500 job opportunities, in addition to the millions in tax income that would have been directed to the government for operating the hotel.
The company is working on diversifying tourist activities in the Sheraton Hurghada resort. Timeshare units and tourist housing units will be built, as well as five palaces and a marina for tourist yachts, according to El-Shahil.
He affirmed that 50% of the hotel was self-funded by the company, and the rest of the fund would be through loans worth EGP 1bn from Al-Ahli United Bank.
“We will start the construction works on the hotel once we get the approvals we need,” said the managing director.
Hussein Sabbour Consulting Bureau (HSCB) was assigned as a technical consultant for the project.
The company also owns Le Meridien overlooking the Nile in Cairo, and plans to pump investments worth EGP 3.7bn to establish entertainment towers, show halls and hotel apartments. The towers will have an area of 14,600 metres.
