This is the story which just keeps on giving.
The Army is developing the new administrative capital and with 20 lane highways – bit odd for a country with some of the lowest car ownership in the world. Maybe it will be useful for military parades if they can ever get the sand out of the Abrams tanks. They were told they were designed for a war in Poland and Australia worked out years ago they were no good in a hot rough climate. They are not so good for parades because at 68 tons they rip up roads and destroy most bridges.
Back to the main game. Al Ahram says the army will be managing the whole shebang:
“The targeted population for the new city was five million, said Ayman Ismail, chairman of the Administrative Capital for Urban Development (ACUD), the company in charge of developing the project”
“ACUD is a private company with government ownership (how does that work), explained Ismail. It is owned jointly by the army and the New Urban Communities Authority (NUCA). He said that an initial public offering of the company would be carried out soon, the idea behind the current formation of the company being to give it the freedom to move fast.” http://weekly.ahram.org.eg/News/18998/1 ... y----.aspx
Wonder who will pocket the IPO sale proceeds. There probably won’t be a war over them because the new chief executive of the ACUD is a brigadier general: http://www.thenational.ae/business/econ ... bal-effort
. Wonder what his experience in property development is.
Their Chair, Ismail, is a pup who heads a very private family firm that does high end residential gated developments in Egypt. He has unique experience in both the rotting of and the saving of teeth and worked in senior positions both in Pepsi and in oral care at Proctor, but not at the same time. He seems to be well qualified for the job, in an Egyptian type of way, with no conflicts of interest and a career based on consistency and integrity. His facebook page is something else and the ACUD promotional website egyptthefuture has not paid its dues and is up for sale.
But back to the specialists in city development. The New Urban Communities Authority has a long track record of failure and reinforcing that failure including New Toshka and New Qena. https://en.wikipedia.org/wiki/New_Urban ... _Authority
. Not deterred by previous agricultural failures it also seems to be the lead agency in the ‘controversial’ 1 million, or is it 1.5, feddans project for which many say there is no water. http://www.dailynewsegypt.com/2015/05/2 ... en-hassan/
Its organizational structure is like something out of Kafka or Soviet Russia: http://www.newcities.gov.eg/english/abo ... nal.jpgand
and is strangely silent about the actual identities of any of the board members and executives. They are a shy lot because the only person who ever makes a public statement is a junior communications flunky.
The Soviet model is pervasive: the Authority determines where most Egyptians will live in new houses and all the terms on which this will happen.
Oddly, even for Egypt, its org chart has the Minister reporting to the Authority Board. Maybe a moment of truth. On their achievements page they do not include any actual photographs of actual housing builds – just computer images. They also build thousands of factories but have real photographs of these. Why does the Egyptian taxpayer build factories?
It’s a big organization with a primary mandate to benefit the less well off and with revenues now approaching E100 billion a year. http://www.dailynewsegypt.com/2014/11/2 ... president/
. They have built/are building nearly 30 cities, housing/will house tens of millions. By way of comparison its yearly expenditure is 4 times total national education expenditure and 5 times health. It looks after itself with its employees earning three to four times, on average, the wages of health and education workers. By way of contrast with where almost everyone lives, total national urban renewal expenditure is about 2.2% of the Authority’s – although the 2.2% does not include infrastructure costs: but the message is clear, let the old fall down and move to the shiny and the new – if you can.
They don’t produce an annual report or audited financial statements although the recently dismissed government auditor alleged the Authority responsible for corruption on a pharonic scale and the very worst in government: http://www.madamasr.com/en/2016/07/05/o ... orruption/
Like much in Egyptian government they are policy developer, regulator and commercial player at the same time which must give rise to some tricky conflicts of interests and vexed relationships with the commercial players in the sector. Equally, their combined umpire/player/coach/FA Board/scorekeeper/stadium owner role may create opportunities such as those documented by the former auditor.
They frequently use the army to build middle market housing – most likely for profit – but who knows what is for social purposes and what is not. http://www.egyptindependent.com/news/ne ... -year-plan
Unsurprisingly, some people think they are up to no good and their strategy of building endless, and always uncompleted, ‘new’ cities ignores the problems of the run down existing areas where most live and also ignores the interests of the less well off. http://www.tadamun.info/2015/12/31/egyp ... t/?lang=en
. Some even suggest that their effect is to benefit the well off.
A significant point in this sober article is the Authority practice of never publishing a cost benefit analysis for any of its many projects over 4 decades.
Where they do publish targets there is reason to doubt that they were even remotely achieved. After decades the failure rate against their own targets seems to be close to 100%. Worryingly, even in mature projects like 6th October and (old) New Cairo, only 25% of population targets are allegedly met decades after project start. Some newer starts are at single figures after quite a few years. This allegation is confirmed by the government’s own stats agency, CAPMAS, which states their most successful project is at 27% of target.
Whilst development projects take years to fill you would think, given population/housing pressures and the maturity of some of the projects, that a product people wanted would sell itself. Seems not. Nevertheless the Authority ploughs on undeterred.
Another sign of failure is their objective of reducing traffic and human pressure on the older cities. To do this their stated aim was to build self sustaining new cities with jobs and industries. This has not happened and the majority of their new cities are just dormitory suburbs where residents still commute, invariably without public transport, to the old downtowns. This makes traffic worse not better.
The article makes the point that it is statute which prevents poorer people from getting a mortgage. As of 2015 50% of Egyptians are prevented by law from getting a housing loan from a bank which has the possibly not unintended effect of making the poor dependent on government housing ‘gifts’ and freeing the banks to do their main job – loans to the government.
The Authority conceals its true purpose when it claims it builds middle income housing. In reality their published housing costs when compared with government income data show its affordable only by the upper class which raises the question of why government is using taxpayers to help them.
Even where they aim to build housing for poorer people there is independent evidence that the well off end up corrupting the system and get it. In any event the Authority defines poor people as including those in the top 20% of incomes in Egypt.
Where they build lower income housing in new cities its alleged these are furthest from social infrastructure whereas the better off are front and center. In some cases utilities may not be connected at all.
Even where they spend big on schools and other social infrastructure in their new cities failure follows. The new cities with the highest social infrastructure investment have the lowest populations of 4%, 6% and 10% of target. There seems to be nothing they can get right. Paradoxically, it’s a bit unclear at this point, expenditures on schools etc in these new cities may be multiples of the national average per capita which makes their emptiness more baffling.
The Authority likes control. Although their statute says that once their work is done they should hand over to elected municipal government, they have never done that over the decades – with one possible exception, so no elected body has been able to take responsibility and pronounce on the Authority’s ‘achievements’.
Based on the above its not unreasonable to conclude that their actual effect has been to build housing primarily for the well off, using public funds, whilst parading as helping the poor and they have been doing this for decades whilst building empty cities even few of the middle classes want to live in. Its likely that in 4 decades they have not experienced anything even close to operational success let alone social utility or justice. They were warned at the time. Technical US and French studies presented to government stated that the new cities strategy was wrong-headed from the very beginning. They both said fix up the existing cities first.
Further reading at: http://wsb14barcelona.org/programme/pdf ... /P-191.pdf
and http://www.sciencedirect.com/science/ar ... 9013000125
and on New Toshka:
https://www.madamasr.com/en/2016/08/12/ ... a-project/
and why the new cities are environmentally unsustainable: http://tn.boell.org/en/2015/05/11/new-c ... ia-shawkat
and on braided land development https://www.madamasr.com/en/2016/04/26/ ... ypts-land/
although, for the purposes of balance, it should be stated that Mada are invariably not sympathetic to current arrangements.
The Authority has never publically responded in even slight detail to any criticism, and no-one else has defended it, so it is not possible to post anything in its defense.