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Wednesday, 3 August 2022

PROJECT PROFILE- Darah Provincial Capitals Development Project

PROJECT PROFILE- Darah Provincial Capitals Development Project: At the end of 2020, the government announced the start of a new initiative called Darah, which aims to generate more housing and improve the quality of services and infrastructure in often forgotten capital cities in governorates outside of Cairo. Led by the cabinet-affiliated Urban Development Fund, Darah sets out to embark on a housing construction spree across the country expected to cost some EGP 120 bn in its initial phase, our sources tell us.

The project aims to bring residents better services to discourage cross-governorate migration: The Darah initiative aims to provide older provincial cities with services comparable to those found in more newly developed cities so that residents seeking better standards of living elsewhere in the country might reconsider moving, head of the Urban Development Fund Khaled Siddiq tells us. “We want to put an end to internal migration,” Sidiq says. “We're focused on offering better services to people from across the socioeconomic spectrum.”

Lots of new housing will be in store too: Constructing new housing units and residential communities is one of the primary objectives of the new project, which will see some local private sector involvement in their development, says Siddiq. Some 500k houses will be constructed by local firms throughout the capital cities of all 27 governorates in the form of residential communities or compounds, many of which will come equipped with parks, parking lots and green landscaping. The project will also focus on restoring the facades of older residential buildings and upgrading dilapidated buildings — which could help attract more private sector investment to these cities.

The Urban Development Fund will be the acting real estate developer that will ensure commercial services are brought into these cities alongside retail spaces, offices, and public utilities. New roads to help connect these new locations to the rest of the country’s road network are expected to be made available and will be constructed by the Armed Forces Engineering Authority.

So what’s the timeline on Darah? The project is divided into three distinct phases that will see development work undertaken in all 27 governorates in its final form. The first phase of the initiative, which will see infrastructure and housing development projects executed in 13 governorates including Suez, Fayoum, Dakahlia, Qena, Sohag, Minya, Sharqia, Menoufia, Kafr El Sheikh, and Damietta, is currently about 60% ready and is set to reach completion by September, Siddiq tells us. Some 35 housing projects spanning 1.5k feddans are already underway in these 13 initial governorates where units are expected to cost somewhere between EGP 10k and 20k per sqm, Al Ahram reports Siddiq as saying.

Second phase coming: The second phase of the initiative will kick off soon after the completion of the first phase, and is expected to see public infrastructure works in more governorates completed by June of 2023. So far no word has been mentioned yet about the start of the third and final phase of the initiative.

The project is slated to cost some EGP 120 bn in its first phase and will be partially financed through a EGP 53 bn loan, the terms of which the Urban Development Fund is currently negotiating with nine local banks, Siddiq tells us. The fund has so far reached an agreement with one state-owned bank. The total cost of the project could run up to some EGP 262 bn and could cover an area spanning 140k feddans.

Urban redevelopment initiatives have picked up steam in recent years across the country: The government’s Darah project is part of a network of restoration and redevelopment projects announced in recent years in Cairo like the Fustat Garden development, the Magra El Oyoun development project and the Old Cairo redevelopment project. Though these projects skew towards heritage restoration and are major tourist attractions, they remain part of the same drive to reshape the face of urban areas across the country.

Your top infrastructure stories for the week:

  • The UK’s DFI is planning to invest USD 6 bn in Africa over the next five years, has become an anchor investor in a USD 500 mn African infrastructure fund, and plans to open an Egyptian office.
  • El Sisi wants high-speed rail to launch ahead of time: The government wants to inaugurate the first line of the 660-km Ain Sokhna-Marsa Matrouh phase of the national high-speed rail link on 7 November.
  • Egypt will host the region’s largest polyethylene complex: President Abdel Fattah El Sisi has ordered the construction of an industrial polyethylene complex to produce plastics for the local market.
  • Train fare hikes: Metro and train fares will rise by up to 25% later this month, Transport Minister Kamel El Wazir said this week.

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