Egypt says no change to TMG Madinaty terms

Egypt will not change terms for a new contract for Talaat Moustafa's flagship Madinaty project and will take 7 per cent of the project's completed housing units, as in the original deal, a local newspaper reported.

"There will be no change in the contract terms, the state will get a 7 per cent compensation for (areas) built-up on," Egyptian Housing Minister Ahmed el-Maghrabi was quoted as saying by the newspaper on Tuesday.

"The financial compensation for the Madinaty land is more than fair. The land was priced in accordance with prices in 2004, 2005, and 2006 at 297 pounds a metre," Maghrabi said.

The firm also published a note in the newspaper saying the project had incurred additional costs from connecting the development to the electricity and water grids.

It said this meant that although 7 per cent of the built-up area would be offered to the government, the extra infrastructure costs associated with the development, meant the government was receiving a bigger percentage of the project's value, equivalent to about 16 per cent of the built-up area.

Egypt's cabinet said on Sunday it would scrap the original contract for TMG's estimated $3 billion Madinaty project after a court ruled the deal was illegal, but would reallocate the same land to the firm in a new contract.

The cabinet said any new contract must not value the land at less than 9.98 billion Egyptian pounds ($1.75bn), but had not specified whether it would keep the 7 per cent rate.