Egypt’s new capital: a city for investments or for alleviating overpopulation

Egypt’s new capital: a city for investments or for alleviating overpopulation

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After Prime Minister Ibrahim Mehleb announced plans to build The Capital Cairo at Egypt’s economic conference in Sharm el-Sheikh last week, many questions have been raised about the new mega-scale development plan.

According to the project’s developers, the UAE-based Capital Partners and Egypt’s Ministry of Housing, theUS$45 billion project will be an administrative and business center, spread across 700 square kilometers.

Following our interview with Dan Ringelstein, director of urban planning and design at the US-based urban engineering firm Skidmore, Owings & Merrill (SOM), the company selected to develop The Capital Cairo project, Mada Masr talks to Yahia Shawkat, former head of the Housing Unit at the Egyptian Initiative for Personal Rights, about the initiative.

Mada Masr: What has been the thinking behind the development of new cities in Cairo and Giza since the 1970s?

Yahia Shawkat: Under Gamal Abdel Nasser, the government attempted to re-distribute the population outside the old valley through desert reclamation projects. This policy failed. Later on, under Anwar Sadat’s open door policies, the government’s approach to population redistribution changed. The state began thinking about the development of new cities, with the idea that some of those residing in the old, large cities would relocate.

The first generation of the new cities included the 10th of Ramadan, Sadat and the 6th of October cities. Each city was planned to absorb half a million residents over the following two decades. In 2006, however, the population of approximately 20 cities did not exceed 800,000, according to the census. And although indications of the failures of these policies have been evident since the early 1990s, this did not prevent the state from continuing to develop new cities, or even from expanding the first generation cities by adding new land, and raising the number of their target populations.

The first obvious problem is that these developments fall under the authority of the Ministry of Housing. Specific land is allocated to the ministry that they, in turn, divide into zones for industrial, commercial or residential purposes. They then supply services to these areas and sell them without conducting any feasibility studies or carrying out any assessments regarding the nature and needs of those who are supposed to relocate to these cities.

The second problem is that these new cities were located far from the nearest metropolitan area and there were no existing modes of transportation connecting them. There were, of course, some roads, but there were no regular busses, a Metro or any general public transportation. This was done intentionally in order to make these cities independent from the nearest residential areas.

The planning of these cities was based on a real estate investment approach, which lacked an urban vision of how they would grow over time. This resulted in the availability of one million housing units in the new cities, only a quarter of a million of which were occupied, according to statistics provided by the New Urban Communities Authority (NUCA) in Egypt before 2010, and the Central Agency for Public Mobilization and Statistics (CAPMAS) in a study published about the plan for economic and social development.

So we have around 750,000 vacant housing units in the new cities and more than a million empty units in greater Cairo, and around seven million vacant units in the whole of Egypt. Although they are spread across different regions and potentially serve different needs, they remain vacant. It is not logical, then, to build another new city with another million housing units, if the target is to decrease the load on the older cities, and especially on greater Cairo.

MM: So why do we continue to build new cities to decrease the population load on greater Cairo when we know that this approach has not been successful over the past 40 years?

YS: The initial idea behind building new cities surrounding greater Cairo was to create new population concentrations in the form of small satellite cities that could absorb the increase in population and be connected with the commercial and administrative heart of Cairo. This approach changed in the 10 years between the mid-1970s and the mid-1980s, from the construction of relatively small districts or concentrations to the accumulation of these neighborhoods, such that they form independent cities. For example, 6th of October City and the neighboring Sheikh Zayed city together became one mega-city instead of a collection of small districts. In the East of Cairo, the first, third and fifth settlements, initially built independently, were merged with Al-Amal City to become the city of New Cairo.

Another change took place regarding the nature of these new cities and their relationship with greater Cairo. At first, there was a tendency to relocate people from Cairo to the new cities and to the cities of Al-Nahda and Al-Salam, where most of the popular housing projects were concentrated. This changed in the late 1990s, when the New Urban Communities Authority realized that great profits were being generated from land sales on the north coast (that had been allocated to it in 1980).

This caused a noticeable shift in the approach of the Authority to a more commercial and investment-oriented one. At the same time, a number of Egyptian businessmen, including Ahmed Bahgat, Seoudi, Rasekh and al-Gammal, were attracted to real estate, as it was not affected by trends governing international markets. It was also a more stable and less competitive field than the industrial field. Private residential concentrations, such as Dreamland, Al-Rehab, Al-Rabwa and others started to appear near Cairo. These are gated communities that are exclusive to a certain high-income sector of the population.

The 2007 presidential decree that allowed for ownership of Egyptian land by foreigners marked the beginning of a new phase. The decree introduced Gulf capital to the real estate investment market for the new cities and the areas surrounding Cairo. This led to an increase in the prices of both real estate and land, which continues to this day.

The idea to redistribute the population and to alleviate the pressure on the old cites disappeared in favor of the new dominant idea of real estate investment and profit. This is evident in the large number of vacant residential units and the absence of equitable distribution of lands. For example, a study conducted on New Cairo showed that 60 percent of the land of the city is allocated to the upper-middle class, and around 20 percent to the wealthy. The remaining 20 percent is allocated to the middle class and lower-income classes. This imbalance in land distribution led to larger portions of the population inside the cities building units on agricultural land informally.

MM: Historically, the idea to develop new cities and revamp old ones has appeared more than once. How would you trace these plans and ideas?

YS: The idea started in the 1970s, with an unsuccessful project to move the capital to the Sadat city. In the middle of the last decade, a plan for “Cairo 2050” began and included moving the ministerial buildings, except Parliament and the Presidential Palace, from the residential areas to the peripheries of Cairo near the ring road. The plan, however, did not materialize and its future became unclear.

According to the “Cairo 2050” plan, which is based on a study conducted by the Japan International Cooperation Agency (JICA) and the Ministry of Housing, the idea was to alleviate the overpopulation in the heart of Cairo from 11 to 9 million people by moving them to the new cities. The study concentrated on moving the population from unsafe and deteriorating informal settlements through the creation of a belt around these areas to prevent their expansion, and by extending and expanding roads at their center, necessitating the relocation of entire neighborhoods, including the Maspero triangle, Ramlet Boulaq and the residents of the Nile islands, and making use of their lands for investments, claiming that this would alleviate overpopulation.

The problem is that these investment projects, which include hotels, malls and entertainment or administrative centers, create an overcrowding to replace the overpopulation. As a result, it did not solve the problem of the increasing pressure on Cairo.

MM: If all this information is available, why are we going to build a new city, bearing in mind that one of its announced goals is to alleviate pressure from the old capital?

YS: When it comes to the new city, there is no clear interpretation of the objectives of the project because of a dearth of information. Perhaps the target is to open a new space for real estate investment. Maybe there is a projection that these investments will increase in the future and there is a desire to create new space for them.

If we think about the new city from the perspective of the balance of the population in Cairo, we should keep in mind the point we mentioned earlier: There are around one million vacant housing units in greater Cairo and around 750,000 vacant units in the new cities as a whole. It is therefore not logical to develop another million units in a new city. And if we keep in mind that the highest rate of growth for any city does not exceed 10 percent, then the target of the new city is to host five million residents. This is not a rational target, even if we depend fully on civil servants, who will be moved to the capital. In our experience with the new cities, which included industrial, administrative and commercial areas, the employees in these areas did not live where they worked. Those who did continued to own their housing units in their former cities. As a result, the desired target, which is to redistribute the population to the new cities, was not achieved.

Also, most of those living in greater Cairo are craftsmen and small-scale workers; they are the ones who constitute the greater proportion of the population. The new capital, by contrast, depends on making available space for service and administrative jobs, both in the private and governmental sectors. As a result, it will not lead to the relocation of the masses that constitute the real overpopulation inside greater Cairo.

It is important to conduct comprehensive social assessments to find out who will in fact inhabit the new city before moving all the administrative buildings and starting spending on the necessary infrastructure for the city.

The Minister of Housing also brought up an important point when he made a connection between the new capital city and the Suez Canal development project. There are seven economic regions in Egypt, and for every region, there should be a national project dedicated to its improvement and development. It is not logical to move the city to the region. Instead, the region itself should be developed along with its cities and population.

MM: What are the economic implications of the new capital?

YS: I am worried about a few issues. Firstly, I am afraid of the possibility that a new city of that scale will create a crisis of resources. Already, there are problems with water and an energy scarcity. Does it make sense to start building a city that could add to the pressure on power and water networks instead of supporting the existing networks? While it is true that, according to the announcements so far, the electricity for the city will be partially secured by renewable energy stations, it will also remain partially dependent on old networks. It is also true that the construction of the new water networks will be funded by investments, however the resource itself, meaning the water, will remain limited.

Secondly, there is also a possibility that the process of developing a new city will affect the construction sector, which might favor working in the new city at the expense of the other areas, which will continue to require maintenance and development for their networks and services. Similarly, carrying out these massive development projects could affect the prices of construction materials in the region. There are fears that the development of the new city, which is a massive project, could lead to an industrial bubble, which is a temporary economic boom that is fake.

Thirdly, it is unclear how Cairo is expected to actually benefit from the new city, whether in terms of alleviating pressure or in securing adequate resources for the maintenance of Cairo, especially in the absence of any studies that clarify how this will take place. The problem is that everything that has been announced so far suggests that we are bracing ourselves for a huge development project but that no clear social or economic assessments have been undertaken. We are about to build a city without a clear social or economic basis for its growth.

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