By Muhammad Abdel Munsaf, Mahmud Salah Al-Din
The Holding Company for Tourism, Hotels and Cinema announced it is seeking to establish a new company responsible for providing funding for and implementing the Tahrir Square Development Project.
The project was previously expected to be operated by a partnership run by the National Société Générale Bank (NSGB) and Accor Hotel Group. A number of financial institutions were also asked to take part in the project, with the Holding Company for Tourism set to maintain the largest share.
Amina Ali Ibrahim, chairman of the Technical Sectors Department in the holding company, stated that the company was seeking to establish a jointly run company responsible for constructing and administering a hotel and new administrative facility set to be built in Tahrir Square.
She added that the Holding Company would not claim ownership of more than 51% of the shares of the project, saying that the company was currently negotiating the participation of other agencies and determining the required amount of financial capital necessary for its funding.
The company has asked the National Bank of Egypt (NBE), Banque Misr, the National Société Générale Bank, Misr Insurance Holding Company, and the Endowments Authority to participate in the construction and implementation of the project. All parties so far have asked to be provided with additional information on the project before agreeing to participate, with the exception of the Endowments Authority which refused to take part in the construction of the hotel.
Salah Al-Geneidy, chairman of the Endowments Authority, stated that they were approached by the holding company, and asked to take part in the establishment of a new company to establish a hotel and administrative facility in Tahrir Square at an estimated cost of EGP 550m. EGP 180m would go towards construction of the administrative facility, with the remaining EGP 370m going towards the hotel.
Al-Geneidy stated that the Endowments Authority agreed to take part in the construction of the project’s administrative facility, as soon as they were provided statistics for the size of the territory on which it would be constructed, saying that they were currently awaiting a response from the Holding Company.
He added however that the Authority would refuse to contribute to the construction of a hotel that plans to serve alcohol.
In September 2012, the Holding Company for Tourism, Hotels and Cinema initially purchased 5,867 square metres of land in Tahrir Square from the NSGB-Accor partnership, at a price of EGP 10,500 per square metre. The contract was quickly altered, however, to operate as a usufruct scheme for a period of 50 years, due to previous misunderstandings that marred the bill.
Ibrahim said that several other options were being considered to provide funding for the project, primarily through securing loans.
The company recently signed a contract with the SIAC-Arabtec Construction contracting partnership firm, granting them the rights to construct and implement both the hotel and administrative facility of the project on land overlooking Tahrir Square. The American construction risk management company Hill International would be tasked with providing management and oversight for the project.
Translated from AlBorsa Newspaper