Egypt settles dispute with Damac
Settlement involved two projects in New Cairo and a third near the Red Sea
Cairo: Egypt settled a prolonged dispute with Dubai-based developer Damac Properties over some of its projects there, an agreement the North African country hopes will help rebuild its credentials as an investment destination.
The country’s economy has suffered in the past two years since the toppling of former president Hosni Mubarak amid political unrest that also slowed foreign investments.
The settlement with Damac involved two of Damac’s projects in New Cairo and a third in the Red Sea area, a spokesperson for Egypt’s government said. Agreement terms include Damac withdrawing an international arbitration case it had filed against Egypt.
The Dubai-based developer had filed an international arbitration case against Egypt in 2011 over the conviction of its owner and chairman Hussain Sajwani, who was sentenced in absentia and handed a five-year prison term over a Mubarak-era land deal in the Red Sea area. The case also found Zoheir Garranah, the former tourism minister, guilty of selling state-owned property at an underpriced value.
Many Egyptians blame Mubarak’s ousted regime for squandering public funds and selling state property too cheaply for personal benefit. Since his removal in 2011, several cases have been filed against people linked to the former regime for exploiting their power. But some of these allegations have been strongly questioned as being politically motivated.
Ownership of the land will be restored back to Egypt, the government said this week. It expects the agreement with Damac will spare the state from international arbitration risks, maintain its image abroad and reassure investors — encouraging them to complete projects and pump more money in new projects in the country.
A Damac spokesperson told Zawya Dow Jones on Thursday that the company was happy with the settlement, saying “this is an amicable solution”.
Analysts say Egypt’s settlement with Damac is a step in the right direction for the troubled economy, but more needs to be done to convince investors in the longer term.
“Other issues have to be resolved with other developers to bring confidence. Other disputes with local developers would bring back even more trust in Egypt’s market,” Monsef Morsy, deputy head of research at Cairo-based Pharos Holding, said.
