Samih Sawiris on Orascom's low-income housing project (Part I)

Daily News Egypt
13 Min Read

CAIRO: Driving along Cairo’s labyrinthine Sixth of October bridge en route to Heliopolis, it’s hard to miss the swarms of people on both sides jostling for space in Egypt’s sprawling metropolis. For the majority, there is no hope of moving out, or improving their lifestyle: the rich are rich, the poor are very poor and the middle classes are fast becoming extinct.

As world economies struggle with soaring oil prices topping $140 a barrel and building materials like steel and cement become prohibitively expensive for housing projects catering for the low- and medium-income communities, the hope to improve living standards for Egypt’s poor seems slim.

In this context, it’s hard to imagine how building affordable housing for lower income brackets would make sound business sense, except, that is, if you are Samih Sawiris, chairman and CEO of Orascom Housing Communities (OHC).

OHC was established in December 2006 in partnership with Orascom Hotels and Development (Egypt), the major shareholder, and other international partners including Homex, one of the fastest growing home developers in Mexico in recent years.

Homex’s expertise lies in providing low income quality housing in the Mexican market, a mission that OHC has taken on locally. With that, it has become the first on board to cater to the housing deficit for low income segments in Egypt and the MENA region, meticulously tailoring their projects to suit fully integrated, individual community needs.

OHC’s flagship project is located in Sixth of October City, where most Cairo denizens and businesses have ventured.

Conveniently, the project is close to the heart of Cairo and enjoys low density living space and a healthy environment. The plan in January 2007 was to build a town of about 50,000 housing units in five years, over around 2,000 feddans. More than a year later, 6,000 units have been built and sold, with 10,000 units in progress.

Essential infrastructure, including water supply, a sewage system, electricity networks and roads have also been established, and so have services like schools, supermarkets, a marketplace, clinics, mosques and churches, recreational areas and malls, as well as open-air cinemas.

Daily News Egypt sat down with visionary architect Samih Sawiris to discuss the inspiration for his project. A champion of environment-friendly construction and quality sustainable towns, Sawiris encourages higher productivity through education, mitigating ignorance and fear as well as providing the kind of peaceful social climate that is conducive to progress.

Daily News Egypt: Is there a silver lining to this cloud of inflation?

Samih Sawiris: I don’t think there is anything positive about inflation. Poor people are not able to pass inflation onto others, i.e. the richer people. So in the end the poor people suffer most from inflation because they are mostly earning fixed income and fixed wages that do not move as fast as inflation.

How important is innovation in a developing country?

Innovation is the key to the progress of people everywhere, and this applies to small countries just like big countries. You can raise the standard of living and you can actually improve people’s lives…so that it is not a monopoly of modern countries with sophisticated technology.

Even simple innovations can help villages. For example, clean water with desert pumps. These little things can add up to be useful.It’s very important to try to embrace people that have innovative ideas and help them to turn [their ideas] into practical uses for the benefit of the community where they are.

Is innovation a challenging concept for people?

Yes, there is too much red tape, They are not used to change and so they are not very open for change. Egypt has a bit of a problem when it comes to innovation.

Do you see housing as a commodities market?

Of course, I think housing, especially with the volumes we are talking about in Egypt, is a pure commodity.

Why did you choose Homex as your partner for this project?

Why reinvent the wheel? I mean, these are people who are by far the most successful in low-income housing worldwide. They come with a lot of expertise, [good] track record, therefore, it saves us years of learning experience by having them as our partners.

Are class divisions in Egypt now as rigid as they were 15 years ago?

I think Egypt is still a very class-culture society, and people haven’t changed much.

Do you see a rebirth of the middle class?

It has nothing to do with the classing procedures in this country. The middle class is a function of the financial and educational progress of lower income and poorer people over time, acquiring the new status thanks to better education and financial income. So with inflation hitting those people, this brings them down to where they used to be. In many cases, even the education suffers as the first victim of the lack of money spent on the progress of education in the family. Therefore, they end up going back to being poor people.

Was the initiative to form OHC governmental?

No, actually it was my initiative. I had started it in El-Gouna because I was always hoping that the younger waiters and younger workers would ultimately settle with their families in El-Gouna indefinitely, and call it their hometown. So we started OHC in El-Gouna actually. When we saw how they are, and how they were in demand, we embraced the idea [housing communities], and the government welcomed it, so we did it.

Was it a political move?

No, not at all. As I was telling you, I found it was a good thing and people were benefiting from it. Also it happened to be aligned with the government targets to help low-income people get homes in their own country.

How was the location chosen?

We had a long argument with the government regarding the location. I strongly believe poor people deserve better land because they cannot afford to live far from their workplace since they would be wasting half their income commuting everyday. Therefore, it was one sacrifice the government made to give the poorer people the better land since there is a lot of land, and since it really is the only thing that does not cost the government much because they have it.

Normally, it shouldn’t be given as a priority to poor people. We convinced them [the government] to allocate this good piece of land, which is quite central and in the heart of Sixth of October, towards this project. We built homes in a way that will not attract except poor people, so at the end of the day, it is the right way to go. If you put the poor people in the middle of nowhere, and think they are going to move out there, and they are not, they just cannot afford paying transport everyday.

So they should be close to higher income brackets, where the cost of land is at least double?

Well, I don’t believe that it should be regarded as a total no-go. I mean, if you want to have a distinction between classes in a country, that’s your own prerogative; but if you want to keep poor people miles and miles away from you then I think it’s better that you either learn to live next to them or you move yourself. It’s not fair to demand that poor people disappear from your sight just to have it absolutely for upper classes, you know.

Won’t they compare living standards and feel different?

They are used to it. I mean the people who live in the slums in Cairo, the minute they leave the slum and start looking at buildings left and right on their way to work they realize there are people who live 100 times better than themselves. The difference between the slums and normal buildings – i.e. the slums, let’s say, in Giza and in Mokkatam, is much bigger than what we are providing and what is around it.

The town we are developing in Sixth of October is not really that inferior to the rest of Sixth of October. So that the differential between them is not going to be as shocking as the difference between a slum in Giza and, let’s say, normal housing in Dokki just 200 m away.

Are you looking to sustain quality in Egypt?

I can’t sustain the quality in Egyp
t, I can only sustain the quality in my company and in the town that I am building. So that’s the maximum scope of responsibility I can accept. We will be managing the town there indefinitely. We have no intention of handing it over to the government. We intend to keep it as a model town in order to be sure that it becomes our flagship. Whenever we want to expand we can look at what is going on in our first project, learn from it and implement it when we move to another place.

Is El-Gouna a model town?

Of course. If it wasn’t for El-Gouna I wouldn’t have been able to develop this concept of low-income housing projects. We’ve had 18 years of experience in managing a village that slowly grew to become a town, and this helps a lot.

I thought you initially built El-Gouna for yourself and your family?

From day one I had people living there so I had to provide water, electricity, services, sewage, maintenance and security. So from day one I had a function of running a town. In the beginning it was a mini-town, and then it kept growing over the years.

What were the risks you took?

That people may not like it, and may not want to stay there. I was also worried that people might not want to live there.

Are you the first company on board the low-income housing project?


When do you see this project underway and functional as a town?

Before the end of the year you will have the typical centers of a town: the school, clinics will be operational. You will have recreational facilities, cafes and shopping centers – all this will be already operational and people will be living there to enjoy it.

Read Part II of Daily News Egypt’s interview with Samih Sawiris on Wednesday July 9.

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