What can $300 billion buy in Egypt? A new capital or a pipedream

Built from scratch to escape Cairo’s choking pollution, a planned new capital will feature an airport larger than London’s Heathrow, a building taller than Paris’s Eiffel Tower and more than 10,000 kilometres of boulevards, avenues and streets.

The city, meant to be built in just seven years, was unveiled last week at the Sharm el-Sheikh economic summit, where President Abdel Fattah al-Sisi urged foreign investors to help Egypt recover from the turmoil triggered by the 2011 uprising. But the plan was not universally welcomed, with Cairo residents questioning the need to replace their 1,000-year-old capital with a shiny new city that, if it ever rises from the nearby desert, will rely on Arab financing.

“If we need to move some buildings and some employees, that’s fine. But buildings don’t make a capital, history does,” said Amr Karim, a doorman at one of Cairo’s art deco buildings.

A number of countries conjured up new capitals in the last century, such as Brasilia in Brazil, which was founded in 1960, Canberra in Australia, founded in 1913, and Astana, which became Kazakhstan’s administrative centre in 1997. Egypt’s ambitions are on an even larger scale.

Its new capital is eventually designed to cover some 700sqkm, roughly the size of Singapore, contain 1.1 million homes and create 1.75 million jobs, according to its promotional website – www.thecapitalcairo.com.

It will also cost some $300 billion to complete, according to Mohamed Alabbar, the United Arab Emirates real estate tycoon who helped develop the Burj Khalifa skyscraper in Dubai.

To put that in perspective, Egypt’s total gross domestic product in 2013 was $262 billion.

 

Past failures

After removing Islamists from power in 2013 and becoming president a year later, Sisi has announced a raft of proposals, including an expansion of the Suez Canal, promising to usher in a new era of prosperity for Egypt’s 90-million strong population – some 9 million of whom live in Cairo.

With Cairo’s roads permanently clogged traffic and its housing crisis so acute that tens of thousands of people live among the tombs of the city’s necropolis, the possibility of starting with a clean slate seems appealing.

But it is not a new idea, and the precedents are worrying.

Ill-conceived ‘new cities’ have sprung up on the outskirts of Cairo before, only for many to end up largely empty or just housing the super-rich.

“This will only be for the wealthy,” said electrician Mohamed Hassan, 27, at a cafe in a rundown part of Cairo. 

Some Cairenes say the cash would be better spent on improving basic infrastructure in a country where more than one in four people live in poverty, according to the UN.

“I haven’t heard about the new capital. How can we afford a brand new city when we can’t afford new roads or schools?” said Mosaab Mansour, a student at a gym in a trendy Cairo district.

The glossy images on the project website bear a much closer resemblance to wealthy Dubai than they do to chaotic Cairo.

The authorities have promised to start work within weeks and Sisi, aware that street protests have helped bring down two presidents in just four years, is anxious for swift results in a country renowned for its sluggish bureaucracy.

Urban planners say for now the project is fuzzy about what kind of infrastructure will tie the new capital to Cairo – a major flaw that has doomed other “new cities” – and question how many people will actually relocate.

Yahia Shawkat, an urban policy researcher with an independent think-tank, said Egypt had already spent $8 billion on 21 new city projects in the last 30 years with mixed results. “There has not been any meaningful population movement ... and the average occupancy rate is about 20 per cent,” he said.

But investment banker Ahmed El-Houssieny, CEO of Planet Investments, disagreed with the many naysayers, arguing it was “a great cause to rally people around”, especially because it was meant to create a large number of jobs in a country where unemployment stands at about 13 per cent.

Responding to criticism that moving the capital will take away from the historical significance of Cairo, with its ancient Islamic architecture, mosques, Citadel and bazaars, he said: “You have lots of great cities that have been able to drive traffic away from the centre and still maintain the capital’s glory,”

Clothing store owner Rami al-Rafie was also optimistic. “This is a great idea, it’s been a great idea since it was proposed years and years ago,” he said, referring to past plans to shift major ministries away from downtown Cairo.

“The Gulf, the Europeans, the Chinese all know that Egypt is a good place to invest... I hope they use some of that investment to make this new capital as beautiful as Dubai, God willing.”