The New Administrative Capital, Another Failure In Al-Sisi’s Delusional Mega Projects

Abdel Fattah al-Sisi has pledged to carry out mega projects for the Egyptians , but nothing remained from these promises except the statements found in the scraps of newspapers and the web, which proved in the last few months that the matter was only an advertising material.

The last of these projects is the New Administrative Capital, which has been frozen upon direct directives from al-Sisi, a source in the presidency told al-Arabi al-Jadeed.

According to the source, the work on the project was frozen for reasons related to the government inability to provide the necessary funds for resuming work.

In fact, this crisis might threaten other important projects, such as the new Alamain city, new city of Ismailia, and the national roads project.

Since al-Sisi reached power, he announced his intention to implement a number of major national projects as the new administrative capital, the new Suez Canal shunt, the national roads projects, the national project for electricity, new cities and social housing projects, the golden triangle, the nuclear project, the fish farming project, and the global logistics center for grain.

Another official in the Egyptian cabinet said, “There are instructions from the president to stop work on any new construction project in the new administrative capital, and to complete only some of the buildings that have already started – based on the agreement with an alliance of Chinese companies that will receive a loan of 3 billion dollars from Chinese banks. ”

The official, who preferred to remain anonymous, said that the that shortfall in funding has prompted al-Sisi to halt the completion of the administrative capital project.

The government has planned to construct the new administrative capital with a cost of $90 bn between 5 to 7 years and it will include 1.1 million housing units before they withdrew from these plans in the light of conflicting statements released by officials about its construction.

At an earlier time, Egypt’s Prime Minister Sherif Ismail surprised everyone when he dropped from his government program that he presented on March 27 to the parliament, the project of constructing millions of housing units with a cost of $40 bn although it was one of al-Sisi’s cornerstones of his electoral campaigns.

Moreover, the reclamation of one million and a half acres was one of the fallacious projects that al-Sisi also promised to carry out once he reached power more than two years ago. The project underwent many crises related to the lack of water, the cost, the infrastructure and others that observers and specialists have previously warned from.

All these obstacles were ignored by al-Sisi when he declared this huge project that contributed to promoting his political regime. Al-Sisi had announced as part of his electoral campaign that he will reclaim one million and a half acres during the first year of his term.

More than two years have passed since Al-Sisi took office, and 10 locations with an area of 1,000,018 thousand acres were selected and water analyses were conducted, but the project has not been implemented so far, especially after representatives of the World Bank refused to fund the project due to the lack of concrete studies on how to supply enough water to irrigate these areas.

On August 6 2016, al-Sisi celebrated the anniversary of the opening of the new Suez Canal shunt, a project that cost nearly $ 8 billion, equal to more than 100 billion Egyptian pounds, according to the current price of dollar in the parallel market.

Al-Sisi described the project as an “achievement” which was able to increase Egypt’s dollar revenues by 4%, a statement that is far from reality. Reuters cited Nagy Amin, the director of the Planning Department at the Suez Canal Authority, during last January saying that the Suez Canal revenues in dollars have declined by 5.3% during 2015 compared to the revenues in 2014.

The decline amounted to $290 million dollars (which is equal to 3 billion and 596 million Egyptian pounds). The decline in Suez Canal revenues was not the only problem caused by al-Sisi project, but accomplishing the project in a speedy way and assigning foreign companies to carry out the excavation and dredging work which were paid in foreign currencies led to acute shortage of foreign currency, as announced by Hisham Ramez, the former governor of the central bank of Egypt, in October last year before he resigned.

Accordingly, the project led to the depletion of foreign currency which led to a historic hike in dollar price compared to the Egyptian pound. The dollar exchange rate has reached 14 Egyptian pound, after the price recorded 7.17 pounds, before al-Sisi reign.

In addition, despite signing the nuclear plant project between the Egyptian and the Russian government, the project has not started yet although the agreement included the payment of part of the $25 bn loan last April.  As a result, speculations increased about withdrawing or freezing the project.

With regard to the fish farming project that was announced by al-Sisi last August, targeting the construction of the biggest fish farm in the Middle East, east of Port Said on 23,000 acres with international standards.

But the project has not been implemented so far because the law prohibits constructing fish farming projects on agriculture land, and limits irrigating fish farms with sewage water.

Among the long series of misleading projects, declared by al-Sisi, is the national project for roads.Despite al-Sisi’s announcement early in his term in office that  the project for constructing the national network of roads will take one year, yet the government has not achieved any progress in this project because of the weakness in fund resources and the fiscal crisis in the country.

In the same context, the Golden triangle -the mining project in Egypt’s eastern dessert that extends along Edfo area in the south to Marsa Alam on the Red Sea coast to Safaga in the north- was subjected to a noticeable negligence.

Amr Adly, the economic expert at Carnegie endowment- said in statements published in El Pais-Spain’s largest newspaper- that “it has been clear that the mega projects didn’t achieve the desired results, or even support the economy and rebuild it in order to attract foreign investment. “He added, “The imbalance in the domestic economy and currency, is still there, but the situation has deteriorated during the past two years.”

In addition, “since the military coup that brought al-Sisi to power, the GDP recorded weak growth due to the decline in tourism and foreign investments as a result of political instability. ”

The newspaper also pointed that freezing the new capital project in the middle of the desert; is one example of several failures that hit the projects planned by al-Sisi.

In addition, the former scientific advisor to al-Sisi Essam Heggy said in an interview with Al-Jazeera TVChannel that these projects were initiated “in a state of collective madness”, and described these projects as being “delusional and irrational and based on hypocrisy.” He also blamed the current regime of being responsible for the collapse of the Egyptian economy and marketing illusions for the Egyptians.