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00:00Welcome to this week's episode of Dialogue of the Week, coming to you from Cairo via CNBC Arabia and I am Yasin Al-Guhari.
00:20Our guest in this episode is Engineer Khaled Abbas, Chairman of the Board of Directors of Al-Aasim Administration. Engineer Khaled, welcome to CNBC Arabia.
00:28Welcome. It is a pleasure to be here in Al-Aasim Administration.
00:31We can talk today, after seven years of working in this project, Al-Aasim Administration.
00:36To what extent has this capital become ready to serve the entire Egyptian state from this capital, with all its institutions, authorities, legislation and implementation?
00:46Let's start with 100%. The Egyptian government has been working in Al-Aasim since last July.
00:51The government has been working in Al-Aasim since last July.
00:53The government has been working in Al-Aasim since last July.
00:55The government has been working in Al-Aasim since last July.
00:57The government has been working in Al-Aasim since last July.
00:59The government has been working in Al-Aasim since last July.
01:01The government has been working in Al-Aasim since last July.
01:03The government has been working in Al-Aasim since last July.
01:05The government has been working in Al-Aasim since last July.
01:07The government has been working in Al-Aasim since last July.
01:09The government has been working in Al-Aasim since last July.
01:11The government has been working in Al-Aasim since last July.
01:13The government has been working in Al-Aasim since last July.
01:15The government has been working in Al-Aasim since last July.
01:17The citizens' hesitation to move to Al-Aasim has increased gradually.
01:19The citizens' hesitation to move to Al-Aasim has increased gradually.
01:21The citizens' hesitation to move to Al-Aasim has increased gradually.
01:23Today, more than 48,000 government employees go to work and return to their offices every day.
01:25Today, more than 48,000 government employees go to work and return to their offices every day.
01:27Today, more than 48,000 government employees go to work and return to their offices every day.
01:29Today, more than 48,000 government employees go to work and return to their offices every day.
01:31Today, more than 48,000 government employees go to work and return to their offices every day.
01:33Today, more than 48,000 government employees go to work and return to their offices every day.
01:35Today, more than 48,000 government employees go to work and return to their offices every day.
01:37in these ministries. So, of course, we have a high level of money today, and very soon
01:41the banks will move. We expect that there will be about 10,000 other employees in the banks.
01:47And therefore, thank God, the state's system, its institutions, have become complete now.
01:54And all the services have become available?
01:57All the services are available. We have schools, we have working groups, we have hospitals,
02:01we have religious centers, shopping malls, or mosques. So, thank God, all the services
02:06are available, and every day there is an increase. You know, the idea of development is that
02:10development continues. There is no development that we can say that we have finished today.
02:13But development continues, with an increase in the number of people, you will find that
02:16the services are gradually increasing. And of course, any kind of services, especially
02:19commercial services, will need residents.
02:22How many residents do you currently have in the capital?
02:24We currently have, according to the numbers we have, we have installed more than 6,000 units.
02:28Do you mean the number of electricity units?
02:30Yes, because we are responsible for the installation of electricity, water, and all these things.
02:32So, today we are saying that we have installed 6,000 units, which means that there are 6,000 families,
02:366,000 families. Yes, they may not all move, but of course, as they come, and the procedures
02:40to install the units, and all these things, they will move very soon.
02:43We currently have, I think, about 600 to 400 families, in many areas, who are staying in a full
02:49residence. And every day the number increases. Every day, the government or the government
02:55delivers the units that were allocated to the senior workers. There are about 4,000 units
03:00that have been delivered currently, and therefore, this is another number, I think, that will
03:04soon increase in this area.
03:06Do you expect an increase in the number of residents?
03:08Of course, I expect that, God willing, by the end of the year, we will have about 10,000 families,
03:11from 8,000 to 10,000 families. We are responsible for more than 50,000 citizens, and this is,
03:15of course, a very large number in the first year.
03:17Let's move on to the financial indicators for the capital management company.
03:21Like any company, a commercial development company, the size of the company is measured
03:26by the size of its assets, or the size of the land bank that it owns. Now, the size of the
03:30assets of the capital management company.
03:32The size of the assets of the capital management company, we are now in the final stage of
03:35reviewing the 23 indicators, but the size of our assets has increased from the previous
03:39year, when we had 55 billion, we will approach about 300 billion pounds this year. And here
03:44I must point out that this is evaluated with the old numbers.
03:48What did you say, Mr. Sadr?
03:50Exactly. And this, of course, remains for the laws and financial regulations, that we are
03:53required to re-evaluate these assets again within a year or two, and I think that in the
03:57case of re-evaluation of these assets, the size of the assets will be doubled or tripled.
04:03So, I think these are very good numbers.
04:07As for the indicators, if we talk about the land bank, we spent about 70% of the land
04:13we owned in the first stage, we still have about 4,000 to 5,000 acres.
04:18So, this is what led us to start planning for the second, third and fourth stages, because
04:23we have many demands on these lands.
04:25I will ask you, of course, about the next stages of the capital, but the remaining space,
04:30do you expect to implement projects in it or take advantage of it during how long?
04:34I think we have a plan, maybe within a year or a year and a half, the remaining space
04:38will be spent on these lands, whether projects that we will implement ourselves or through
04:42the developers or investors who will join us in it.
04:45Since we have finished in 2023, what is the size of the profits and the size of the
04:49investments for Al-Assam Capital?
04:51The size of the profits, God willing, we promised Mr. Mosameen that we will make about 25%
04:54more than in the year 2022.
04:56We were about 20 billion before the taxes in 2022.
04:59Thank God, we will have approximately 40% more.
05:02Our profits have exceeded 27 billion with about 27.8 billion.
05:06Of course, as I said, it is in the final reviews with our financial reviewers.
05:10So, we are talking about an increase of about 35% to 40% from the previous year.
05:14After the taxes, we will be about 20 billion.
05:17Last year and in 2022, we were about 16 billion.
05:20Thank God.
05:21How much will we pay the taxes?
05:23We will pay the taxes in all forms of taxes, including added value, profit taxes, distribution
05:27taxes, etc.
05:28We are approaching about 8 billion pounds.
05:30You may have said before that the company paid about 17 billion pounds in taxes since
05:33it was established.
05:34Exactly.
05:35The company was established in 2017 with the decision to establish the city.
05:38Over the years, of course, there has been an increase in taxes.
05:42In the last two years, we have approached about 6 billion pounds.
05:45This year, we have approached about 8 billion pounds.
05:48The previous year, we were talking about 14 billion pounds.
05:51The previous year, the numbers were a little lower.
05:54In general, I think it will be about 17 billion pounds.
05:57What are the main activities contributing to the company's work?
06:00Of course, the operation of these lands is number one.
06:03What are these lands?
06:04These lands are number one.
06:05Number two, of course, is the financial instruments.
06:09But, of course, in the coming period, we are looking to sell land.
06:12There will be acquisitions of other operational activities.
06:15I have a question.
06:16Are there activities that generate profits in the future?
06:19Yes, we are ready.
06:20Of course, you know that the operational activities need the population.
06:23The more the population increases, the more the operational activities are generated.
06:26For this reason, we have four subsidized companies.
06:28One of them is specialized in the management of technology.
06:31It is one of the largest French companies in this regard.
06:34Therefore, it deals with customers or companies in the technological activities.
06:37We have a company for the management of educational institutions.
06:40We have a large school.
06:43We brought a school from England.
06:45It is the largest school or the oldest school.
06:47It will be available next year, God willing.
06:49All of these activities will be operational activities.
06:52In general, it is a company for solid waste processing.
06:57All of these things we have as an execution capacity for future acquisitions.
07:01After the sale of these lands, we have commitments.
07:04We estimate that our commitments will be in maintenance and operation.
07:07All of these things, for the first phase of Rielf, will be approximately 3 to 4 billion pounds per year.
07:11Therefore, we need radars to cover this number and exceed it.
07:16What is the amount of investments that the company aims for in 2024?
07:19God willing, we are aiming for between 50 and 60 billion pounds.
07:24Of course, the first quarter is over.
07:26We spent almost 10 billion or 12 billion in the first quarter.
07:30But our budget said that we are ready.
07:34In the first quarter, we made 65 billion pounds in investments.
07:37I think these are the numbers that will be operational in the next period.
07:40And where will these investments be directed?
07:42They will be directed in two ways.
07:44In some of the activities, we will work on them.
07:46Because these are some of the activities that are required for the citizens.
07:50We will work on the activities of the site in Nisar and the number of floors.
07:54Because we see that even with the implementation of the code and the level of income of people,
07:59the number of residents in the capital will increase.
08:01Exactly, so we need these types of activities.
08:03This is what we will announce soon.
08:05We will also announce some residential projects.
08:08At least for the space, so that it is available to those who like it.
08:12We have some activities that we will invest in.
08:14And there are some activities that we will continue.
08:16Today, we have three new cooling stations in new areas in the next period.
08:23These are all 8-period activities.
08:25What is the size of land sales in the first phase of the capital?
08:29We had land for sale or investment of about 24,000 hectares.
08:34We dealt with about 19,000 hectares.
08:37And the remaining is between 4,500 and 5,000 hectares.
08:39Is there a value for these lands that were sold or were they sold?
08:43There is a value for all these investments that we make from selling these lands.
08:47Let me ask you to talk about what the real market expects and what is the issue of investment in the stock market.
08:53You announced before that the company is ready to offer a share of its shares during the first half of this year.
08:59How far has the consultation process reached for this offer?
09:04Of course, I mentioned before that we will be in the first quarter or the second quarter of this year.
09:09Our goal was to announce our indicators for the second quarter.
09:12This year, Kante, Moutameda, and the Omayat Group will appear.
09:15So that we can offer a consultation on what will determine the size and shape of the offer.
09:21Of course, the size of the company, as we have seen in some areas,
09:25took two or three hours to be ready for the offer.
09:29And this is our role as an executive power.
09:31We are working on the procedures to prepare the company for the offer.
09:34Anyhow, it will be close to the financial consultation or the consultation of the offer.
09:38It will be directed.
09:39Are we going to offer from the original company?
09:41Are we going to offer from the following companies?
09:43All of this.
09:44But we are not ready.
09:46We have two budgets.
09:47We have our own budgets according to the financial audit and the stock market management.
09:52Two budgets.
09:53We have two budgets.
09:54We have to shape the company itself with all the management that does not exist.
09:57It must be like the investment management and all these things.
09:59It must be in the framework and all these things.
10:01And these are the procedures that we are working on.
10:03And God willing, very soon we will finish the entire framework of the company.
10:06We had a consultation for the restructuring of the framework.
10:08And we worked on the procedures.
10:09We finished the first phase.
10:10Now we are working on the second phase.
10:12And I think that by the end of May or June, the new framework of the company will be ready.
10:17And when will it be chosen?
10:19I hope it will be by the end of the third quarter.
10:22I hope it will be by the end of the third quarter.
10:24Maybe the second quarter is already in the middle.
10:26I hope it will be by the end of the third quarter, God willing.
10:28Do you think that the size of the assets owned by Al-Asim Al-Edariya is one of the reasons
10:33why it may be offered a share from the main company, from the company itself?
10:37Of course, this is one of the challenges.
10:39The size of the company, we will say 1% or 2%, is also a big number.
10:42And therefore, as I said before, of course, the investor will support these words.
10:47Are we going to offer in the Egyptian stock market only or are we going to offer in foreign markets?
10:51Foreign markets.
10:52Because of the size of the offer that will be available.
10:54The size of the offer may be greater than the daily trading in the Egyptian stock market.
10:57So, this is what is needed.
10:58But of course, this is a decision, it will be an artistic decision for the investor who will be present.
11:02He is the one who will give us a guide to go in any sector.
11:04But you said before that on the offer of a share, the response was between 5% and 10% of the main company.
11:09We are still talking about this, but after the devaluation happened,
11:14after the adjustments, which are the exchange rate and all these things, as I said,
11:18the numbers of our assets will double.
11:21And therefore, the size of the company will double.
11:23When we re-evaluate the company now with the prices, with the numbers that remain in the charts.
11:27And therefore, the possibility of the offer being large is that it is only offered in the Egyptian stock market.
11:32And therefore, there may be access to other external markets.
11:35We have listed companies in the Egyptian stock market and also in the foreign markets such as the London stock market.
11:39Exactly.
11:40Will there be a choice in the case of the external offer in the markets such as the London stock market, for example?
11:46If you want to read it, it will be in the offer market.
11:48He is the one who will be in the offer market.
11:50He will be able to study the company and what the offer will be.
11:56And which markets will be good for us to offer the company.
12:01Will the offer, in your opinion, be through an increase in capital or a withdrawal from the investors for a share of the investors?
12:08I think it is easier to withdraw.
12:10It is easier for us to increase the capital.
12:12This will cause a lot of work that may take some time.
12:15But today, after evaluating the company and offering it, it is easier for the investors to withdraw some of their shares,
12:24which is going from 5% to 10%, as we said, depending on the share of the investors in the company.
12:29Withdrawal of some of the main investors or the share of the main investors.
12:34Let me ask you about the second phase of the administrative capital.
12:38You said that about 70% of the first phase of the capital was implemented.
12:42In the second phase, what are the main features and the size of the investments that will be invested in this phase?
12:47Let me put it here, because there were a lot of questions when I announced the second and third phases as a plan.
12:54As any real estate company, it is evaluated by the size of the land, the land bank that it has.
12:58As a real estate company, we have one of the largest companies.
13:01As I said, our land bank is limited.
13:04Therefore, we had to start looking at the previous phases, especially since we have a demand.
13:08Therefore, we had to start putting the plans for the second and third phases as a plan.
13:12But I will not go into details.
13:14This will take a long time, not less than six or nine months.
13:19Not before the beginning of the new year 2025, we will be able to say that we will start working on the ground.
13:24When will we be able to say that we will start working on the land?
13:27But we have to start with the land bank.
13:29This is one of the real estate companies.
13:31Otherwise, when we finish with the remaining part of the land, all our investments will be stopped operating only for others.
13:36Mohandas Khaled, I will continue this interview with you, but after the break.
13:40Our viewers will now go to the break.
13:42After that, we will continue this episode of the weekly dialogue.
13:44Stay with us.
13:49Dialogue with Mohandas Khaled
14:00Welcome again to the viewers of this episode of the weekly dialogue.
14:03Our guests today are Mohandas Khaled Abbas, Chairman of the Board of Directors of Al-Asama Administrative Development Company.
14:09Mohandas Khaled, welcome again.
14:10Welcome.
14:11Before the break, we were talking about the second phase of Al-Asama Administrative Development Company.
14:15You talked before about the 250 billion pounds cost for the second phase of Al-Asama Administrative Development Company.
14:21Is this number the same, or will it increase with the price of spending?
14:25Of course, the price of spending may increase, but these were approximate figures when the first phase was spent.
14:30I always say that in the first phase, we built the big things, such as the water station.
14:34We are currently building a water station.
14:36So, the major projects will not be in the second phase.
14:39Therefore, in the second phase, the amount of spending will be less than in the first phase.
14:44Which sectors will you focus on investing in?
14:46This is one of the roles assigned to the advisory office, which was chosen in the second phase.
14:51We are in the first phase, and we are looking at the required activities.
14:54The advisory office was chosen.
14:55Yes, it was chosen.
14:56It was an international advisory office, and we chose one of the largest international offices.
14:58It is a full consortium in all sectors, in planning, marketing, economy, and in all areas.
15:05They are currently working with us.
15:07Soon, we will see the beginning of the concept design or concept master plan for these stages.
15:14You talked about an industrial area that will be built inside the capital.
15:18What are the details of this area?
15:20Did you receive requests from industrialists to work or invest in this area?
15:25Yes, of course.
15:26We launched a new area, about 1,800 hectares, about 7 million square meters.
15:32It is a very special place for industry.
15:34It is about 40 to 45 kilometers from the port of Sohna.
15:37Therefore, if there is a shortage of raw material, it will be exported to a very special area through Sohna.
15:44When we announced, even before planning, we received requests to expand the existing area.
15:48We chose the place where we can expand towards Sohna.
15:53We made these requests.
15:55Of course, some of the requests are from industrialists, asking for an area of between one and two million square meters.
16:02Some of the other areas are designed to be logistic areas,
16:06serving the entire industrial area or small factories.
16:10We are now at the stage of finishing the plan.
16:13We are going back to the final details.
16:15At the same time, we are negotiating with industrialists,
16:18so that we can announce some of their lands and start working on them.
16:22What is the nature of the industries that will be in this area?
16:24Are you sure that you will be a friend of the environment?
16:27Yes, of course.
16:28Sohna is our main branch in the capital.
16:30We are a sustainable city.
16:33Therefore, our goal is to combine all the activities of our friend Libya
16:37with modern technologies and modern industries
16:43with some of the traditional industries.
16:46As I said, the area of 7 million square meters is not small.
16:49It is the first stage.
16:50If we expand, it may reach 10 million square meters.
16:52Therefore, this is a large area.
16:54There will be different activities.
16:57When do you expect to launch this area and start working on it?
17:03I think we will finish the detailed plan in two months.
17:08We will start working on it in July.
17:10The advantage is that we are building on the first stage.
17:14We have all the facilities.
17:16Therefore, the delivery of facilities in this area will not take long.
17:19Therefore, we will start working on the land
17:21in parallel with the construction of factories or facilities in these areas.
17:26The facilities will be delivered to these areas.
17:28Hopefully, there will be some facilities in these areas
17:32in the first stage.
17:34As I said, the third stage will be launched in this area.
17:39How much is the investment cost?
17:41The investment cost will be between 50 and 60 billion dinars
17:44as complete facilities in the stations where the water is pumped.
17:51This will amount to 30.5 billion dinars.
17:56As with other companies,
17:58to what extent did the company influence the cost of the GNI?
18:02Therefore, the cost may have increased.
18:04Of course, as any company.
18:06As I said, we were in a hurry.
18:08Thank God, we had a dollar balance.
18:11Today, we can balance what happened.
18:13From the sale of land in dollars?
18:15From the sale of land.
18:16From the supplies.
18:17We used to get some supplies.
18:18We used to do a priority to balance the supply only in dollars
18:20and continue with the GNI.
18:22We had a balance that was enough for our projects for the next two years.
18:25Thank God, we were able to get some of this increase.
18:28But of course, we were affected, I think,
18:30from 15 to 20 percent in the cost of other projects.
18:33It will increase.
18:34It will increase, of course.
18:35It will increase by 25 percent.
18:36What about the developers in the capital?
18:38Were they affected?
18:40Was there a delay in the GNI?
18:43No, of course not.
18:44Thank God, the relationship between us and the developers is a direct relationship.
18:47We are always in contact with them.
18:49As a company, we provide facilities and supplies for a period of time.
18:53Of course, there are challenges in the future,
18:55starting with the coronavirus, then the Russian-Ukrainian war,
18:57and today with the price of spending.
18:59The relationship must be healthy between the two parties.
19:01In the end, we succeeded together.
19:03The success is not one or two parties.
19:05Our goal is not the second party, which is a developer,
19:07but our goal is the third party, the buyer.
19:09Today, the buyer will be the most affected if one of the projects is not completed.
19:13Thank God, we do not have a crash rate today.
19:16Yes, there is a delay.
19:17There is a delay in submitting, for example.
19:19There is a delay in submitting, but of course,
19:21we are trying to help and extend the time for the developers
19:24to stick with the buyers.
19:26Will we see more activities,
19:29especially entertainment activities,
19:31in the capital in the coming period?
19:33We have some requests for us to build entertainment cities.
19:37We want to see its seriousness.
19:39In the end, we want it to be a complete city.
19:42There is no city that is built on the block,
19:44or a city that is built on the administrative part.
19:46In the end, people have to move.
19:49If they work here and do not have a residence here,
19:51they will work and return to the same place,
19:53or vice versa, if they live here and work in another area.
19:55So we have to provide general opportunities,
19:57we have to provide complete services for all of them,
19:59so that those who move here can live here.
20:01What are the most prominent demands for the establishment
20:03of entertainment areas in the capital?
20:05We need activities like parks,
20:07and we need a collection of these activities.
20:09What are these activities?
20:11We have some of them,
20:13and we are studying them to study them.
20:15The cost of all these things is a long-term investment,
20:17and we have to make sure that the developer
20:19who is applying has the financial resources,
20:21and has the artistic resources,
20:23and works in this type,
20:25so that we don't end up with just one thing.
20:27We are studying these things,
20:29and I think we will soon realize
20:31that we need this type of activities.
20:33Is the model of participation here,
20:35in these cases,
20:37only in the sale of land,
20:39or maybe participation and a percentage of the profits?
20:41No, of course, we are a company that is open to everything.
20:43We allow participation in the sale of land
20:45in exchange for profit.
20:47All kinds of things,
20:49and that was the original goal
20:51when this company was established,
20:53to manage the city,
20:55or to own the city,
20:57to get out of the regulatory procedures
20:59in cooperation with the state,
21:01and therefore we have the freedom of movement
21:03based on the studies that we are doing.
21:05If we can enter the companies,
21:07we are managing some of the companies now.
21:09Did companies happen?
21:11Of course, the companies that we established
21:13are all companies.
21:15These companies are all with other parties,
21:17especially foreign institutions.
21:19They are all with foreign parties,
21:21from France, Germany,
21:23from the UAE,
21:25so these are all companies.
21:27Indeed, the companies were established,
21:29and we have some projects in progress,
21:31such as participation,
21:33and our commitment to land,
21:35land and buildings,
21:37all of this is under study now.
21:39Since you talked about participation,
21:41land and buildings,
21:43the governmental district is always
21:45debated about the role of the governmental district
21:47to the state.
21:49Explain to us the mechanism of this role.
21:51It is very simple.
21:53We, as the capital company,
21:55built this governmental district
21:57and we made a contract with the government
21:59to rent these buildings
22:01for 49 years to be renovated.
22:03The rent is paid annually,
22:05like any other annual rent.
22:07Annual rent?
22:09Yes, annual rent,
22:11and if there is a delay in the payment,
22:13we take the benefits of the delay.
22:15Thank God, it is excellent.
22:17We get all the consumables,
22:19water, electricity,
22:21everything we need.
22:23It is like any other rent.
22:25Why are we different today
22:27from the capital company?
22:29Why are we different from any other real estate developer?
22:31People look at any developer
22:33and they succeed and earn all these things.
22:35The company does the same thing.
22:37We have land, we invest it,
22:39and we try to sell it.
22:41Even in Rabousa,
22:43the Ministry of Housing owned
22:45the Community Council.
22:47The Community Council is an economic entity
22:49that has nothing to do with the state.
22:51The state specializes in land,
22:53and as you have seen,
22:55the Ministry of Housing owns
22:57all the investments.
22:59It is not a government entity.
23:01We are a company,
23:03and we have one of the four
23:05largest refugees in the world.
23:07These people do not have
23:09any political status.
23:11The company pays our taxes.
23:13We pay all our debts.
23:15We pay the electricity bill.
23:17We are responsible for the whole city,
23:19but we pay the electricity bill
23:21in the region,
23:23and we get a part of the license.
23:25The capital city company
23:27is not like any other developer.
23:29We do not make money,
23:31but they do.
23:33The main contributors
23:35in the company
23:37are all government entities.
23:39It is not up to them
23:41to contribute to a successful project
23:43that benefits the state.
23:45Let's go back to the capital city
23:47which is 6 or 7 years old.
23:49What was this region?
23:51Was it an addition
23:53to the national economy?
23:55Can you imagine
23:57the amount of investments
23:59from the capital city company,
24:01the developers,
24:03and the jobs it provided
24:05over the past 7 years
24:07on the investments
24:09and the taxes paid
24:11not only by the capital city company
24:13but by all the developers
24:15to the state?
24:17No.
24:19The capital city company
24:21did not exist in the region.
24:23Therefore,
24:25this is a successful project.
24:27It is up to the contributors
24:29to contribute to a successful project.
24:31Will the capital city company
24:33change its name?
24:35I do not know.
24:37I always say that
24:39I have about 100 million names.
24:41It takes time to choose
24:43100 million names.
24:45It will be a new capital city.
24:47It will have a different shape.
24:49Do you have any suggestions?
24:51Leave it.
24:53I told you that we have 100 million names.
24:55If you have time,
24:57I can tell you the 100 million names
24:59and you can choose from them.
25:01Of course, everyone sees
25:03the name he suggests
25:05as the best name.
25:07Mr. Khaled, thank you very much
25:09for this interview.
25:11Thank you.
25:13We have reached the end
25:15of this week's interview.
25:17Our guest was engineer Khaled Abbas,
25:19the president of the capital city company
25:21for urban development.
25:23See you in the next episode.
25:25Goodbye.