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Egypt panel advises higher TMG contract value-paper
A new contract between the New Urban Communities Authority (NUCA) and TMG is yet to be signed.
October 18, 2010 10:51 by Reuters
An Egyptian legal committee advising the government on drafting a new contract for Talaat Moustafa’s (TMG) flagship Madinaty project recommended valuing the land at a higher price, a newspaper said on Monday.
TMG’s flagship Madinaty development has been mired in a legal row since a court in June said the contract for the sale of state land for the scheme was illegal.
The cabinet approved a plan to scrap that contract, but said it would reallocate the land to the firm under the same terms based on its right to act in the national interest and valuing it at no less than 9.98 billion Egyptian pounds ($1.8 billion).
But the panel of legal experts are recommending that value be raised to 13.9 billion pounds, daily al-Masry al Youm reported.
No-one at the company could immediately be reached for comment.
A new contract between the New Urban Communities Authority (NUCA), a housing ministry body, and TMG is yet to be signed. NUCA is to take 7 percent of the project’s completed housing units, as in the original deal.
The newspaper said the committee was not changing the 7 percent term but that TMG was given the right to build higher buildings and therefore the value of the units had been raised and should be reflected on the new contract’s value.
Shares in TMG, Egypt’s biggest listed developer, have risen and fallen with each turn of the case and the row has rattled investors who fear any more legal wrangles could hurt other developers that bought land from the state.
An Egyptian court will hear a lawsuit on Nov. 9 challenging the government plan to end the row by reallocating the land back to TMG.
(Writing by Dina Zayed; Editing by David Holmes)