CAIRO (Reuters) - Egypt plans to build 1 million homes for poorer people at a cost of almost $20 billion over the next five years, the housing minister said, to ease a crunch that has seen slums and unlicensed buildings spread since the 2011 revolt.
With a population of about 90 million, and projected to exceed 120 million by 2050, and with many Egyptians living in sprawling slums, the country is struggling to build enough houses for the poorest in society.
So many people live in a network of tombs in Cairo that the area has become known as the City of the Dead.
Housing Minister Mustafa Madbouly told Reuters Egypt needed to build 500,000-600,000 new homes a year to keep up with demand, 70 percent of which should be aimed at the poor.
The social housing project will see 200,000 new homes built each year, meeting over half the annual demand for cheap housing. Private developers, who have built new suburbs around Cairo, are meeting the needs of middle and higher income Egyptians who can buy homes outright or obtain mortgages.
Egypt is financing its social housing scheme through land sales to developers building higher-end homes, Madbouly said.
“This is totally being implemented by the Egyptian government and the ministry of housing with a total investment that exceeds 150 billion Egyptian pounds ($19.16 billion),” he said on the sidelines of the Egypt Mega Projects conference.
“We are making use of the projects we are offering to the private sector to finance and cross-subsidize the social housing program.”
Madbouly said he was also working to upgrade informal settlements, which comprise 40-50 percent of urban areas, and to bring 24-hour piped water to all homes within three years.
Three percent of Egyptian households have no running water at all and in rural areas some homes receive water for only 12 hours a day. Madbouly also plans to bring sewage treatment to 50 percent of rural areas, up from 15 percent now.
“(We are) upgrading slums and unsafe areas. We are talking here about 248 areas ... 150,000 families,” Madbouly said.
But Madbouly faces a mammoth task. Egypt’s population is squeezed into a narrow strip of land along the banks of the Nile, the river delta and the Mediterranean coast. The rest of the country is largely desert.
As the population grows, the government is searching for a solution to poorly lit, poorly ventilated rows of unlicensed red brick buildings that have mushroomed in the turbulent nearly five years since the overthrow of President Hosni Mubarak.
Egypt had also planned to build 1 million homes for middle-income Egyptians by 2020 in a $35-billion joint venture with Dubai-based Arabtec.
Announced in March 2014, the project was a pillar of President Abdel Fattah al-Sisi’s election campaign.
Madbouly said the latest proposal from Arabtec foresees the construction of just 13,000 units in the first phase.
“The company had continuous change of its board and its strategy and its policy. They limited their ambitious program,” Madbouly said. “It’s not the project we were expecting.”
That had not, however, dampened enthusiasm for Gulf investment in the most-populous Arab country, he said, adding: “We have offered several projects with a lot of Gulf country investors and we are in negotiations with some of them.”
Editing by Janet Lawrence