Gov’t halts settlement talks with Qatari Diar over EGP 16 bn Hurghada project
EXCLUSIVE- Gov’t halts settlement talks with Qatari Diar over EGP 16 bn Hurghada project: The government has halted settlement talks with Qatari Diar over the company’s EGP 16 bn Hurghada resort, government sources tell Enterprise. The company has made no attempts to settle the dispute or engage with the government in over year, the sources added. The company continues to not meet its obligations as per the agreement, they allege.
Background: Under an agreement signed with the Tourism Development Authority (TDA) back in 2006, Diar was to establish a company to develop a 29 mn sqm resort in Hurghada with a paid up capital of EGP 1 bn, to which it had only paid up EGP 293 mn as of 2016. Under Egyptian law, the company had five years to meet the paid up capital requirements, the sources said. They added that the company had also only paid USD 49 mn of a USD 62 mn price tag on the land. It’s worth noting that the company’s other projects have also been stalled, including the City Gate project in New Cairo and a 300k sqm resort in Sharm El Sheikh.
Potential arbitration case in the offing? The lack of a settlement could potentially open the door for an arbitration suit by Diar. Rumors back in 2016 had surfaced that the company was indeed considering an arbitration case over the Hurghada project.
…or even a buyout? Also coming from the rumor mill were reports in March that Naguib Sawiris, who himself stated last month that he plans to invest heavily in real estate, made Diar a EGP 35 bn offer to acquire all of its local assets.