Arabtec has denied a media report saying it is withdrawing from a $40bn contract to build a million new homes in Egypt, claiming that negotiations are still underway.
The Dubai-listed contractor was responding to an article in Arabic media on Tuesday claiming that the builder was preparing to announce its withdrawal from the mega housing project and from Egypt altogether very soon amid its financial difficulties.
Arabtec is fully committed with disclosure and transparency rules, and will disclose any substantial information concerning the project in due course– Arabtec statement
A statement dated today from Arabtec’s executive vice president Hasan Abdulrahman Al Sirkal to the Dubai Financial Market said "the company denies its withdrawal from the housing project in Egypt, and reaffirms that it’s still discussing some related details with the Egyptian’s concerned parties."
"Arabtec is fully committed with disclosure and transparency rules," the statement continued, "and will disclose any substantial information concerning the project in due course."
Arabtec was awarded the remarkable contract to build a million affordable homes in March 2014, with construction due to begin in the third quarter of that year, but the scheme has been delayed.
Another media report in May this year also claimed the scheme had been cancelled, but this was denied by the Egyptian housing minister Mostafa Madbouly.
On 15 August Arabtec announced a loss of just over $271m (Dh998.1 million) in the first half of this year, compared with a profit of $65.4m (Dh240.3m) in the first half of 2014, which it blamed on "a number of poorly performing projects" and "the continuation of the difficult trading environment".
The company said that it was "taking corrective action in response to these legacy issues", and implementing "an extensive restructuring programme".
According to UAE newspaper The National, the first phase of the home-building programme includes building 100,000 low-cost homes in the cities of Obour and Badr to the east of Cairo.
But talks have stalled over the percentage of completed units that Arabtec should deliver to Egypt in lieu of payment for land used in the project, the newspaper reported.
Arabtec said in April that it was in talks with local and international banks for the financing of the first phase of the project, according to The National.
Photograph: Rundown buildings in crowded Cairo (Francisco Anzola/Wikimedia Commons)