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

Daily News Egypt
12 Min Read

CAIRO: With the plethora of upscale real estate developments on offer, it may be hard to believe that there is a housing shortage in Egypt. Yet, that is exactly the case, namely for the lower-income bracket.

To cater to this demand, Orascom Housing Communities (OHC) teamed up with Homex, one of the fastest growing home developers in Mexico in recent years, to build OHC’s flagship low-cost housing project in Sixth of October City, where most Cairo denizens and businesses have ventured.

The plan is to build a town of about 50,000 housing units in five years, over around 2,000 feddans, at affordable prices.

OHC was established in December 2006 in partnership with Orascom Hotels and Development (Egypt), the major shareholder, and other international partners.

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.

Daily News Egypt sat down with architect Samih Sawiris, chairman and CEO of Orascom Housing Communities (OHC), to discuss the inspiration for his project.

Daily News Egypt: Have the shops in the new project already been assigned to people?

Samih Sawiris: We are doing a kind of a big bang. By mid-September we open the town for people to move into their houses, the shops will be operational and schools ready to start.

What is the Ertikaa Company?

We are already doing this in El-Gouna: garbage collecting, sorting and recycling. We will be doing this in Cairo as well. Ertikaa means upgrade.

And Malaika?

Malaika is a factory that produces bed linens with hand-woven materials, a labor-intensive process. We want to have this kind of factory in Sixth of October because it will be conducive for people to work near where they own a house. The ultimate success of a project is to provide not only the prospect of a good livelihood but also a good job.

Is this a way of empowering women as well?

Well, in a way. When a woman knows that she can start owning a house, she will be under no pressure to lead a life that she will not be happy with just to have shelter. The way this works is to have women working in this factory so they can afford to buy a house. Initially they can rent.

There are small rooms on the site for rent. What are these for?

These little rooms are a sanctuary for people who are going through financial disasters, when they suddenly can’t afford anything. If they can’t pay [the mortgage] installments and they have to leave the house, we will not throw them on the street. They have this sanctuary: this single room in the building. There are around 10-12 rooms.

Technically, if you own a 63 square meter home and you are unable to pay the installments, we ask you to move into a 48 square meter house. This will make up the difference to cover part of the installment until you get back on track and are earning enough money to pay the installments on a small house. If you become rich again, you can always upgrade to the 63 square meter house.

Now, if you are not lucky enough and end up losing your income, you move from the 48 square meter house to the 38 square meter house. If you are unlucky again, then the only thing we can do for you is to move you into one of these sanctuaries.

What if you cannot pay rent? Do you get a free room?

They must pay rent, but it’s going to be peanuts, that is coming from social welfare. Even Egyptian social welfare pays the cost of a rented room.

How are you working with the Social Fund for Development (SFD)?

The SFD was created by the government a few years ago, and it helps people set up work. It helps people help themselves by providing jobs, training and loans for small entrepreneurs. They have helped people establish workshops that manufacture furniture, that they then go and sell to the buyer, from the same bank, to entice you to buy from these workshops. Ultimately, everybody benefits.

We have a contract set up to provide the endorsement to our buyer to buy from the factories in the workshops the (SFD) has financed. So it is a win-win situation for everybody.

What is El-Amal?

It provides a safe haven for street children – who have either left home or who have no parents and are roaming around the streets. We have established this center called El-Amal (Hope) to make children feel they have another chance in life.

For the low-income housing project, what has been subsidized apart from the land?

The land is heavily subsidized. Then there is the direct financing from the government for every eligible family, up to 15 percent of the cost of the house. It is a one-time payment the government pays as a subsidy.

What about the furniture and the bakery on site?

The bakery is being subsidized because we get the wheat cheap, and so we can sell the bread at subsidized prices. But the furniture is not subsidized, but you can get a loan to buy the furniture.

Do you provide training for jobs outside the town?

Yes. We have two to three training centers right now being implemented there.

What if people want to work outside the town?

They can. It’s just training for young people to enhance their skills, but we don’t force them to work for us in the town itself.

How do you view the future for Sixth of October?

Well, I think Cairo is going to be shifting all the more to embrace Sixth of October as the hub, so it’s no longer a satellite city, rather the western part of Cairo. Just like Heliopolis used to be on the outskirts, then it became a part of Cairo.

What about this area as a fertile ground for agriculture?

No, the land is too expensive to use for agriculture. That’s not practical . I have land in Sixth of October for hundreds of pounds per square meter.

There is absolutely no sense in trying to put agriculture as part of our strategy just because there is a [shortage of] food production. .

Agriculture has to be done in places where land is not usable for anything else and there is plenty of land that is cheap, but not in the heart of Cairo.

It’s not in my domain. I have no know-how in the business of producing foodstuffs. It’s definitely not on my agenda.

Steel rebars prices have shot up along with other construction materials. How does this affect your initiative?

It makes it more difficult for people to buy a house because their savings are not enough to cover the accelerated costs of real estate. There is obviously a problem there.

So mortgages will go up?

Everything will go up. There is obviously a problem there, but this is the typical phenomena of inflation that we discussed earlier; that inflation is going to hit the poor people of course much more than the others.

Is it going to become more difficult for people to move to the new project?

It will make things difficult for the poor people, they will become very poor.

People who were before considered rich are now poor because of inflation. The goal of the project will not change, but the type of client will change. The poor people will have to wait to become “rich again so they can buy a home.

Do you think inflation may be reversing soon?

Incomes will catch up with inflation with increased labor activity. There is more growth in the country and this how a lot of people made money in the last five years. The country was going through an overall growth before the inflation, so people became practically “richer in the last five years. When the inflation hit the country, that cycle reversed.

On a more personal note now, why have you always kept a low profile?

Well, in a way, it gives you the pleasure of living like a normal person, and being with everybody anywhere without having this image that makes you feel different with people.

How do you create a balance between work, traveling and family?

It’s very difficult to always be hovering between balance and imbalance. But we always try to regain the balance.

How do you find time to travel to 14 different locations?

Well, I have people who take care of each o
f these locations and they do not always need me to physically be there. A lot of them are capable of handling things on their own. It’s not like I have to get involved in every project.

How many languages do you speak?

Six. Arabic, English, German, French, Spanish and Italian.

Who has inspired you most?

The closest person to me was always Dr. Fathi Iskandar. He was always the example of how good people should be. He has been like a mentor to me. He was my father’s best friend. He was also our doctor, my friend and [greatest] influence.

How many children do you have?

I have five now – four girls and a boy – and the sixth on the way, also a boy.

When you were younger, what did you want to be when you grew up?

I never had career ambitions as a child because I always believed I could do anything in the world. My standard phrase as a kid was ‘Oh, that’s easy, I can do it.’

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