Even though the Prime Minister’s decision number 3308 for year 2022 with regard to the immediate allotment of the industrial lands of the investors in applying the principle of usufruct, the decision included some important points that require modification:

• The decision of the H.E Prime Minister no. 3308 for year 2022 with regard to the industrial land in most of the decreed rulings, especially concerning the rules and established prices, have been already issued from the Industrial Development Authority and the responsible commission with the decision no. 2100 for year 2021.
• There was no discussion held with the Federation of Egyptian Industries (FEI) about the prices of the lands included in the decree which are overpriced and not attracting any investment/investors.
• The decision did not include the required documents, even though the FEI had its reservations and objected several times about the documents required from the industrial investors after formulating committee 2100 for year 2021 such as providing detailed feasibility studies that include a technical,  economic, and fiscal studies. Also, infrastructure studies, capital investment, proposed fund, schedule of outdated products, production cost list, and a 5-year prospective income list starting from the project’s initiation date. Furthermore, referencing the procedures and pricing for the established committee according to the PM’s decision no. 2100 for year 2021, in contrast to what the decree no.95 for 2018 included.
• The decision did not include the timeframe/period installments shall be paid through.
• The decision included that the proposed prices are for guidance.
• The decision did not elaborate on what the investors should do in case the piece of land was not delivered and this is a common situation that happened with most investors.
• In the first clause, chapter no.5 ‘’In case the investor does not pay for two consecutive installments, the ownership entity has the right to terminate the contract’’.
• In the first clause, chapter no.6 ‘’The land is given to, including what is established/built on it, to its protectorate after the usufruct period is over’’
• In all cases, that who is assigned shall comply with all the assignments’ requirements, which include implementing the project and starting the initiation process in three-years’ time maximum starting from the date of receiving the land, in addition to complying with the specified scheduled period of time, otherwise, the piece of land is withdrawn/taken with usufruct during the time of having the piece of land. These are the rules that are applied presently which have many disadvantages such as:
  • The contracts that are formulated with the investor are compliance contracts meaning that s/he do not have the right to object to any clause and it also includes what was mentioned in the abovementioned chapter no.6 according to the PM’s decision.
  • The existence of natural obstacles, in the lands being delivered, is not taken into consideration. Such as the existence of a hill or other obstacles which shall take a period of time from the investor to remove, in addition to the increasing burden of the construction costs. Also, the delay fines are doubled on a monthly basis and also standard costs
  •  The attached lands are not delivered with the specified given piece of land whether at the starting date of land receival or during the implementation/execution of the process. The owning entity does not comply with the aforementioned and delay fines are applied on the investor in case a delay takes place for the scheduled period.
  • The Industrial Development Authority sets the execution program for a time limit of three years, without taking into account any obstacles or impediments that impede the process.
•  What was mentioned in the last paragraph of Article 3 of the PM’s decision which states ‘’Paying the price of the land after reevaluating its commercial price while deducting what has been paid as usufruct’’
   

• The period of installment should be a 15-year period.
• The prevailing notion about the lands issue is that industrial development and supporting manufacturers to reduce construction costs for factories to expand industrial production instead of land trading.
• Simplify the documents that are required from the industrial investors after establishing the committee 2100 for year 2021 such as providing a detailed feasibility study.
• The importance of clarifying other options for the investors in case the attached lands are not delivered.
• The existence of grace periods in case of occurrence of out-of-control circumstances that affects the investor such as what took place in the case of COVID19 pandemic or the Russian-Ukrainian war or any critical occurrences that may affect the investor’s income and their ability to pay their debts steadily. Hence, a grace period must be included, and a first notice should be sent, and a second notice should be sent in a specified period of time that would allow them to utilize their resources to pay the belated debt especially since delay interest are applied according to the interest value issued in the bank.
• To activate paragraph no.5, clause no.35, rule no.95 with regard to Industrial Development Authority and the noncompliance of the person of concern of the requested schedule; ‘’meaning that the investors must establish the executive time schedule themselves’’.
• To validate the rights of the investor as the law did not specify the three-years established by the Industrial Development Authority without giving due consideration to the obstacles that might hinder the process during that time.
• To specify a value that the investor gets by the end of the usufruct period in return to what have been established such as buildings or production lines in case the factory is not completely sold.
• Changing the notion of the commercial price evaluation of the lands once owned, as the investor is the one that raised the commercial prices with the established investments since beginning the project. This has been objected by the FEI several times as the mindset of land trade still is dominated by the notion of selling the lands with the highest prices instead of maximizing production and industrial development.
• In case of agreement on buying the land and owning it in a period of 5 years, the price of the land should be the same in the agreement as during usufruct period while deducting what has been paid during the latter period from the price value of the land.

• IDA lacks the financial resources needed for equipping industrial land with utilities. Together with the high cost of bringing utilities to undeveloped plots, small investors face a shortage of appropriate industrial land. IDA’s lack of financial resources is likely to hinder its ability to deliver on its plan of making available 60 million square meters of land by 2020.
• Lack of industrial land plots (500 square meters) available to small enterprises in industrial zones, in line with the Industrial Licensing Law.
• Excessive increases in land prices and the lack of pricing standards.

• Allocate additional land to IDA to increase the industrial land supply available for investors and develop objective and transparent mechanisms for land allocation.
• Make available land plots and facilitate land acquisition procedures. 
• Authorize the development of public markets, major commercial complexes, and hypermarket chains, which are critical for marketing locally manufactured products at competitive prices and increasing demand for these products.

• In June 2019, the Cabinet approved a proposal, submitted by the coordinating council for Industrial Zones that allows selling industrial land plots on installments at an annual interest rate of 7%, rather than the interest rate set by CBE.  This decision, which will remain in effect for three years only, aims to attract more investments to the industrial sector, in order to expand the establishment of new industrial zones to increase youth employment opportunities. 
• In July 2019, the Internal Trade Development Authority) signed eight partnership agreements with a group of investors and commercial developers. Under these agreements, commercial and logistic zones will be established in a number of governorates including Sharqiya, Menoufia, Gharbia, Beheira, Luxor, Qena, Fayoum, and the New Obour City. It is expected that the agreements will attract investments worth LE 23 billion, and provide approximately 200,000 direct and indirect job opportunities, as well as make available commercial centers that meet all the needs of citizens at reduced prices.

Failure to fully enforce some of the provisions of Law No. 15 of 2017

• The New Urban Communities Authority, which is affiliated with the Ministry of Housing, Utilities, and Urban Communities, continues to require investors to provide a bank guarantee to acquire land in industrial zones; this is an exaggerated requirement as it was revoked under Law No. 15 of 2017.

• Fully enforce the provisions of Law No. 15 of 2017, which revoked the bank guarantee requirement, as a proof of the seriousness of purpose of investors who are interested in acquiring industrial land.

• The lack of objectivity and transparency in the allocation and pricing of land, as well as the absence of comprehensive information on the availability of land, prices, and acquisition procedures.
• Land policies are developed in the absence of an updated integrated land information system.
• Lack of standardized procedures for land allocation across the various government entities, and lengthy and cumbersome allocation procedures.  

• The Prime Minister should promptly issue a decree to clarify jurisdictional issues related to industrial land; the decree should also clearly outline the role and function of the New Urban Communities Authority and IDA; the former should have jurisdiction over the land, infrastructure, and the provision of utilities, while the latter should have sole jurisdiction over land administration and allocation.
• Resolve the legal conflict regarding the jurisdiction of IDA over industrial land, as stipulated in the law regulating IDA. If needed, issue a new law that clearly delineates the jurisdictional authority of different government entitles over industrial land and the responsibility for providing utilities and allocation of land to the final beneficiary.
• Create a well-integrated and accessible information system for industrial lands; ensure that it remains updated.
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• Replace the numerous laws governing state land with a single unified and simplified law to administer it.  
• IDA should be designated as the sole entity for interacting with investors. 
• Create a land bank to serve as a database, listing all available industrial land, the price of each plot of land, and information regarding the current status of utilities and infrastructure.  

• A coordinating council, affiliated with the Cabinet, has been established to study the challenges facing investors in industrial zones. 
• The Cabinet contracted a consultancy firm (MegaCom) to examine the challenges and barriers facing investors in industrial zones and develop solutions. The firm was to consult with investors and seek their feedback and views on the barriers and solutions. The consultancy contract is funded by the Ministry of Finance.
• FEI and MegaCom discussed the recommendations included in the study. It was agreed that investors should be able to lease the land plot for ten years; the plot may be purchased if the investor demonstrates seriousness about the investment. 
• Investors can acquire industrial land by accessing the investment map posted on the website of GAFI and, according to the type of projects to be established in each region. That said, many users find it difficult to deal with this online map.

• Land registration requires conducting cadastral surveys. However, the current capacity of the Egyptian Survey Authority does not allow it to respond to survey requests nation-wide in a timely manner, thus, expedited requests for registration are put on hold. 

• Authorize the establishment of accreditation offices to carry out cadastral surveys to facilitate the land registration process (similar to the case under the Simplification of Licensing Procedures for Industrial Enterprises Law and the Investment Law, which authorize the establishment of accreditation offices to facilitate the licensing process); allow security-cleared entities to use modern techniques of geographic photography.