Responsible Entities

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 Also, infrastructure studies, capital investment, proposed fund, schedule of outdated products, production cost list, and a 5-year prospective income list starting from the project’s initiation date.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’’
     

  • 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.

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.

  • 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.  

  • 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.